How much rent can I afford if I make $50K/year?

Sorry, this should belong in rentals.

just about every big landlaord will say reflexively that you need to make 40X monthly rent. Or $1250.

Jason is a landlord.

Mom's basement.

$1250

which is the same as 30% of gross...

Section 8

http://portal.hud.gov/hudportal/HUD?src=/topics/housing_choice_voucher_program_section_8

It depends on your priorities. The other posters are correct that 30% of your gross income, or $1250, is the MAX you should be spending on rent. In my opinion 20% is more responsible, so it's better to find a room in Brooklyn with flatmates for 800 a month or so.

you can afford the absolute cheapest apartment you can find. it doesn't have to be section 8, you can find plenty of sh*tholes on the ues/uws in the broken up rundown townhouses that had been in the family for over a century. look for buildings run by the ne'er do well heir and not a management co, those will be at a discount.

lucillebluth, I think leaving the advice as "absolute cheapest apartment" is adequate. Maybe I'm wrong, but is there a SE search for "sh*tholes on the ues/uws in the broken up rundown townhouses that had been in the family for over a century" or "buildings run by the ne'er do well heir and not a management co"?

one dollar, Bob...

there is not. but that's where the bargains are in prime areas. frankie wilson and angela veltri on the uws are landlords like that.

mid-20s and even into late 20s, I was living with roommates paying between 900 an 1500 / month. For me it was a win-win. I got way more for the $$, plus I enjoyed living with roommates more than living alone. Obviously very individual, though.

In terms of what you can afford, a lot depends on what else you spend money on (ignoring qualifying for the lease, which is a different question). Your taxes are probably low, so I am guessing you take home $3000-3500 / month. If it's critically important for you to live in a certain apartment and a certain neighborhood, and you spend minimal $$ for other stuff (say your work pays for a uniform and meals, you don't drink, etc.), you may be able to spend as much as $1500 or even $1800 on rent and live on the rest. On the other extreme, if you prefer to spend $$ on going out, travel, or you have an expensive hobby (say road biking), and you don't really care where you live, you're better off living in the absolute minimum and paying $600-800.

When I was just out of college, my salary was $40K plus I had school loans. I really wanted to be in Manhattan and enjoy Manhattan, but didn't care where I lived. So I rented a sh*thole on the 5th floor of a walk-up in Spanish Harlem with a roommate and paid $650/month in rent. I probably spent double that on going out every month. It worked for 2 years, then I got sick of it.

"plus I enjoyed living with roommates more than living alone."

That's a good way to spin it.

"you may be able to spend as much as $1500 or even $1800 on rent and live on the rest."

You MAY, but thankfully most landlords won't let you.

The standard multiplier for qualifying tenants for rent is they must make 40 times the rent. If you can't prove that you make at least 40 times the rent, you will not get the lease. Period.

"is there a SE search for "sh*tholes on the ues/uws in the broken up rundown townhouses that had been in the family for over a century" or "buildings run by the ne'er do well heir and not a management co"? "

These cost more than that on the West Side now, maybe $1400 for the tiniest studios... however it is possible that, somewhere far enough east that you might as well be in Queens, there is a real shithole studio for $1250

I remember even 15 years ago brokers saying "you make $45-50k, you're not going to be able to live alone".

Now, after 15 years of inflation....

NYCMatt: You hit the nail right on the head. Forty times the rent = 30% of income. Usually, if a LL deviates below that, you can be sure it might be shady. Go East, young man! For $1250 and a short subway ride from Queens, you would be fine. A guy in his 20's with no debt? He has it right so far!

If you want to live in NYC, you can make it work. That's what people do.

"If you want to live in NYC, you can make it work. That's what people do."

He has only two options to "make it work":

1. Live with roommates

2. Get a 2nd job to boost his income.

I know somone who pays $1200 for a one bedroom in Inwood. You CAN get something for that low by yourself.

But having roommates CAN definitely be more fun than living on your own, especially when you have social roommates and you are young and new to NYC. Preferable, even. Anti-social misinthropic a-holes like Matt don't get that, but many 20-somethings do. Thus you have Murray Hill.

You can find very nice, albeit somewhat small 1BR walkups in Greenpoint for $1200. No roommates required.

