I have a rent question...

[From The Ashes]

Is there a formula that tells me how much rent I can afford? I want to live somewhere nice, but I don't want to spend too large a percentage of my take-home.

[Rabrrrrrr]

1. "One month's rent should be less than 1/40 of your salary" is the standard NYC rate.

I have no idea about the rest of the country. Probably less.

But the only real way is to look at your monthly income and your monthly expenses (without rent), and see what you have left over.

[Xithras]

4. Did you mean 1/4th?

I don't think I know ANY renters who make 40 times their monthly rent!

[Rabrrrrrr]

6. No, 1/40 of salary. 1/4 of salary would be insane.

[Xithras]

7. Yearly then?

I was thinking about a monthly basis. Montly rent being 1/40th of your YEARLY salary works out to about 1/3rd of your monthly income, which sounds about right nowadays.

[Rabrrrrrr]

8. Yes, one's annual income.

I never think of "salary" being anything but annual, but I suppose it could be.

I should have been clearer.

[huskerlaw]

9. If your rent was 1/4 of your yearly salary,

you'd be homeless pretty quickly...

One month's rent should be 1/40 of your yearly salary. I think before taxes. That formula works in Los Angeles too, as far as I can tell.

[ChoralScholar]

12. Apparently I should be living in a much nicer place.

1200 dollars a month would rent me a freaking awesome house in Northern Arkansas.

[huskerlaw]

15. Hahahahaha

$1200 wouldn't get me much of anything here in LA. ;)

[Tuesday Afternoon]

5. yearly salary ?

[rug]

2. When this country once had an economy the formula was one week's pay for one month's rent.

[Xithras]

3. self-delete

oops, wrong spot

[Gormy Cuss]

10. The other way to calculate it is to expect to pay about 30% of your gross income on rent.

Use your annual income, not 4 x weekly because there are 52.2 weeks in a calendar year.
Of course, if you can find decent housing for less than 30% of your income it's even better.

on edit:{(4.3 x weekly gross income)* 30% }is the way to do it using weekly income.

[NMDemDist2]

11. my grammy taught me never pay more that 25% of your monthly income

on rent and try to include utilities (or at least some of them) in that figure if possible

today I think 30% would be max you should try for

[Bucky]

13. Most working class single income homes pay 50% of their income.

In case you're wondering why national personal savings rates were down.

[Ptah]

14. My rule of thumb is about one third of monthly wages.

Good to see you.

:hi: