Resources & Guides
Educational resources to help you make informed rental decisions
Educational Guides
Understanding the 30% Rule
The 30% rule is a widely-used guideline in personal finance that suggests you should spend no more than 30% of your gross monthly income on rent. This rule helps ensure you have enough money left for other essential expenses, savings, and emergencies.
Example: If you earn $5,000/month, aim to spend no more than $1,500/month on rent ($5,000 × 0.30 = $1,500).
Why 30%?
- Leaves 70% of income for utilities, food, transportation, savings, and emergencies
- Reduces risk of becoming "rent burdened" (spending more than 30% is considered cost-burdened)
- Most landlords use this ratio when screening tenants
- Helps maintain a healthy debt-to-income ratio
Note: The 30% rule is a guideline, not a strict rule. Factors like location (high-cost cities), income level, debt, and lifestyle may require adjustments.
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Tenant Rights: Prorated Rent
Prorated rent is the proportional amount of rent you pay when moving in or out mid-month. Understanding how to calculate it protects you from overpaying.
Two Common Methods:
1. Days in Month Method
Formula: (Monthly Rent ÷ Days in Month) × Days Occupied
Example: $1,500 rent, move in on May 15 (17 days remaining in May)
Daily rate: $1,500 ÷ 31 = $48.39/day
Prorated rent: $48.39 × 17 = $822.58
2. 365-Day Year Method
Formula: (Monthly Rent × 12 ÷ 365) × Days Occupied
Example: Same scenario as above
Daily rate: ($1,500 × 12) ÷ 365 = $49.32/day
Prorated rent: $49.32 × 17 = $838.36
Important: Always confirm which method your landlord uses before signing the lease. Most leases specify the calculation method.
How to Split Rent Fairly with Roommates
Splitting rent equally isn't always fair when roommates have different room sizes, amenities, or circumstances. Here are three common methods:
1. Equal Split
Simple and straightforward: Total rent ÷ Number of roommates. Best for similar-sized rooms with equal access to shared spaces.
2. By Room Size
Proportional split based on square footage. Fair when rooms vary significantly in size.
Example: 3 roommates, $3,000 rent
- Room A: 150 sq ft (30% of total) = $900
- Room B: 150 sq ft (30% of total) = $900
- Room C: 200 sq ft (40% of total) = $1,200
3. Custom Adjustments
Start with room size, then add premiums for amenities:
- Private bathroom: +10-15%
- Parking spot: +5-10%
- Walk-in closet: +5%
- Master bedroom: +5-10%
Pro Tip: Discuss and agree on the split method before signing the lease. Put it in writing to avoid conflicts later.
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Understanding Rent Increase Laws
Rent increase laws vary by state and city. Here are key concepts every tenant and landlord should know:
Notice Requirements:
- 30 days: Most states for increases under 10%
- 60-90 days: Many states for increases over 10%
- California: 30 days for increases ≤10%, 90 days for increases >10%
- Rent-controlled cities: May have stricter requirements
Rent Control Limits:
Some jurisdictions cap annual rent increases. Common limits include:
- California (AB 1482): 5% + local CPI (max 10% total) for most units
- New York City: Rent Stabilization Board sets annual increases
- Oregon: 7% + CPI statewide rent control
- San Francisco: 60% of CPI increase (typically 1-3% annually)
Disclaimer: This is general information. Always check your local and state laws, as rent control rules change frequently.
Rental Terms Glossary
Gross Rent
Total rent including utilities and other fees. Used when calculating housing costs.
Net Rent
Base rent excluding utilities, parking, pet fees, and other add-ons.
Rent Burdened
When a household spends more than 30% of gross income on rent. "Severely rent burdened" is >50%.
Prorated Rent
Proportional rent for a partial month, calculated when moving in/out mid-month.
Security Deposit
Refundable payment (typically 1-2 months' rent) held by landlord to cover damages or unpaid rent.
Income-to-Rent Ratio
Ratio of monthly income to rent, typically 2.5x-3x. Used by landlords to screen tenants.
Lease Term
Duration of rental agreement. Common terms: 6 months, 12 months (most common), or month-to-month.
Rent Control
Laws limiting how much landlords can increase rent annually. Varies by jurisdiction.
Frequently Asked Questions
How much rent can I afford?
Use the 30% rule as a starting point: aim to spend no more than 30% of your gross monthly income on rent. For example, with a $4,000/month income, target $1,200/month or less in rent.
Do utilities count toward the 30% rule?
Yes, the 30% guideline typically includes all housing costs: rent, utilities, renter's insurance, and parking. If you're paying utilities separately, factor them into your budget.
Can a landlord increase my rent at any time?
No. During a fixed-term lease, rent cannot be increased unless specified in the lease. After the lease ends, landlords must provide proper notice (typically 30-90 days depending on state/city laws) before increasing rent.
How is prorated rent calculated?
Two methods are common: (1) Divide monthly rent by days in that month, then multiply by days occupied, or (2) Calculate annual rent divided by 365, then multiply by days occupied. Check your lease to see which method applies.
What's a fair way to split rent with roommates?
Three common methods: (1) Equal split if rooms are similar, (2) By room size (square footage), or (3) Custom with premiums for private bathrooms (+10%), parking (+5%), or master bedrooms (+10%). Discuss and agree on the method before moving in.
What income do landlords require?
Most landlords require tenants to earn 2.5-3 times the monthly rent. For example, for $1,500/month rent, you'd need $3,750-$4,500/month in gross income. Co-applicants' income typically counts toward this requirement.
State-by-State Rent Control Overview
Rent control laws vary significantly by state and city. Here's a high-level overview of states with rent control or tenant protection laws:
| State/City | Rent Control? | Key Details |
|---|---|---|
| California | Yes | AB 1482: 5% + CPI (max 10%) annual cap. Applies to most rentals >15 years old. |
| Oregon | Yes | Statewide: 7% + CPI annual cap. First state with statewide rent control. |
| New York | Yes | Rent Stabilization in NYC. Limits set annually by Rent Guidelines Board. |
| New Jersey | Yes | Local control. Many cities have rent control ordinances. |
| Washington DC | Yes | Rent control for buildings built before 1975. CPI + 2% cap. |
| Maryland | Limited | Montgomery County has rent control. State generally prohibits it elsewhere. |
| Texas | No | Rent control prohibited by state law. |
| Florida | No | Rent control prohibited by state law. |
Important: This is a simplified overview. Rent control laws change frequently and vary by city. Always check current local laws before making rental decisions. This information is provided as-is for educational purposes only.
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