Percentage of Income on Rent (New York, York: for rent, law school, landlords)

[Away]

My situation: 3 kids (1 school age), husband working in Manhattan, moving from Georgia.

What percentage of income does the average New Yorker spend on rent per month? I am trying to come up with a budget. We are willing to dispose of both cars if we can find a "walking friendly" area. I am just not sure what to calculate.

Thanks!

[apvbguy]

Originally Posted by Away

My situation: 3 kids (1 school age), husband working in Manhattan, moving from Georgia.

What percentage of income does the average New Yorker spend on rent per month? I am trying to come up with a budget. We are willing to dispose of both cars if we can find a "walking friendly" area. I am just not sure what to calculate.

Thanks!

between 30-40% would be pretty close, don't forget to add in your utilities

[newtoli]

Everyone always says the guideline should be 30% of your income, but a lot of people pay up to 50%.

Keep in mind if you're moving to Manhattan, most landlords will require you make 40x the rent annually.

[Rudbeckia]

A finance advice person would tell you to spend no more than 35% of your net income on housing. That includes your utilities. However, it's hard to go by this rule in this city.

[Otis_Nevins]

Assume 60% of your net will go to rent if you're "only" making 40X the monthly rent...

[newtoli]

Originally Posted by fubar_bohica

Assume 60% of your net will go to rent if you're "only" making 40X the monthly rent...

Lets say the rent is $2000 and salary is exactly 40x that at $80k. $80k after taxes (Married, 3 deductions for the kids) will be a little over $5k net a month, putting rent at about 40% of net pay.

[Otis_Nevins]

Curses, foiled by the math again!

That formula makes a lot of sense. Now, $2,000/month is what a little studio (400 sf) commands, this is a family of five, needing two bedrooms. A two-bedroom apt in Sty Town starts at, last time I checked, $3500/month. 40 times that is $140,000, not bad... Starting salary for a recent law school grad... but taxes in this city/state run a little higher (though that's really good money, it is, too!), with everything (social security, etc.) considered - and from a variety of sources - you'll end up netting around 60% of that or $84k or $7k,month, not bad... and thus spend 50% of your net on rent... and still have a nice chunk of change to play with every month.

This makes me think... with lower taxes and more take-home pay, the numbers go down... It also means that $80k is where the salary line starts for rents in Manhattan. Two people making $50k each can do it. So maybe things aren't so gloomy and doomy?