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As you are determining how much you can afford to spend on your monthly rent for your new apartment, there are three main costs which you must consider:

  1. initial expenses,
  2. monthly rental payments, and
  3. day-to-day living expenses. 

You will need to work out, in as much detail as possible, how much you can afford to spend on all of these costs. By not doing this, you might miscalculate your total monthly expenditure and find you cannot afford to live in the spot you have chosen…or will have to make sacrifices elsewhere in your day-to-day living expenses.

Your initial expenses will include such items as:

  1. first and last month’s rent (paid at the start of the lease),
  2. movers,
  3. connections to services (such as telephone, cable, hydro, etc.), and
  4. necessary furnishings (such as beds, chairs, kitchen appliances/utensils, bed linens, towels, etc.).

You will need to make sure you have sufficient money available at the start to pay for all of these costs.

With the monthly rental payments, you will need to find out if your total rent includes all the utility costs. Utilities typically include hydro, water and heat. If you decide to rent a condominium apartment, not all rentals include the utilities (depending on what is included in the owners’ monthly maintenance fee). After ascertaining if there are additional costs, you will need to calculate other discretionary costs like contents insurance, telephone, internet and cable.

In considering your day-to-day living expenses, you will need to not only account for the basic ones such as food (groceries and restaurants), transportation, entertainment and clothes but you should make allowances for unexpected expenses such as medications or car repairs. You may even want to allocate another 10% of costs to ensure you have these extra costs covered. You may also want to allocate some funds for your savings in general, or towards a certain item like a vacation.

Once you have calculated all your costs, you need to determine how much you can afford to spend on rent each month. The rule of thumb is that your rent should not exceed 1/3 of your total gross (pre-tax) income. If you want to be conservative, be sure that it doesn’t exceed 1/3 of your after-tax income.

As rental accommodation consumes a significant portion of your monthly income, you should also figure out what you features are absolute must-haves with your rental unit. For example, decide what size of apartment you need…number of bedrooms…number of bathrooms…and any things you can’t live without (i.e. air conditioning, fitness facilities, etc.). Next, you’ll need to figure out what’s nice to have…could you forego an ensuite laundry or fitness facilities in order to have air conditioning? The key here is figuring out what you’d be willing to do without to ensure that you get what’s most important to you.

In the end, you get what you pay for. You will have to be reasonable – if you are on a very tight budget and can’t afford much, don’t expect to live in a luxury downtown apartment with all the amenities.



1858 Queen Street East, Toronto Ontario, M4L 1H1

DIRECT: 1.416.712.4441

OFFICE: 1.416.712.4441

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