What Can I Afford to Pay?
Chances are, you already know (or think you already know). When it comes down to it, you can afford as much or as little as you want within a large price range, depending on your lifestyle.
Conventionally, it is considered responsible to spend no more than 33% of your monthly after-tax income on rent. For example, if you take home $3,000 per month after taxes, your rent (or share of rent, if you live with a roommate), should be no more than $1,000 per month. It is a little harder to stick to this limit when living in cities such as Victoria, Vancouver, Edmonton or Calgary, all of which have some of the highest-priced rental markets in Canada. However, before going out and spending over 50% of your monthly income on rent (that is, if you could find any landlord willing to accept your application with such a high rent-to-income ratio), you might want to make a few calculations to decide if shelling out for a nicer place will make you happier.
First of all, examine your monthly expenses. Do you find yourself coming up short of money for things you like to do? Do you like to dine out a lot, take weekend trips, or save money each paycheque? If so, weigh this against the importance of living in a nicer dwelling. If you're searching for an apartment, try looking in a price bracket that is $100 or $200 below the most you would spend on rent. If you can find a decent place that is a bit cheaper, you'll be surprised at how much easier your life is with an extra $100 or so per month.
If, after examining your monthly expenses, you don't feel that extra money is as important as a nicer place, then go ahead and look for homes at a higher price point. Just make sure that you have a set upper limit that you are willing to spend per month: you don't want to move into a place that costs $50 more than you said you'd pay, only to find yourself struggling to make ends meet at the end of the month.
Following these guidelines, you should be able to find an apartment that is both nice, and cheap enough that you can live comfortably, even in expensive markets.
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