Have you ever wondered how people can live in an expensive city on less than six figures? I wondered this all the time as someone who has lived in New York City and San Francisco for over 23 years.
I first started my career in New York City as a financial analyst from 1999-2001 at GS. My base salary was only $40,000 and I could only afford to share a studio with a friend! It was an amazing time, but boy was it hard to save money.
Thankfully our salaries were raised in the second year to $65,000 after Wall St. decided to pay new first year analysts $55,000 instead of $40,000. Still, a base salary of $65,000 wasn’t much to write home about when one-bedroom condos were selling for 5X.
In 2001, I moved to San Francisco for a raise and a promotion. Back then, San Francisco felt dirt cheap compared to Manhattan. I could either get 30% more space for the same money or buy the same place for 25% less. Therefore, in 2003, I decided to go long San Francisco real estate.
The key to living in an expensive city is to get your housing costs under control. Once you have your housing costs below 20% of your gross income, you should start to thrive.
New York City Is Fantastic, But Is An Expensive City
New York would be the greatest city in North America if it weren’t for three things: 1) Tough weather for half the year, 2) Never ending crowds, and 3) outrageous prices!
A decade later, I went to New York City to visit my buddy I shared a studio with for two years. He had been looking to upgrade to a two bedroom condo with his future wife. But he was taken aback by the then ~$1.5 million price tag. He said they just might move out of the city instead.
Back in 2001, my friend had bought a one-bedroom condo near the U.N. for only $325,000. The value of his condo is now over $750,000. If a condo owner who saw his property’s value grow by 130% can’t even afford to comfortably upgrade to a two bedroom, can you imagine what a renter during this same time period is thinking?
So it really got me thinking. How do people live a comfortable life in an expensive city like New York without making six-figures a year? Let’s find out.
Breaking Down How Little $100,000 Goes In An Expensive City
First of all, making $100,000 a year puts you in roughly the top 10-15% of nationwide income earners. $100,000 is a great achievement no matter where you live, but it’s not that great if you live in an international city such as New York, San Francisco, Hong Kong, London, Tokyo, or Paris.
It’s really important for those who make much less to recognize high salaries are generally earned in expensive locations.
Let’s break down what a typical $100,000 earner will get after funding their retirement savings and taxes. There is no excuse for anybody making $100,000 or more to not max out their 401(k) for a more financially sound retirement. Here is my 401(k) post by age for your reference.
$100,000 Income Budget In An Expensive City
Gross Income: $100,000
401(k) Contribution ($19,500 max for 2021): $17,500
Taxable Income: $82,500
Effective Tax Rate (includes city, state, federal, SS tax, health insurance): 30%
Net Income: $57,750
Monthly Net Income: $4,812
Expenses From A Frugal Friend Making $100K In An Expensive City
Rent: For One Bedroom On 71st and 2nd Avenue: $3,300. Rent has actually surged in New York City post the pandemic.
Food: $700. He eats out about 30 meals a month and cooks his remaining 60 meals at home (breakfast, lunch, dinner). Groceries are not cheap in Manhattan.
Beverages: $100. He only goes out for drinks with his friends once a week. Beers are $5-$15 and cocktails are $8-$15.
Cabs: $100. From the Upper East Side to Grand Central costs about $15 one way. It’s $20 to go all the way downtown. He tries not to take cabs, but it’s an inevitability.
Subway: $112. It’s $5 to commute round-trip. Back in 1998 one-way fairs were only $1. $112 is now the monthly all you can commute pass cost.
Cable / Internet: $100. Pretty standard package for basic cable and internet.
Entertainment: $200. This category includes movies, shows, and events. Movie tickets cost $15 and Broadway shows cost $50-$100 for the cheaper tickets.
Mobile phone: $50. Family plan i.e. subsidized.
Travel: $150. Cost to go see his family in New Jersey and the occasional fishing or skiing trip up north.
LEFT OVER INCOME: $0!
Not Living It Up On $100K A Year In Income In An Expensive City
As you can see from my example above, someone making $100,000 a year in New York City is NOT living it up. Going out once a week with friends is hardly excessive in a city that seriously never sleeps. He does his best to walk or utilize the subway and his entertainment budgets is pretty tiny for all the NYC has to offer.
At least he is contributing a good amount to his 401(k), which is crucial since he has nothing left in disposable income. Contributing to his 401(k) should result in over $200,000 in 10 years due to company match and conservative performance estimates. If he wasn’t contributing heavily to his 401(k), he’d have an extra $1,200 a month to spend.
Finding a decent one bedroom for under $3,000 is not particularly easy unless you know someone who has a rent controlled apartment. If you want to lead a less comfortable life, then you can find studios for around $2,000 a month.
