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What percentage of your net do you spend on rent (or your mortgage)?
Background behind this question:
I'd lived in Atlanta for over a decade and moved away to Chicago from 2012-early 2017. When I left Atlanta in 2012 I was spending 21% of my net on rent. I had a grand plan/hope to gain more experience and earn a higher income...then within 5 years return to Atlanta for the lower cost of living so that since I'd be making more, I could pay less of my income to housing. Long story short, I returned to rental prices as much as 30-70% higher than when I left. I am looking at an apartment that is indeed nicer than the one I used to live in in 2012, but it means I'd be paying 6% more in rent (27% of my net) than when I left. (I'm not really willing to compromise 'much' on the place as I'm living without a car so there is some additional savings transportation-wise whereas before I had a car and related expenses. I also now am working from home 100% of the time so I really need an appropriate space that I like since I'm home 'all' the time.) Spending 21% of what I earn (net) now puts me in the $900s 'max' for rent which wasn't too hard to do in 2012 but I find is much harder to do now.
So long story short I'm wondering where others are at as I know there are many wise people in this section of the forum. I'm going to be willing to bet that many of you who have made great financial strides aren't paying more than 15%-ish in rent (or mortgage) each month. Let's see what it pans out to be. I'm 38 and have always rented and now am finally actually starting to feel like I would come out better trying to find a super cheap place (one bedroom condo?) to buy next year. I've always liked renting and never really felt like it was a 'waste' like some do, but the rising rent amounts are starting to make me feel different fast.
My rent is 23% of my net. And by net I mean the amount left after taxes, medical insurance, 401k, and HSA, and transportation deductions/contributions.
We paid off our mortgage last year, but we have HOAs and property taxes on our condo which equate to 9% of our net (net is after taxes, right?).
I think we're about to finish a 2 year cash bonus soon so this number will go up to probably 11% and in a couple years we're going to turn our condo into a rental and buy a different condo. We'll have a mortgage so I'm assuming we'll be back at spending 20-25% when that happens.
We paid off our mortgage last year, but we have HOAs and property taxes on our condo which equate to 9% of our net (net is after taxes, right?).
I think we're about to finish a 2 year cash bonus soon so this number will go up to probably 11% and in a couple years we're going to turn our condo into a rental and buy a different condo. We'll have a mortgage so I'm assuming we'll be back at spending 20-25% when that happens.
Yes...net is after deductions (i.e., taxes, insurance).
My rent is 23% of my net. And by net I mean the amount left after taxes, medical insurance, 401k, and HSA, and transportation deductions/contributions.
I was using the same definition of net so this makes sense.
Does the amount you pay in rent (23% of your net) feel 'comfortable' for you? Do you feel you are able to meet your savings/investment goals?
Our mortgage, taxes, insurance is 25 percent of our net pay. Granted, we both choose to save 7%+ into 401ks to get company matches. Our net pay would be higher without that saving and push the percentage lower.
17% of gross, I'm not a fan of looking at the net figure as our net income includes maxing 2 401ks which could be stopped at any time if needed. I believe lenders tend to work off of gross as well
17% of gross, I'm not a fan of looking at the net figure as our net income includes maxing 2 401ks which could be stopped at any time if needed. I believe lenders tend to work off of gross as well
I understand.
So the interesting thing is, if I look at it from the point of view of my gross income, then in 2012 (while still in Atlanta) I was paying 17% of gross to rent. And the apartment I'm looking at now would also put me exactly at 17% of gross going to rent as well.
I wonder if I should be looking at it this way instead...sure makes me feel a little bit better (I'd rather be paying the same % or less as I get older than a higher % of income to housing....)
This is for my kid who still rents, I think she spends less than 25% of her gross.
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(I'd rather be paying the same % or less as I get older than a higher % of income to housing....)
