Paying Your Rent: The Ultimate Guide

For millions of households across the country, monthly rent payments make up the single biggest expense in the monthly budget. It’s common to spend 30% of your income on rent, and many Americans pay even more than that. With that in mind, it’s worth considering how you pay rent, how much you pay, and how you can save money on rent every month.

How Much You Should Spend on Rent

The most common guidance is that you should spend 30% of your income on rent. As a rule of thumb, you should aim to make 40 times the monthly rent in your annual income. But there’s no one-size-fits-all answer to how much you should pay in rent.

Depending on your income level and location, dedicating 30% of your pre-tax income could mean committing far more money than is necessary to get a comfortable, safe apartment or house. For others, 30% might not be nearly enough to afford a reasonable rental in their city.

In some cases, alternative strategies like the 50/30/20 rule may work better. With that, you limit your “needs” – such as housing, utilities, insurance, and other critical bills – to 50% of your pre-tax income. Then, 30% goes to “wants,” and 20% goes into savings. With that approach, if your other bills are low, you could potentially commit more to rent.

But in some cases, you might also need to use a customized approach. For many people, taking a moment to review their budget, consider their long-term goals, and plan for potential financial shifts down the line is a better option. You can personalize your spending more effectively this way, ensuring you can cover rent without sacrificing in too many areas.

Keep in mind that many landlords have income-related requirements. For example, some landlords won’t consider a tenant if their monthly income isn’t at or above three times the monthly rent.

If you’re worried that your income isn’t high enough to qualify for a reasonable rental, then you have a few options. First, you can explore options for how to save money on rent, which is discussed in greater detail later in the article. Second, you can save enough money to prepay several months’ worth of rent, which may give a landlord sufficient peace of mind, allowing them to overlook a lower income.

How to Pay Your Rent

While it might not seem like you have a slew of options when it comes to how to pay your rent, that isn’t the case. Most landlords will accept a few forms of payment, each with its own benefits and drawbacks. If you’re wondering which approaches are best, here’s what you need to know.

Paying your Rent Online

These days, it is increasingly common to pay your rent online via a rent portal. If your landlord uses an online portal, you can typically submit a payment using your bank account information or, potentially, a debit or credit card with just a few clicks.

The benefit of paying your rent online using a portal is that you can typically handle your payment at the last minute and still qualify as being on time. Plus, you don’t have to worry about mailing anything or meeting your landlord to handle the payment over.

Using a Check to Pay Your Rent

Another classic payment method is to write a check. It gives you a written record that you made a payment and is easy for your landlord to deposit. Plus, you can either drop one off or mail it to your landlord, though the latter only works if you can send it out a few days in advance to ensure it’ll arrive.

Additionally, most online bill-paying services technically just send checks. This option isn’t just convenient, but you can also set it up to recur automatically, making it easier to ensure that you don’t accidentally forget to put the check in the mail.

Handing Over Cash for Your Rent

While this isn’t as common, some landlords will allow tenants to pay rent in cash. Out of all of the possible approaches, this one is usually the riskiest. Since that’s the case, you’ll want to exercise caution.

For example, never put cash rent payments in the mail. Instead, bring it directly to your landlord and make sure you get a receipt. That way, you have proof of payment.

Additionally, be wary of any landlord that makes a cash payment mandatory without reasonable justification, such as you having a history of bounced checks. If they’re demanding cash, it could mean that they have ill intentions or are doing something illegal, so it may be better to assert that you’d rather use another method just to be safe.

Alternative Options Like PayPal

Some landlords also accept payment via platforms such as Paypal, Venmo, or Zelle. These platforms may give you the option to pay via credit card, which might work in your favor, and you’ll also have a record of the transaction, which can serve as proof of payment.

However, there are also drawbacks. With PayPal, you can incur fees if you use debit or credit cards. Plus, if you try using the free option that’s designed for family and friends, you’re technically violating the terms and conditions, which could cause your account to get shut down.

