How much of your income goes towards rent?

[disneysteve]

Depends where in LA you want to live. I've always paid in CA at least 50% of income in rent. So do most of the people I konw. IT's not cheap.

Is it not possible in those areas to get a couple of roommates to defray the per person cost? I can understand that rents are higher but it seems to me like that would be a reason not to live alone. In college, I shared an apartment with 3 other guys, and the place wasn't all that big - just 2 bedrooms, a bathroom, living room and kitchen.

[LivingAlmostLarge]

My friend rents a basement room (pipes running through) 3/1ba apartment with roommates. It's still $700/month for his share of the smallest room. The heating sucks, the kitchen is really old, the bathroom is old and leaking, but hey location.

It would be double if he lived upstairs without pipes and drywall.

[HamSandwich]

Is it not possible in those areas to get a couple of roommates to defray the per person cost? I can understand that rents are higher but it seems to me like that would be a reason not to live alone. In college, I shared an apartment with 3 other guys, and the place wasn't all that big - just 2 bedrooms, a bathroom, living room and kitchen.

the sad part is is that I wasn't intending to live on my own =\ the 40% stat is based on living in a 2 bedroom 2 bath place. I don't think I could bare having an actual roommate to share a room with because I'm rather messy and like my privacy too much haha.

[HamSandwich]

Is it not possible in those areas to get a couple of roommates to defray the per person cost? I can understand that rents are higher but it seems to me like that would be a reason not to live alone. In college, I shared an apartment with 3 other guys, and the place wasn't all that big - just 2 bedrooms, a bathroom, living room and kitchen.

the sad part is is that I wasn't intending to live on my own =\ the 40% stat is based on living in a 2 bedroom 2 bath place. I don't think I could bare having an actual roommate to share a room with because I'm rather messy and like my privacy too much haha.

[disneysteve]

My friend rents a basement room (pipes running through) 3/1ba apartment with roommates. It's still $700/month for his share of the smallest room. The heating sucks, the kitchen is really old, the bathroom is old and leaking, but hey location.

Ok. How much does he earn? That wouldn't constitute 40% of income unless he only earned $21,000/year.

[buildmybudget]

Have you taken into account your debts and other financial goals? If you're swamped with debt, or have goals that you are trying to achieve, the only way to know how much you can spend is to work your way backwards and determine how much you can afford. I recommend starting with your budget, because that will tell you how much you can afford.

[LivingAlmostLarge]

$36k/year gross.

Most people pay around $1k.

[disneysteve]

$36k/year gross.

Most people pay around $1k.

So he is spending about 23% of income on rent which is quite reasonable. Even $1,000/month would be 33%, still not bad. He'd have to be spending $1,200/month to hit 40%.

[DC Metro Crab]

You want to live in a 1 bdr by yourself in a HCOL area, you're going to have a hard time staying under 40-50% of take home. Rather than go by rules of thumb, estimate your monthly expenses, make a budget. Include utility estimates, gas for car, etc. If you're comfortable with the numbers, then go for it.

I'm in a HCOL, paid for the luxury of always living by myself ever since college. I compromised on location in a gentrifying area. Paying 18% of gross, 34% of take home for an apt that includes all utilities and not including my SO chipping in half. Was at 50% and above in my early years of my career.

[crazyliblady]

How much of your income goes towards rent?

Hi Guys,
I just finished college and I'm thinking of moving out on my own now that I have a steady job. I was working with some numbers and a place that I have my eye on would cost 40% of my monthly income. Is that too much? How much of your monthly income goes to rent for you guys? Thanks in advance!

As a larger issue to consider before you actually move out on your own, try to come up with a budget before you move out. Consider all the things you will need to pay for every month - rent, utilities, insurance, etc. Also, make room in your budget for savings - long term savings, car replacement/maintenance savings, etc. In addition, before you are out on your own, save up some money -- enough for deposit and first month's rent on your new place to live, utility deposits, and money to rent a moving truck, as well as money to pay some people to help you with moving your stuff. I have found that having that kind of money available when I know I am going to have to move makes the process much less stressful. Good luck on your move and your start on your new life out on your own.

[Anya7]

Honestly I always thought the percentage thing was an odd way of calculating how high your living expenses can/should be. Too much variation in what your income is, what the housing options in your area are, versus what's really important: whether all your expenses (including the rent) add up to more or less than your income.

I live in a mildly high cost of living area, without an equivalent high salary. Right after I'd graduated college and moved out, my rent + essential utilities* was 45% of my after-tax pay. I live in one of the cheapest one bedrooms I've seen in the area - it can be a bit tricky to tell because my rent includes a lot of utilities and most places' rents don't. 2-bedroom apartments are going to run you at least 33-50% more on just rent, plus utilities probably won't be included. Maybe with a roommate I could've gotten the cost down to 37% or so, but that's still far above the "preferred" range and I just simply didn't think making 'home' a place to dread being was worth it. The percentages just aren't going to work for some people.

* I think it's important to consider rent + essential utilities (electric, gas, water, etc., not phone, cable, and so on) instead of just rent. The $800 place with all utilities covered is going to ultimately be cheaper than the $700 place where you will pay $150 in utilities every month.

I kept track of my expenses while in college, and what I did before looking for apartments was make up a budget with an estimate of my expenses, and then see what I had left over to either spend on rent or put into savings. I initially had a slightly lower number for my goal, but I found there really wasn't anything to be found in that range unless I wanted to live in an unsafe area (I had a real estate agent literally laugh in my face when I told her my upper limit). If you spend 40% of your income on rent and you have 20% left at the end of the month to put into savings anyway, what's the problem?

[disneysteve]

Honestly I always thought the percentage thing was an odd way of calculating how high your living expenses can/should be. Too much variation in what your income is, what the housing options in your area are, versus what's really important: whether all your expenses (including the rent) add up to more or less than your income.

That's true, but the rules of thumb do exist for a reason.

Elizabeth Warren's formula is 50% for needs, 30% for wants and 20% for savings. If you are happy spending only 20% on wants then you could have 60% for needs, including something like higher rent. So it depends a lot on your lifestyle. If you are a low maintenance kind of person and will live frugally other than your rent, stretching the rule of thumb limit can be okay.

[LivingAlmostLarge]

I know a lot of classmates making $30k and paying $1k/month in rent. That's $1k of $2500/month. 40%, and it's not luxurious. It's great location, so they don't need cars period.

I think 40% works when you can do without a car and the expenses. Usually when you live further you pay more in transportation costs. And 40% usually buys you location.

I used to make $2k/month in LA, I had a bachelor apartment (West LA) for $800/month. Sigh, ridiculous.

So it's doable. I paid no taxes pretty much. My DH and I also had a mortgage of $800/month, broke was how we lived in SD and LA.

[Seeker]

the sad part is is that I wasn't intending to live on my own =\ the 40% stat is based on living in a 2 bedroom 2 bath place. I don't think I could bare having an actual roommate to share a room with because I'm rather messy and like my privacy too much haha.

How about 2 bed / 1 bath ?

What is your income?

Top-end places in LA are like 2k/month and more.... split between two people would be like 1k or more per month.

But why not shoot for the middle? There are very livable apts for less than 2k/month. What part of LA are you looking at?