Guiding consumers since 2009

This is how much you should spend on accommodation

By Isabelle Coetzee

As your salary changes over time, your expenses will change too. But what if you’re spending an exceedingly large percentage of your income on accommodation? Is it feasible or even recommended in our current stressful financial climate?

JustMoney reached out to real estate experts to explain how much you should spend on accommodation, so that you can ensure you’re budgeting correctly each month.

Tip: Make sure the contents of your home are covered by getting home insurance today.

Keep housing at 30% of your income

According to Grant Smee, managing director of Only Realty and founder of EPiC South Africa, Covid-19 has certainly taught us to spend and save wisely.

“You should spend a maximum of 30% on housing each month. Why this amount? By limiting your expenditure to 30% of your nett salary you’re ensuring that you have enough budget to pay for other living expenses,” says Smee.

He explains that this may include transport, food, education, and other essentials, as well as potential savings or reserves for unforeseen circumstances that may arise. 

READ MORE: Can’t pay rent? This is what you should do

Should you move if your housing is too expensive?

Smee believes you should always take your personal circumstances into account when upgrading or downgrading your accommodation. Most importantly, you need to ensure you’re not allocating too much of your budget to your accommodation.

“Consider the current economic environment we find ourselves in and take a look at your immediate environment – perhaps you’re paying for space or amenities, such as an off-plan development you’re not making use of but are paying a premium for,” says Smee.

According to Lorraine-Marie Dellbridge, manager at Lew Geffen Sotheby’s International Realty Rentals in Cape Town Southern Suburbs, Noordhoek, and False Bay, prices are coming down at the moment.

She points out that some tenants will consider moving to a different housing option so that they can save a couple of thousand rand each month.

“Some tenants can move within the same block. In the current economic climate, everyone wants to save where they can, and the first place they’ll look is rent because they can do something about that. Unlike the price of food or petrol, you can bring your rent down if you keep an eye out,” says Dellbridge.

She explains that different areas offer different prices for the same specs. For instance, a two-bedroom apartment in Tokai may be R10,000 per month, whereas in Plumstead it may be R8,000 a month.

“In the current market you can negotiate with your current landlord if you’ve noticed that rentals have come down in your immediate area or even block,” says Dellbridge. 

Alternatives to making up housing spend

Smee says that other ways to save on housing may be to rent out unused space on your property. For example, renting out your garage to someone who’s looking for additional storage space, or even renting out a bedroom to someone who’ll share your living space as well as the cost of utilities.

However, he advises that you first get permission in writing from your landlords to do this.

Make sure your home is protected. Get home insurance today by filling out the form on this page.

Recent Articles

Featured Everything you should know about tax auto assessment

In 2019, the South African Revenue Service (SARS) launched a system, which was dubbed an “auto assessment”, to assist taxpayers with their annual tax returns. But what does this system entail, and how will it impact you?

What does it mean to be a registered Financial Services Provider?

You may have noticed that financial institutions state that they’re registered Financial Services Providers (FSP). But what does this actually mean, and how does this benefit you as a consumer?

Should the retirement age change?

Across the world, people are retiring later than they used to. However, retirement products are centred around set retirement ages at which point you’d be able to access your retirement savings. But how applicable is the current retirement age in South Africa?

Everything you need to know about wills

Death can leave a lot of confusion and chaos. What happens to your possessions when you die can have a profound effect on those you leave behind. But you can soften the impact by drawing up a will.

Deals

Get 30% off your gym membership with Absa student account

Price: Available on request
When: Daily
Where: Nationwide

Get 10% discount on Rentalcars.com

Price: Available on request
When: Daily
Where: Worldwide

Get up to R5 back in rewards points when buying fuel

Price: Available on request
When: Daily
Where: Nationwide


Latest Guide

Guide to debt rehabilitation solutions