how much to pay on rent?

[blue_monday]

I'm currently making a little over $30,000 a year and live in San Francisco. I'm currently paying $750 a month but am looking at other places to live. Finding a nice place for $900 is easy, but should I be paying that much considering how much I make a year?

[AshleyJordan]

Look at your other expenses. The ideal (based on what I learned in planning school) is 30% of your income. . . which would be the $750 you're paying now. If you don't have a lot of debt, $900 might be doable, but it could be tight.

[vxmike]

Look at your other expenses. The ideal (based on what I learned in planning school) is 30% of your income. . . which would be the $750 you're paying now. If you don't have a lot of debt, $900 might be doable, but it could be tight.

Shouldn't the ideal be the smallest percentage possible that still obtains a place you're content with?

To the orginal poster - seems you probably bring home about $2000 a month after taxes. I certainly don't think it's wise to spend the $900 since that's almost 50% of your after tax income, and you live in one of the most expensive cities in the country. Unless you have plenty of excess cash left over with your current rent, I can't recommend it...

[AshleyJordan]

Shouldn't the ideal be the smallest percentage possible that still obtains a place you're content with?

Absolutely. In calculating affordability, we put it at 30%. Generally, it's hard to go much lower than the 30 percent and still have positive cash-flow in a government funded building, which is why it's our benchmark. Also, if it's just a "regular" private apartment in a metro area and you're just starting out, making $30K or so, it might be very tough to find something lower than that (in that case below $750 in San Francisco.) If, for example, you're making $75K, you can spend way less than that 30 percent and still live comfortably.

[pisces2473]

I think you should ask Kitty--she lives in SF area.

I make 28K and pay $650--but I live in the burbs of CT, I rent from family, and my rent hasn't gone up in 4 years. On Saturday, I will be moving into a condo with my fiance--the rent is $1000/month in the same town I live in now, and our combined income is a little over $60K.

My share of the rent is $500 x 12 months = $6000 (or 21% of my salary)

Currently, my rent at $650 is almost 28% of my salary.

[yankeeyosh]

Right now I pay $1,100 a month, which for my salary, $50K, is far too much. I think that a "reasonable" rent for someone in my salary bracket is about $800 or so, which is what I will be seeking once the next three months lapse (assuming I stay in boston).

[pisces2473]

Right now I pay $1,100 a month, which for my salary, $50K, is far too much. I think that a "reasonable" rent for someone in my salary bracket is about $800 or so, which is what I will be seeking once the next three months lapse (assuming I stay in boston).
Mark, I just did the math, and your rent is exactly 26.4% of your income. Not bad at all, ESPECIALLY for Boston!

[Kitty]

I used to live in San Francisco and at the time I was making around 40k. My rent was $650. I found that to be hard to cover.

My rent is actually the same now (still live in the Bay Area) but I make a lot more. I STILL find it to be rather a lot.

The rent you're paying sounds like a lot for your salary.

[SmilesSoSweet]

My rent is 24.4% of my monthly take home pay. That's actually not a bad percentage. When I lived in Orange County, CA it was about 35% of my monthly take home pay, but I also had a roommate to pay for the other half of the rent. Here I'm able to live by myself.

I'm now making more than I did when I lived in OC and I also live in a much more affordable city. The money that I've been saving because of the cheaper rent has been going to a savings account.

I've always heard that about 33% of your income is what you should spend on rent/mortgage. But there are so many people who can't follow that rule for whatever reason.

[Kitty]

Do you calculate based on net or gross? Why do I always forget this.

[pisces2473]

I used to live in San Francisco and at the time I was making around 40k. My rent was $650. I found that to be hard to cover.

My rent is actually the same now (still live in the Bay Area) but I make a lot more. I STILL find it to be rather a lot.

The rent you're paying sounds like a lot for your salary.
WHAT???? You find $650 a lot on your salary!?!??!?! :?:

It wasn't even a 5th of your salary when you were living IN San Francisco.

[SmilesSoSweet]

Do you calculate based on net or gross? Why do I always forget this.

That's where I was getting confused too. I first did it with my gross pay and it was 15% of my gross income. Then I calulated it for my net (take home) pay and that ended up being 24.4%.

[pisces2473]

Do you calculate based on net or gross? Why do I always forget this.
Well, I was doing mine on gross...only b/c I have no idea what my net will be for this year (new job and all).

Don't worry, I always forget it too.

ETA: Okay, I just did a guesstimate of my net...and rent was exactly 30% of my net income. Crazy.

[Kitty]

WHAT???? You find $650 a lot on your salary!?!??!?! :?:

It wasn't even a 5th of your salary when you were living IN San Francisco.

Yeah, I don't know. I guess it's a combination of things: high COL area, I put 10% into retirement, and I have loans and some debt.

[wordsmith]

My rent is about 16% of my crappy salary (gross, not net). Combination of low COL where I am, and a severely discounted rental agreement.

[pisces2473]

Yeah, I don't know. I guess it's a combination of things: high COL area, I put 10% into retirement, and I have loans and some debt.
When you say high COL--you mean for other things besides rent, right? Like cost of groceries, gas, car insurance, etc?