Venmo also has fees for using a credit card, and the terms and conditions do give the company the option to limit the number of transfers you perform, which could cause problems. With Zelle, there aren’t fees, but if your bank doesn’t have Zelle built-in, the sending limit might be too small to cover your rent. Zelle also doesn’t allow you to cancel payments, even if you send them to the wrong person by mistake.

How to Save Money on Rent

Rent is usually one of the biggest expenses a household shoulders each month. Since that’s the case, finding ways to save money on rent can have a significant impact on your budget. Fortunately, there are a lot of options available.

Split the Rent with Roommates

One of the most common ways to save money on rent is to split a house apartment with roommates. That way, you aren’t the only one shouldering the cost. As a result, you can spend less every month. Plus, your roommates also get the benefit of paying less than if they covered rent alone, making it a win-win.

Consider Subletting a Room

You can also sublet a room of your apartment, effectively creating a ‘sublease’ secondary to the lease on your apartment. Where your lease is between you and your landlord, the sublease is between you and the tenant who’s renting a room from you.

Just keep in mind that subletting isn’t legal in all areas. Additionally, you’re still fully responsible for ensuring your landlord gets the rent payment, regardless of whether the sublessee is on time.

Take Advantage of Prorated Rent

While it won’t result in a large savings and isn’t something you can do often, you may be able to take advantage of prorated rent in some situations. If you’re moving into or out of a rental in the middle of the traditional rental period, you might be able to pay less than the full rental period amount.

For example, if your landlord considers the first of the month the start of a rent period, but you aren’t moving in until the 16th, you may be able to get them to prorate the rent since you’ll only be there for half of the month. If they agree, you could save about 50% off of the cost during that particular month.

It’s important to note that not all landlords will prorate rent, as it isn’t always required by law. Additionally, there are multiple formulas for prorating rent, which could lead to slight price fluctuations.

Negotiate Before Signing a Lease

Many tenants don’t realize that rent is technically negotiable if you address the matter before signing a lease. If you’re a particularly well-qualified renter or have a long history in the property and always pay on time, you may be able to leverage that to secure a better price. Similarly, you may be able to secure a rent reduction in exchange for performing a particular service, such as serving as a point of contact for issues for other tenants in the building.

Whether a landlord will negotiate depends on several factors. Along with what you bring to the table, local market conditions typically play a big role. If rentals are in demand and the supply is short, the odds that a landlord will negotiate go down. However, if there is ample supply or something undesirable about the unit, building, or location, you may be able to pull it off.

Additional Charges to Watch Out for

Along with your traditional monthly rent, many tenants face a range of other costs that can increase how much they need to pay a landlord during a given month. One prime example is late fees, which can add a surprising sum even if you’re just one day late, depending on where you live.

Now, if you know you’ll be paying your rent late but have a long history of on-time payments, you may be able to convince the landlord to waive the fee one time. However, other costs aren’t easy to avoid.

For example, pet rent might be mandatory with some units. Security deposits are also almost always required, and you may have to kick in a little more if your rent goes up when you have to sign a new lease. Charges for damages and cleaning can also happen.

In most cases, you can find out about any potential cost by reviewing your lease carefully. That way, you’re prepared for what’s possible.

What to Do If You Need Help Paying Your Rent

When you rent a home or apartment, you usually believe you’ll be able to handle the cost long-term. However, if the unexpected happens, you might find yourself suddenly short, leaving you scrambling to figure out what to do.

Fortunately, you can get help with rent. If you have a long-standing relationship with your landlord, you may be able to negotiate with them. Otherwise, there are charitable organizations and government agencies that may be able to offer assistance.

If you’re worried you’ll need help paying rent, it’s wise to explore your options as soon as possible. Even if you qualify for aid and funds are available, it can take time to process an application and issue payment. By starting sooner rather than later, you ensure you either aren’t late or are as close to on time as possible, limiting your late fees and potentially allowing you to avoid eviction.