When someone considers making the move to the Big Apple there are always two practical matters to consider: what to do for employment and how you'll afford living in New York City. The latter is sometimes the most pressing question. In 2017, Street Easy published a report about typical rent fees in New York City. Their findings were telling. The median annual asking rent in Manhattan came in at $3,150; in Brooklyn it was $2,500. People who rent in Queens find just a bit of relief, with the median rent clocking in at $2,175 every month.
Whether you have dreams of living in the tony Lenox Hill, carrying out a bohemian lifestyle in the East Village, or moving to a hipster neighborhood (howdy, Williamsburg, Brooklyn) you'll need to see just how much rent you can afford. Here's how you can figure it out.
Be honest about your finances
You could be making a mountain of money in New York City–and forking it right back over to your student loan holder. On the other hand, you might bring home a modest income, but you're a savvy saver and don't keep brunch and take-out habits like most other yuppie city dwellers.
Whatever your situation, take a cold, hard look at how much money you have and where it's going out, and know that you'll want to keep your tippy-top expenses as low as possible. For New York City folk, that comes down to finding the most affordable housing and transportation possible.
Set a budget
No article about figuring out how much you can afford would be useful without mentioning a budget. Like'em or hate'em, budgets are necessary. You can be as detailed as you want (such as tracking every dollar spent at the dollar store) or as liberal as you wish (such as marking down fixed monthly expenses and the rest as surplus for your preferences–hopefully saving is one of them!).
It's safe to estimate that 30% of your take-home pay will go towards your housing expense (mortgage or rent). And ok, yes, there are lots of people in this city who spend way more than 60% of their take-home every month, but that doesn't necessarily mean they're making wise decisions.
In New York City, it's common for landlords to expect that your yearly income is forty times more than your monthly rent. For example, if your potential landlord is charging $2,500 for a month's rent, a salary of $100,000 would be necessary. Yep, that sounds steep and expensive, so how can you manage that? Either find a higher-paying job (not always feasible), a cheaper apartment (which is an option), or a roommate.
Take on a roommate (or two)
People take on roommates for a number of reasons: they don't want to live alone, they are living with a significant other, they want to split some bills. The last reason proves the biggest benefit to taking on a roommate or two.
When you have a roommate and you're looking at that $2,500 apartment, guess what? You don't have to bring in that $100K salary on your own! Simply determine how much money you bring home each year and how much your roomie(s) bring home, add that up, and divide by 40. If you're making $50K and you want that aforementioned rental, your roommate would also need to earn just as much (if not more).
While you should be ready to pounce on a good deal (especially since the NYC real estate market is infamously cutthroat), you first need to be able to identify a good deal. Do your homework. A one-bedroom that's charging $1,800 in a neighborhood that's inconvenient isn't as good a deal at the $2,500 apartment that's closer to work and covers utilities (and if you have a roomie, you'll spend even less). Ask around at work and in your group of friends: what are you paying in rent? What's a good deal for living in Staten Island versus living in Brooklyn?
If you currently live in New York City, help out your potential fellow citizens and neighbors by sharing a ballpark figure of what you pay in rent and in which borough you live. (For example, if you're living in Ozone Park, Queens and you're paying $2,600 for a three-bedroom, or if you're living on Staten Island paying $1,600 for a one-bedroom).
Get a credit card
Sometimes it's a good idea to use a credit card to pay your rent (or mortgage if you're buying).
It's an expense you pay every month, so why not get some cash back for making a payment you had to pay anyway? One of the popular options is the HSBC Cash Rewards MasterCard Credit Card. You'll get 1.5% cash back on every purchase and (which you'll most likely hit if you're paying those NYC rent prices).
At the end of the day, the bad news is that yes, New York City rents are crazy high. The good news? It's manageable. Depending on your income and your lifestyle priorities, you'll be able to find a place that you afford and can enjoy calling home in any one of NYC's five boroughs.