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My rent is 20% of my net monthly income (a retiree pension) and it includes water/sewer. I have a washer/dryer in the apartment and a dishwasher in addition to standard appliances. Everything is electric. I have a 2b/2b modern apartment in a nice suburbanish neighborhood. My electric runs between $40 - $80 per month and is most typically in the $60 range. I pay off my credit card in full monthly and have no loans. There's no state income tax. Food is expensive only because there is a tax on it and I'm retired (meaning because I'm home more, I buy more groceries than when I was working). On the other hand, I eat out less frequently. Gas for the car is cheap here and I'm not commuting to work so that's a big savings, too. The biggest expense is cable (TV, internet and land line) and I could save money there if I wanted to. No dry cleaning since retired, either. I live in machine washable play clothes which also makes my clothing expense cheaper. Cell phone (a not smart phone) is another expense. No toll roads or toll bridges, here.
If you want to know the truth, I have more discretionary money as a retireee than I had when I was working, not because of income (which is much less) but because, as I have discovered, it was expensive to go to work. I moved away when I retired. I've been retired 7.5 years and my rent for a twice as big apartment here is still less than my last rent payment in Maryland.
I paid $550 a month for apartment and garage with all utilities included until just a week ago (actually I must pay through the end of December)
Now I rent a house for $600 and have to pay utilities which will probably average $125-175 over a year depending on how long I stay (highest in the winter)
I take home probably $1250 every 2 weeks if I work no overtime, not counting the 10% after taxes that go to purchasing stock (at 15% discount to share price) and 6% that go into retirement and get matched.
So I don't know... 25% of gross income does towards housing right now? If I owned any home that isn't a dump I'd be paying more like $1100 per month... renting is substantially cheaper as long as I don't need the extra square footage of a larger house.
There is a reason for the cheap rent. While things may be cheap, so is the pay, upward mobility, and there is nothing to do around there, hence why people are not flooding in there and driving up housing costs.
I rather give out 70% of my income to rent, than live in some boring place.
Yes, it's why the Wall Street Journal's Real Estate section Friday did a frontpage article on Cleveland
NYC? No. But it has a surprisingly good food scene (from someone who has been to Daniel and Jean Georges in NY). Lola, Crop, and the dearly-departed Three Birds were fantastic places in our year in Cleveland.
I pay about 23% of gross income/month for rent. It's about 38% of net income/month as I have a lot of deductions for investments, taxes, etc.
Just for fun I was checking out rental rates for San Francisco, especially the good areas like Pacific Heights. The cheapest I found was a studio apartment $2800/month. Most rental homes were in the $4,000-$6000 range/month. These were houses with around 800-1000 sq. ft.
Sooooooooo, if you wanted to rent that studio and stay in the recommended level of 25% of gross income, you'd have to be making over $10,000/ month......to live in a studio apartment. Amazing.
I paid $550 a month for apartment and garage with all utilities included until just a week ago (actually I must pay through the end of December)
Now I rent a house for $600 and have to pay utilities which will probably average $125-175 over a year depending on how long I stay (highest in the winter)
I take home probably $1250 every 2 weeks if I work no overtime, not counting the 10% after taxes that go to purchasing stock (at 15% discount to share price) and 6% that go into retirement and get matched.
So I don't know... 25% of gross income does towards housing right now? If I owned any home that isn't a dump I'd be paying more like $1100 per month... renting is substantially cheaper as long as I don't need the extra square footage of a larger house.
Wow. I am just amazed that it's possible to rent a whole house for $600 a month. You can't even get a studio apt. for $1000 where I live.
Wow. I am just amazed that it's possible to rent a whole house for $600 a month. You can't even get a studio apt. for $1000 where I live.
Not to knock the person who posted that, but you also might ask what type of house or what neighborhood you get for $600. Even in a relatively low cost area like Northeast Ohio, you can get a house for $600 but you are likely not getting much of a house or neighborhood for that price. Either that or you're living in a rural area.
On another note, what is the logic in basing housing affordability on your gross income? What sense does that make? A person could have a rent that is only 10% of their gross yet have the rest of their net eaten up by other debt payments. Basing affordability on income without other expenses factored into the equation is a recipe for failure. It's why mortgage companies will say a person can afford x amount, but they can't _really_ afford it.
Not to knock the person who posted that, but you also might ask what type of house or what neighborhood you get for $600. Even in a relatively low cost area like Northeast Ohio, you can get a house for $600 but you are likely not getting much of a house or neighborhood for that price. Either that or you're living in a rural area.
On another note, what is the logic in basing housing affordability on your gross income? What sense does that make? A person could have a rent that is only 10% of their gross yet have the rest of their net eaten up by other debt payments. Basing affordability on income without other expenses factored into the equation is a recipe for failure. It's why mortgage companies will say a person can afford x amount, but they can't _really_ afford it.
Yeah, obviously deeply indebted individuals/households will need to spend less on rent. Landlords may not account for that, but of course if they check tenants' credit reports they can reject a tenant that could not afford both their debt and the rent...
I pay about 3 to 5% of my annual gross salary. However, I am sort of in the middle of nowhere, so rent is cheap, unlike more desirable places such as a major metropolitan (e.g. DC, NYC, Boston, Chicago, LA), or even their surrounding areas (it's noticeably cheaper to live even half an hour to 1.5 hours away from those major hubs, but can still be high).
I've heard accounts from those who move to Bentonville, AR to work for Walmart HQ... their take home pay is typically 9x to 16x their mortgage!
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Most rental homes were in the $4,000-$6000 range/month. These were houses with around 800-1000 sq. ft.