NYCMatt, there is always a way in NYC. When I first moved to NYC, I had a roommate but we did not even come close to making 40x the rent combined. Heck, I was paying over half my take home on rent. I wanted to live in NYC so I did. Ate cheaply, found all the cheapest places to go out etc.

Just because you did it doesn't mean it was a prudent thing to do.

I think the general rule of thumb is to spend 1/3 of your net income on rent/utilities if you want to have a comfortable living in the city. Of course everything else such as school loans, active social life, spending habits etc. will vary. Also factor in if you want to save a bit of that paycheck every month or live pay check to pay check.

After I graduated college I was spending $1k on rent each month in my early 20's. I was making a little more than you, but I was able to save quite a bit each month also by cooking breakfast and dinner mostly.

roommates are also a great way to keep your rent low while keeping your social life active. It's very difficult/rare to find a 1br in NY for around $1k

Hey guys,
Thanks for your replies. I don't need to live alone. I'd actually prefer to look with a roommate. I should have clarified that I meant how much of the rent SHARE can I afford.

Woops, was logged into my friend's account (who has Insider).

In my early 20's on your salary, I paid $1450. I didn't save much, but I lived in a great location (Gramercy) and was near lots of great affordable dining/ night life options (East Village, LES). You can absolutely live in Manhattan, but may need to stick with a walk-up or an apt that is a bit of a hike to the subway.

If you prefer to live with roommates like I did (we must be poor and pathetic and just rationalizing it to ourselves, right Matt?), you should have no problems.

As for "prudent", it totally depends. I know plenty of people who stick at/below the 30% rule on housing but are to their ears in debt because they are stupid on other things. And I know people who spend more and are fine because they balance out by spending less elsewhere. Housing is just one part of the equation, although a big part.

I am in my mid 20s, make about $80k and I pay $1250. Your expenses in Manhattan add up. I feel like if I paid more rent, I could hardly save.

I am in my mid 20s, make about $80k and I pay $1250. Your expenses in Manhattan add up. I feel like if I paid more rent, I could hardly save.

You can easily live in a doorman bldg in East or Central Harlem with a roomate for $1250, or if you want to be near nightlife, you can pay more for a walk up in Murray Hill or HK with a roomate. A tiny, tiny place, but near bars.

And the first option (harlem) means your own rather large for manhattan bedroom. Maybe even your own bath. Depends on what you want.

...or Astoria...

spend 50% on rent...nothing better than living in manhattan otherwise you'll be spending hundreds a month on cabs taking you home to queens or bklyn.

You go, Fairway! By NYC standards you are eligable to pay $2000 and thus paying $1250 you are saving $750 per month! I know you realize this, but it needs to be said. We now have another one on this thread who is getting it right.

"spend 50% on rent...nothing better than living in manhattan otherwise you'll be spending hundreds a month on cabs taking you home to queens or bklyn."

That's the dumbest advice yet.

NYCMatt...why is that dumb?

Yeah, but my living situation is not ideal. People like me and the OP need to find girlfriends with decent incomes to move in with... Then you have a comfortable income for a $2500 1 bed, which is not going to be a bad apartment (whereas a $2500 2-bed for roommates is not going to be a great apartment, let alone a $1250 studio)

Julia, if you don't get what's "dumb" about a budget where HALF of your take-home goes to housing, clearly there's no talking to you.

Re: if you don't get what's "dumb" about a budget where HALF of your take-home goes to housing, clearly there's no talking to you

Matt you're almost right on this one -- but dont forget there are plenty of singles in NYC earning $150,000+ with zero debt. Take home $7500+ and even if $3750 is spent on housing it's pretty damn easy to eke out an existence on almost $4000 a month cash.

And yet.. still pretty damn foolish.

Why exactly? What If I took home $1 Million? Is it foolish to spend $500,000 on housing if the other FORTY TWO THOUSAND DOLLARS A MONTH is all play money?

FORTY TWO THOUSAND DOLLARS A MONTH is all play money?

And.....you can shop til you drop! Oh wait, that was the 90's. Isn't that pretty much how we got into this mess. And as "we" I include myself. The only thing Susie Orman ever said that made me take notice was "We now need to enjoy saving money the same was we did when we spent it" That's the decade we're in.

