Did you know that almost one-third of Australian households are renters, a number steadily increasing over the past decade? With rental prices soaring nationwide and vacancy rates hitting historic lows, the competition in cities like Melbourne is fierce.

Melbourne's rental costs have reached unprecedented levels, with houses averaging $480 per week and units at $436. The average weekly cost of rent in Melbourne now stands at $480 for a house and $436 for a unit.

Given the fierce competition in the rental market, it's understandable that renters are grappling with the question of how much of their income they should allocate towards rent. To determine this, you may consider using one of the rent-to-income ratios available. Let’s have a look:

Example: If you earn $3,200 per month before taxes, you should spend about $960 per month on rent.

Under 30%

The 30% rule is a general guideline that renters can follow, but you should also consider other expenses and factors. For example, if you have credit card debt or student loans to pay off, it may be a good idea to find an apartment with rent below 30% of your monthly income, so you can put more of your budget towards reducing your debt.

Above 30%

If you’re spending more than 40% of your income on rent, you could be experiencing rental stress.

Therefore, it's essential to consider your financial situation and goals carefully. By considering your income, location, and other expenses, you can find the right balance between affordable rent and achieving your financial goals.

Renting can be an excellent option for many, providing flexibility and convenience. By following these guidelines and considering your unique circumstances, you can make sure you're spending the right amount on rent.

TEAM SONI CAN HELP

If you’re a renter and looking for a property, reach out to us today!

We offer reliable renter selection, efficient maintenance, and transparent communication in all stages of the lease.

Our dedicated property managers will provide you with the best customer experience. Benefit from our negotiation skills and real estate expertise to maximize your returns.