# How much of income to allow for rent?



## redbourn (May 8, 2013)

Hi, 

I will be arriving in Lisbon in the next few weeks and will check out some rental apartments.

Do you think allowing 1/3 of my net income for rent is about right?

Thanks,

Michael


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## pintarroxo (Jun 15, 2012)

This is something very personal that you can answer best by yourself. It's not particular to Lisbon, but is general "Financial Planning 101". What percentage of your income have you spent on rent in the past? What are your other liabilities and expenses? How much do you save? How do you like to spend your disposable income?...


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## oronero (Aug 24, 2012)

Well if you earn 3000 Euros per month then that should suffice, however if you earn only 500 Euros a month then you will struggle!

Your question as initially posted has no answer because a third of an undisclosed sum can be anything, or even nothing!



Perhaps you should drink your coffee and gather your thoughts before posting.


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## siobhanwf (Mar 20, 2009)

Michael if you tell us where you are thinking of living and what size accomodation you need it might be easier to answer you


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## redbourn (May 8, 2013)

oronero said:


> Well if you earn 3000 Euros per month then that should suffice, however if you earn only 500 Euros a month then you will struggle!
> 
> Your question as initially posted has no answer because a third of an undisclosed sum can be anything, or even nothing!
> 
> ...


Not sure about that ;-) 

In almost every country in the world if you apply for a mortgage the bank checks to see if you can afford it. 

How do they do it?


Depending on the country they check to see if the mortgage exceeds 30-40% of your income. If it does then you don't get the mortgage.

Michael


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## redbourn (May 8, 2013)

redbourn said:


> Not sure about that ;-)
> 
> In almost every country in the world if you apply for a mortgage the bank checks to see if you can afford it.
> 
> ...


P.S. This was the first site that I just checked. 

What House Can I Afford - How Much Home Can I Afford


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## oronero (Aug 24, 2012)

redbourn said:


> Not sure about that ;-)
> 
> In almost every country in the world if you apply for a mortgage the bank checks to see if you can afford it.
> 
> ...


Michael, your opening post was directed at renting, you asked if a third of your wage was sufficient to cover it but you did not indicate your income.

A third of the minimum wage applicable in Portugal would be insufficient funds to rent an apartment in Lisbon.

If you had initially asked whether a mortgage would be awarded on roughly a third of your earnings then my reply would have been incorrect but you did not!


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## redbourn (May 8, 2013)

oronero said:


> Michael, your opening post was directed at renting, you asked if a third of your wage was sufficient to cover it but you did not indicate your income.
> 
> A third of the minimum wage applicable in Portugal would be insufficient funds to rent an apartment in Lisbon.
> 
> If you had initially asked whether a mortgage would be awarded on roughly a third of your earnings then my reply would have been incorrect but you did not!


I'm not being heavy about this and not intending to be argumentative.

My net pension is 1300 euros a month approx so I will look for a studio or whatever that's about 350-400 which will leave me with 900+ euros.

There are pages and pages of places here ..

Alugar apartamento t1 mobilado lisboa - página 13 - Trovit Imóveis

Moving is pretty interesting. Looking at how much stuff most of us have accumulated that we never use or wear anymore. I'm not a big consumer but still amassed a ton of stuff that I'm now selling or giving away.


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## oronero (Aug 24, 2012)

I was not trying to start an argument, just trying to point out that no valid answer could be given with the statement you made in the opening post.

Good luck with your hunt and your thinning down of possessions.


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## canoeman (Mar 3, 2011)

Please remember that as a Resident with a monthly pension of that amount *you must file* an IRS return yearly, you say nett but are still reguired to file pension/s and any tax paid providing dual tax agreement in place with country paying pension then tax paid offset against any possible Portuguese liability but as a single person thing you might have a* slight* tax bill


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## redbourn (May 8, 2013)

canoeman said:


> Please remember that as a Resident with a monthly pension of that amount *you must file* an IRS return yearly, you say nett but are still reguired to file pension/s and any tax paid providing dual tax agreement in place with country paying pension then tax paid offset against any possible Portuguese liability but as a single person thing you might have a* slight* tax bill


Thanks. This type of info is very important.

It's actually made up of three different pensions. UK US and Union.

At the moment I also get an Israeli pension, which I haven't included in my calculation because they will stop paying it 3 months after I leave.

I could of course return to Israel every three months for a quick trip. The Israeli pension is 250 euros a month = 750 euros.

Round trip is around 450 euros. A big hassle for 300 euros. But I might come back occasionally as there may be outstanding things here. And friends etc.

Michael


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