What kind of salary is needed to live in some of these neighborhoods? (Chicago: rent)

[Halsted]

Hi, lifetime Chicagoan here. As a kid I lived in Roseland for a while before we moved to Ashburn on the SW side where I currently call home when I'm not on campus. I'm pretty set on continuing to live in Chicago after I graduate from college, but I don't think I want to be on the far south side anymore for a number of reasons. I was wondering if I could get some rough estimates of how much someone would need to earn annually in order to live in these neighborhoods. There are probably so many factors other than salary that can determine where one can live, but for now this is really all I can go by.

Old Town: I love the trees, the brick and stone rowhouses, and the L tracks weaving through. Can't really explain it, it just feels like a really vibrant neighborhood.

The Gold Coast: Also really nice. Never really wanted to live in a giant hi-rise, but I really like some of the old brick and stone houses along Astor and Dearborn.

West Loop: Went to high school in this neighborhood and liked it a lot. There are some really nice houses on Laflin, Jackson, and Adams as well as a bunch of new residences going up throughout the community area. Little Italy is really nice too.

[MannheimMadman]

On your own? Or with a room-mate?

You could easily take the average rent and multiply it by 4 to get a rough idea of where you ought to be. For instance, if average rent for the type of unit you're looking for is $900, plan on taking home at least $3600 a month. They say that housing should never take up more than 30% of your gross pay, but I always, always make sure it's net pay. So if rent is 25% of net pay, the other 5% can be devoted to utilities, parking, internet..etc.

[Chicago76]

I like Halsted's rule of thumb. To give you an idea of my experience using ratios (because it was a long time ago when I was in your shoes).

My first place was with a roomate. My share of the rent came to 17% of my gross pay (and I wasn't raking it in). I was never hurting for money, but I wasn't saving a lot either, considering the furniture I needed to buy and the excitement of living in the city leading to a lot of bar tabs, restaurant bills, concert tickets, etc.

In a couple of years, my roommate moved in with his girlfriend and I wound up in my own place, which was an "okay" 1BR. Luckily, I had a significant pay raise right as this unfolded. I ended up spending 18% of my gross pay on rent. I saved a bit more, and was still spending freely on entertainment.

To live comfortably (without financial worry) while being able to really enjoy the city in your early/mid 20s while putting together a rainy day fund, 20% of gross is a good rule of thumb. This is probably roughly equal to 25% of net.

If you luck into utilities+internet being included, then you can probably bump the 20% gross up to 25%. I knew people who did it on 40% of gross. It can work. Those people are also the same people who lived on pasta and nights of cheap beer on their fire escape though. If you're thriftier or don't have the need to run around the city 5 nights a week like I did, then you're probably somewhere in between.

I found keeping things below 20% of gross before I got through the "being on my own with so many choices at my fingertips" phase really helped. My place was a dump, but I didn't really care, because I wasn't home much anyway.

[Muppet123]

Roughly 25% of my net income goes to my mortgage for my loft.

[MannheimMadman]

These are all good anecdotes. Like Chicago76 says, you can definitely do 40-50% of your income on rent, but things will be tight and you'll be worried all of the time. If you keep the ratio low, you'll not have to stress about a $150 People's gas bill. My life has been so much less stressful financially since I started to live at or below my means.