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Renting an Apartment

post #1 of 45
Thread Starter 
After a spectacular availability increase in my city which turned it into a "renter's market", I am shopping for a new domicile. A friend suggested I aim for the 90% solution, whereby if I view an apartment that has at least 90% of the features I am looking for, I snap it up. My question is as follows; is budgeting 25% of your income for rent and utilities a reasonable yardstick? Is that 25% of your gross income, or net? I've found a super-awesome apartment but it is at the limit of my 25% budget and is a fair increase over what I am paying now, but is far nicer.
post #2 of 45
I also live in NYC, and my rent + utilities comes out to 37.5% of my net income. Bummer.
post #3 of 45
If you can stay at or under 25% after your net income, you are doing better than most I am sure, especially in a big city. In little ole ATL, a decent apt will run $1100 before utilities etc...so, cable, phone, gas, electric, water, figure another $400, which puts it at $1600. So, if you made just $4800 net a month, that would be a 1/3. Since we are going here,
Quote:
Right now I'm paying about 21% of gross income towards rent and necessary utilities (not phone or internet).
I figured mine out, never thought of it, but with phone and internet etc, mine comes to just under 20% gross...but I am in a special circumstance. But if anyone can rent and stay under 25%, I would think they are either making more than they are living on, or they need to consider buying and gaining ground for their money.
post #4 of 45
Standard rule used by lenders (in mortgage context, but applicable here too) is that housing expenses should not exceed 28% of your gross income.  Total debt (including student loans, credit card bills, etc.) should not exceed 36% of your gross income.
post #5 of 45
Thread Starter 
Reasonable for a city which isn't New York, London, or Tokyo. Right now I'm paying about 21% of gross income towards rent and necessary utilities (not phone or internet). If my rent increased to 25% would this be excessively burdensome? I think not. I don't want the rent increase to cut into my clothing budget so I am thinking of cutting out a few other luxuries; my netflix equivalent can go. Do I really need internet access? I did away with cable television 3 years ago and have never looked back.
post #6 of 45
Thread Starter 
Ambulance Chaser; thanks. Exactly what I wanted to hear. PeterMetro; gah. 37.5% of your net income? How do you eat? Wait, you are a student right?
post #7 of 45
I figured it out and I am paying 11.5% of my gross income in Atlanta. I am moving to NYC in one month and have upped my percentage to 13.5%. However, this is based on my both wife and my gross income together (we are both attorneys working at big Atlanta and soon big NYC firms).
post #8 of 45
My mortgage and co-op fee constitute approximately 30% of my gross income.  After taxes and contributions to my retirement account are factored in, the mortgage and co-op fee take up about 60% of my net income.  
post #9 of 45
Quote:
PeterMetro; gah. 37.5% of your net income? How do you eat? Wait, you are a student right?
You know net income is generally smaller than gross income, right? I pay 24.8% of my gross income (only salary - not including investments). I live alone, so I'm not splitting any of those costs. I wish it were lower, but what can you do? If I cut back on anything, it'd be my clothing budget, eating out, and gambling losses (he pulled a f*&^ng 10 on the river, unbelievable).
post #10 of 45
Quote:
I figured it out and I am paying 11.5% of my gross income in Atlanta.  I am moving to NYC in one month and have upped my percentage to 13.5%.  However, this is based on my both wife and my gross income together (we are both attorneys working at big Atlanta and soon big NYC firms).
I want to be a lawyer, damn that is sweet.
post #11 of 45
Quote:
I figured it out and I am paying 11.5% of my gross income in Atlanta.  I am moving to NYC in one month and have upped my percentage to 13.5%.  However, this is based on my both wife and my gross income together (we are both attorneys working at big Atlanta and soon big NYC firms).
Big Atlanta firms - Alston & Bird?
post #12 of 45
We curently pay just under 20% of our gross for the mortgage and utilities including phone & internet. I could afford to pay a higher percentage of my income, but I am glad I don't. This way we have more disposable income so we can enjoy life a little bit.
post #13 of 45
I am in Atlanta and my rent and all utilities are about 15% of my gross. If you know where to look you can find some nice places in Atlanta very reasonably priced.
post #14 of 45
Thread Starter 
Quote:
You know net income is generally smaller than gross income, right?
Er, right. Did I mention I, "don't got my grade 10"? It makes sense now. So I've submitted an application for the magic apartment. The landlord is a 7-foot tall viking, but seems nice. I provided my parole officer as a reference. Was this wise? I figured he could best explain the terms of the work-release program (just kidding).
post #15 of 45
Quote:
I am in Atlanta and my rent and all utilities are about 15% of my gross.  If you know where to look you can find some nice places in Atlanta very reasonably priced.
I have been here my whole life, and you must be living someplace I have never heard of if it is reasonable and nice, because a 1 bedroom 850 sq ft flat in my area is avg price about $700.
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