OK, I'll save an extra $10,000 a month. Now I'm down to only $30,000 a month to spend on food, cocktails, taxis, magazines etc. Oh and a new pair of running shoes every few months.

Tell me again why it's "foolish" to spend the first half million (50% of net) on housing?

Rather maybe it's that Matt is incapable of thinking outside his small-minded middle class snob mental box.

If you want to live in the city and can make it work, do it. But you can certainly take the NYCMatt route, stay home in Queens, save up your pennies, buy into a coop and wield unlimited power over the underlings.

Re: and wield unlimited power over the underlings.

Yup. Life is about the grey areas, not black and white formulas. Especially if blind adherence to naive formulas has real impacts on other peoples' lives. But, of course if you're a petty power hungry little tyrant....

"Tell me again why it's "foolish" to spend the first half million (50% of net) on housing? "

Because you cannot invest or save enough to make certain you can maintain that lifestyle when times get rough and/or when you get old. And every article ever written on retirement saving says the earlier you start in life the less you have save each year.

So unless you plan on never getting sick, never losing your job, and dying before retirement, you are a complete and utter moron.

And no, Julia, you don't take cabs everywhere. I did not when I moved here and lived off of 25k a year in student loans while getting my MBA. I learned that the subway and buses run all night.

Somewhere recently I read an article where most people are now paying 50% of their income for rent. And yes, you do take cabs if you're going out at night till 12-1 am. Do you think she'll start taking the subway at that time.

also, 50% will only be for a short while until she starts making more money.

julia, I take the subway home at all hours of the night, sometimes past drinking time, and there are always lots of decent, upstanding young persons of all genders, in couples, in groups, and (yes) women alone. The truth is that the subway is extremely safe in terms of crime. So is the walk home from the station in almost all neighborhoods that these young persons would move to.

While as a rule, 50% of take home income is certainly a lot to spend on housing, I think the viablity of it depends on a number of other factors too - such if you expect to make considerably more in the future, if you already have significant savings, if you have no debt, or if you do not plan to live in the city forever and want to make the best of the time you are in NYC. And as newbuyer99 said, some people prefer to spend their money on housing and may save significantly by doing thing such as cooking at home, not spending $100 every Saturday night on drinks, and taking cheaper vacations.

"also, 50% will only be for a short while until she starts making more money."

IF she starts making more money.

Re: So unless you plan on never getting sick, never losing your job, and dying before retirement, you are a complete and utter moron

What are you talking about? The topic is whether or not I can afford a rental, now, not when I'm 85. My point is that if you make enough money, you can spend practically ANYTHING you want on housing and still afford a "normal" lifestyle. That 50% rule is utter BS as a hard and fast standard.

"That 50% rule is utter BS as a hard and fast standard. "

Not for the vast majority of people.

And keep in mind, for most landlords, you have to show proof you're earning at least 40x the monthly rent.

Re: Not for the vast majority of people

well since it's not 100%, maybe you'll consider making decisions regarding your current and prospective shareholders on a case by case basis

We do.

But never would we allow total housing costs to exceed 28% of HHI.

I would say that $1000/mo.
I would say you need a roomate or two.
you could live alone in Oshkosh or find a roomie and live in Hippsterberg or Long Island Shitty, lower east side or Harlem. You could search hard for a one bedroom and share the bedroom but two is best.
Not so bad, find a hard working fun roomie that travels a lot with no substance abuse problems.
Your dreams will come true.
Skimp on the rent and spend your money on good times.
Only young once!

we spend around 50% of take home on rent. it works for us now and for the next few years. when we made the decision to stay in the city until my husband is up for partner, we decided that living comfortably for the next couple of years (with two small children) was a priority.

"What are you talking about? The topic is whether or not I can afford a rental, now, not when I'm 85"

If you spend 50% of your gross income on rent in your 20s and 30s, you will have significantly less money when your SIXTY five, and nothing when you are 85. Its moronic advice to give anyone, especially when the rest of your post talks about all the money you will have left to party it up. You COULD spend 50% of your rent, if you otherwise lived very frugally, and thus still saved at least 15% of your gross income every year for retirement. Or even a rainy day that might happen when you are 29. But this is not at all what you recommend.

Therefore, you are a complete fool.

Find a roommate and rent the apt in the city. You won't be there through your 20's and 30's. Most likely a year or two.

Just don't go to SF thinking it is a mediterranean climate.

Bob, I've always wondered, are you also Matt?

No other names for me.

Jason, read my original example. It's 50% of take home pay. And my assumption for net was 60% of gross.
Matt, a quote comes to mind: a foolish consistency is the hobgoblin of little minds.

"Matt, a quote comes to mind: a foolish consistency is the hobgoblin of little minds."

Well, then there are quite a few hobgoblin landlords in this city.

Very few will extend a lease to anyone who can't prove they make at least 40 times the rent. Period.

Have you literally never heard of a guarantor?

Have you literally never heard of budgeting?

You are so dumb. You are really really dumb.

How so?

Because I live within my means?

Why does this have to be so black and white? When I graduated from college one of the main reasons I took a job in NYC was because I wanted to live in Manhattan. I was going to live in Manhattan no matter what or there was no point to me taking the job!

So I moved into a small studio that cost me more than 50% of my take home. I struggled for a while (though not THAT much, I am not a big drinker/party animal) but I had faith that through my ability I would make more money and then I would be able to save and pay a more reasonable percentage.

Now I am making more than 3x what I made when I first moved here (10 years ago) and I am currently living in the same studio which now is less than 20% of my take home income. I save over 25% of my gross income and through my aggressive savings I saved up enough for a down payment on a condo.

Soooo - my point is - yes 50% of your take home is a lot to pay for rent and if you did that your entire life you wouldn't be able to save enough. But if living in Manhattan is important to you and you work your way up the career ladder, then those first few years of overpaying won't mean anything in the long-term.

Assuming a landlord would be willing to take on the risk.

Most won't.

Mine did - extra month's security deposit (which I was paid back after paying my rent on-time for several years)

Jish, you wanted to live in NYC and made it work. It's simple.

And found a landlord willing to take an extraordinary risk.

50% of take can in fact be 30% of gross, so I certainly could have over-insulted some folks, sorry. However, its still not advisable to spend even THAT much. And yes they can mean that much in the long term because if you understand compounding, you will know that saving 5,000 a year in your early twenties ends up being worth far more than maxing out your 401k contribution in your late 30s. When you retire, that is.

The point is there a lot of landlords willing to take that risk. That's why I said if you want to do it, you can make it happen. People do it all the time in NYC.

you'll enjoy living in manhattan, no matter what the size of the apartment so much more that paying 50% of your income will work out. Get a second job for a couple of nights a week.

Well that Julia is exactly the advice I give 20-somethings. Do NOT do it unless you get a second job.

BUt you entirely overstate how much fun one can have in Manhattan (the hip parts anyway.) Plenty of people in their 20s have plenty of fun living more cheaply in East or Central Harlem, Asotia, Wburg, etc.

I actually had no fucking money to go out when I DID live in hipper areas, and wish now I had been smart and lived in a cheaper area THEN. Now that I can easily afford to live in any area of Manhattan and still be well under the 30% of gross rule, I chose to live in E Harlem. In no small part to make up for NOT having saved more when I was younger. (Including when I lived in SF.)

Its fucking stupid to tell people they can always save tomorrow. Unless you have rich relatives, its fucking stupid. Save when you are young.

Jason, admit you're just poor. Who "fucking" else lives in east harlem?

I'm moving to a new apartment and paying a little over 50% of take home. I have good credit, a decent amount of savings and am putting up a few months rent, so it wasn't a problem. I wouldn't want to be doing this for the next 10 years, but for a few years I am quite happy to. It's not for everyone but as someone else mentioned, if you want to make it happen, there are ways (including of course a guarantor)

yoj...thank you...it can be done..enjoy your new home.

I'm with Jim on this one. Jason, you live in East Harlem and that's your advice for young professionals? You have zero street sense. I joke because you think that San Francisco is Mediterranean, but this is truly tops.

i kind of agree with jason that you should focus on saving when you're young, b/c the future is often unpredictable. we decided to spend 50% on rent after accumulating a significant amount of savings and retirement. So, moving forward for the next 2-3 years with plan A, B, or C, the risk of saving little to no money was pretty insignificant.

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