For most people, finding the right place to rent is somewhat of a rite of passage that happens after moving out of a family home. When you are an adult, however, it’s expected that you understand what you can afford on a single income when looking for apartments for rent in Perth.
With this in mind, below are some considerations you may need to investigate beforehand if you hope to find a place to live that’s within your budget and to your liking.
How Much to Spend on Rent
According to the Australian Bureau of Statistics, rental stress happens when a person spends more than 30% of their take-home pay on rent. The trick is to find something you can afford on your salary.
Start by looking at your fixed income-to-rent ratio. This is the percentage of your net income after taxes budgeted for rent. There is no set rule on how much you should spend, but it is generally accepted that it should be around 25% to 30% of your income—and no more. Going past this point can cause unwelcome financial and emotional stress; figuring out a budget is important when you consider why rent in Perth is so high.
Regardless of how you look at it, rent is going to be one of your most significant expenses if there is only one income paying for the apartment. Low-income earners in Perth also sometimes struggle to find affordable rentals.
A recent study evaluated 10,500 rental spaces in Perth and confirmed that there is a serious lack of affordable housing in Western Australia–this has led to severe rental stress and homelessness for some.
The report also went on to claim that even with Perth’s strong property market valuations, most people in the region living on low wages and single incomes are struggling financially.
How to Cope With Rental Rates in Perth
If you are on a single income, you can take some proactive steps to cope with rental rates in the city and learn how rent is calculated in Perth. A few suggestions include:
- Set a realistic budget for how much you want to spend on your rent: By doing so, you will know exactly how much money is coming in and where it needs to go. It would also be good to jot down your sources of income and expenses. This will give you a clear picture of your income and spending requirements, allowing you to determine how much of your money is available for rent.
- Try to negotiate with your real estate agent or landlord: If you research rents in your immediate areas to get a rough idea of what other people are paying and present your findings to them, they may be open to setting a new price. This can sometimes work, especially if you are a reliable, long-term resident. The same also applies if your rent is up for review. The key is to keep an eye on prices in your area to ensure that whatever rent you are paying is reasonable for the market. If your rent is excessive, you always have the right to challenge it.
- Forgo extravagant spending: This will allow you to live in a less expensive, more affordable house. For instance, you may be able to reduce your monthly costs by moving from one neighbourhood to another. You could also consider giving up some yard space for a home with a small courtyard.
In Summary
The cost of living is constantly rising, but wages never seem to keep up. As a result, it has become quite common for people in Perth (both single- and multi-income households) to spend a significant portion of their paycheck on rent. Spending 25% to 30% of your income on rent is usually seen as the ideal amount to budget. This number can vary depending on the person, their financial situation, and what budget they have in place.
For many, renting is only a temporary arrangement before purchasing a home. If this is your situation, do your best to keep rental costs as low as possible, especially if you have a single income, so you will have more savings to invest when you are ready to make a purchase.
