Living and renting in New York City is not easy. It’s increasingly unaffordable, and wage growth just hasn’t kept pace with rent increases. But that fact alone isn’t enough to keep people from NYC. If we know one thing for sure, it is that people will always flock to New York for school, work, art, opportunity etc. But how much money to rent in New York City does a person need live here? Here are a few things to keep in mind when considering housing options in New York City:
1. Divide your annual salary by 40. That’s the rent you can “afford”.
In NYC, most landlords will require you to make at least 40x the rent to be eligible for the apartment. For example, if the rent is $2,000 per month, your annual salary needs to be $80,000 (40 x $2000 = $80,000). Keep in mind that the median household income in NYC is around $75,000, and the median rent is $3,300. So if you work the numbers, the majority of New Yorkers are rent-burdened (they spend a larger percentage of their income on rent than what is recommended).
2. Consider having roommates or someone to split the rent with.
On your own with a $75,000 salary you could rent an apartment for $1,875 ($75,000 divided by 40 = $1,875). The problem is that there aren’t a whole lot of apartments available in NYC for less than $2,000. They exist, but they are few and far between. You may also have to make concessions on your preferred location. What to live in Manhattan? That’s going to make it even harder. Living and sharing the money to rent in New York City with others opens up your pool of options and helps alleviate costs.
3. Have 3 months rent saved up.
Renting in NYC is expensive. You’ll need to pay first month’s rent, 1 month security deposit, possibly a broker fee and moving costs. This all adds up, so landlords will want to see a bank balance that can accommodate all these expenses.
4. Explore affordable and stabilized housing options.
If you are striking out in the rental market because of high prices, it may be worth exploring affordable housing programs. You could also narrow your search to rent-stabilized apartments with lower rents.
Are you apartment hunting? Be sure to browse available listings on openigloo and avoid poorly managed properties.