Because $650 is a steal for where I live...and my town is NOTHING like SF. LOL

[Kitty]

When you say high COL--you mean for other things besides rent, right? Like cost of groceries, gas, car insurance, etc?

Because $650 is a steal for where I live...and my town is NOTHING like SF. LOL

Yup - all that stuff adds up.

And yeah, I refuse to pay a lot in rent because I think it's pouring money down the drain. I've always had roommates (including D!) so, I've never actually paid for an entire place all to myself.

My flat in SF was a two bedroom and I think the rent was like $2k total. It was REALLY run down, too. I also got a deal because I was renting from this ass hole coworker that had a crush on me.

[wordsmith]

The ONLY way I'll rent without splitting it with somebody is if it's dirt cheap, like my current situation. If I were being charged standard rent for a place that size, I'd for sure have (at least) a roommate.

[yankeeyosh]

Mark, I just did the math, and your rent is exactly 26.4% of your income. Not bad at all, ESPECIALLY for Boston!


No, you're talking pre-tax. It's about 40% of my take-home. It's definitely not killing me, but I don't see too many people in my income bracket paying that much in rent. And I think I can do better than this.

[Kitty]

No, you're talking pre-tax. It's about 40% of my take-home. It's definitely not killing me, but I don't see too many people in my income bracket paying that much in rent. And I think I can do better than this.

Wow, Mark - that is pretty crazy!! A lot of my friends in NYC are paying more than half their salary to rent. They make hardly anything...I have no idea how they do it living in that city.

[yankeeyosh]

I used to live in San Francisco and at the time I was making around 40k. My rent was $650. I found that to be hard to cover.

My rent is actually the same now (still live in the Bay Area) but I make a lot more. I STILL find it to be rather a lot.

The rent you're paying sounds like a lot for your salary.

I don't see how that is a lot. That is incredibly low for your area.

[Kitty]

Mark can you edit your post?

I don't really want this to be a thread about my finances.

ETA: I also don't think it's fair of you to make any comments and judgements without knowing all of my finances.

[MollyMe]

I spend about 12% of my salary on my rent.

[pisces2473]

A lot of my friends in NYC are paying more than half their salary to rent. They make hardly anything...I have no idea how they do it living in that city.
LOL--credit cards!

[cache]

I still can't get past the paying 750 in Frisco part. Ummm, wow. I can't find anything less than ~800, and that's for a 300sq. ft. studio.

[SmilesSoSweet]

I still can't get past the paying 750 in Frisco part. Ummm, wow. I can't find anything less than ~800, and that's for a 300sq. ft. studio.

I think Kitty has had roommates all the time so wherever she was living the rent was probably around $1500 and she SPLITS her rent with a roommate, making her rent ONLY $750.

She did say that she's ALWAYS had roommates. That's why her rent is "cheap" for San Francisco.

I was paying $750 a month in rent to live in Newport Beach. But really the overall cost of the two bedroom apartment was $1400 at the time. I had a roommate that paid the other half. A one bedroom in Newport Beach now is well over $1100/month.

[cache]

I think Kitty has had roommates all the time so wherever she was living the rent was probably around $1500 and she SPLITS her rent with a roommate, making her rent ONLY $750.

She did say that she's ALWAYS had roommates. That's why her rent is "cheap" for San Francisco.

I meant the OP

[SmilesSoSweet]

I meant the OP

I'm sure you meant the OP, but others on here were directing their comments to Kitty. So I was just clarifying that.

And I'm not sure if the OP is living by her/hiself or has roommates.

[AshleyJordan]

I also don't think it's fair of you to make any comments and judgements without knowing all of my finances.

This illustrates why, earlier, I had mentioned that one's housing burden is very relative, and it's important to factor in other commitments (i.e. retirement, debt, etc.)

[blue_monday]

thanks for the comments, i'm the OP. I pay $750 in san francisco on haight street but have 3 other roommates. roommate situation is getting kindof crazy so i'm looking to move. i've settled on paying up to $850 for rent on 30K a year because i have no school debt or credit debt, and don't have a car etc. so rent is basically my only concern outside of food, i could be saving more but i am putting a little in each month.

[vxmike]

I spend about 12% of my salary on my rent.

I pay 2.2% of my gross and 3.3% of my net on rent. My rent actually includes all utilities (water, gas, heat, electricity) so for this figure I assume that 2/3 of what I pay is "rent" and the other 1/3 is for utilities. Note that I do have a roommate.

Back when I was only making $7/hr a few years ago I was spending 26% of my net on rent. Before that I spent almost 45% of my net on mortgage/HOA/insurance for my condo.

Personally I'm just not comfortable spending a lot on housing of any kind. There's just so much else to pay for, and saving is very important to me too. My car (paid for, just gas, repairs, insurance) still costs me (~$140) almost as much as my rent per month.

[EmberMae]

Our rent is like 25% of our net combined income. It's not that bad. We have an 1100 sq foot 2 bedroom and it's a lot of space. We could do better if we were willing to live in a crappier place with less room, but I got sick of that bullshit after I graduated from college.

[wordsmith]

I dislike skimping on space. I'll compromise a lot as a renter, but I really do find that my quality of life goes down a lot if I'm cramped in a too-small, claustrophobic apartment.