But, are you really going to be happy still living like a college student making $100,000 a year? Probably not since you’re closer to 30 than 20. Where are your parents, girlfriend, boyfriend, and relatives going to sleep? One solution is to find a significant other who is willing to split your $3,300 a month one bedroom cost.
Going Out To Eat Costs A Fortune Too
Lunches in NYC cost on average $10-15 after tax and tip. You could eat a Shackburger at Shake Shack and drink free water every lunch for $5.01 like I did for two days, but you might die of heart failure at a young age. You might also turn so big that your armpits emanate massive odor and heat on the passenger next to you like I felt sitting in the middle sit on a red-eye flight over!
There’s a saying by New Yorkers to expect to burn $100 each evening you go out. After going out every evening I can see how this saying is true.
My dinner at Strip House cost $77 followed by $35 of drinks at Sparks Steakhouse where a family friend works. Then of course I had to pay another $15 cab ride back home because it was 1am. At least my buddy and I split the bill.
Of course we could have gone to a cheaper place to eat like Kunjip in Korea Town for a more reasonable $25 a person. We could have drank our alcohol at home and ordered water at the bar instead. But come on. It’s good to live it up once in a while.
The Ideal Income To Live In An Expensive City
I believe $200,000 a year per person is the ideal income for maximum happiness. To put things into perspective, a 30-year-old second year Associate makes anywhere from $170,000-$250,000 on average in finance as do second year lawyers. 32 year old doctors who don’t do fellowships make $150,000-$250,000 as well.
If two, $200,000 income-earning people can combine forces, then even better. Nowadays, a family earning $300,000 a year in an expensive city is considered middle class.
What’s also interesting is that two people making a combined $400,000 annual income is right at the limit for where President Biden wants to raise taxes.
$200,000 Income Breakdown
Gross Income: $200,000
401(k) Contribution: $17,500
Taxable Income: $182,500
Effective Tax Rate (includes city, state, federal, SS tax): 35%
Net Income: $118,625
Monthly Net Income: $9,885
$200,000 Budget Breakdown
Rent For Two Bedroom In Mid Town: $5,500
Food: $1,000. Now we can afford to eat four $100 dinners a month with $500 left over for lunch and breakfast.
Beverages: $500. You can go out twice a week now or feel more comfortable buying a couple rounds of drinks for three friends four times a month.
Cabs: $200. Instead of taking the subway when it’s super hot or really late, you get to take a $15 cab ride a little more often for convenience.
Subway ($2.5 one way): $114. Same old monthly commuter plan.
Cable / Internet: $100. Same old package.
Entertainment: $500. A little more breathing room here because now you can afford to take out a date!
Mobile phone: $100. Upgrade to a larger data package because you’re on the move more often.
Travel: $300. A couple more trips out of the city. This time, to the Hamptons.
Total Expenses: $8,300
LEFT OVER INCOME: $1,535
$200,000 A Year Is Good, But Not Great Income
We can argue the ideal income to live in an expensive city all day long. But as you can see from the example above, $200,000 will allow you to contribute to your 401(k), save $20,000 (10%) in after tax income and spend freely on much of what NYC has to offer.
Anything more than $200,000 is nice, but higher tax rates are really going to eat into your earnings. It also usually takes more effort to earn in the $250,000+ range so that’s a negative.
Here’s another example of a single mother with a child. It’s clear she’s not living it up on a $200,000 income. Thanks to taxes and childcare expenses, her six-figure income gets gobbled up quickly.
Examples Of Everyday Expensive Things You Can Buy In NYC
Let me now share some pictures of things you may want to buy in NYC that costs a lot of money.
Share How You Live Comfortably In An Expensive City On Less!
Given only ~15% of Americans make more than $100,000 a year, it’s clearly possible to have a good life living in an expensive city making less. This goes for folks living in other expensive international cities as well. Some of the things I’ve thought of that allow people to live and save are:
- Co-habitating with a girlfriend, boyfriend, spouse, or roommate.
- Living in a rent controlled apartment.
- Working two or more jobs.
- Residing farther away from downtown
- Living off the generosity of one’s parents.
- Having a wealthy spouse.
- Working in the food industry so you don’t have to pay for your meals.
- Working as a property manager or hospitality industry to save on rent costs.
- Living for free in your parent’s apartment.
- Living off a trust fund.
Housing Is The Biggest Issue
If you can take care of your housing situation everything else can be overcome with cheaper options. For example, you can eat McDonald’s for dinner rather than go to Le Bernardin. Entertainment-wise, you can play frisbee in the park instead of paying $100 for a Broadway show.
I do wonder how parents afford to send their kids to private schools given public school systems in big cities are often in need of improvement. There’s the Citywide Gifted & Talented programs and Anderson, Hunter, Lowerlab, and Nest are all great elementary public schools.
Then there’s Stuyvesant and Bronx Science for public high schools. I’m not sure what parents do if their kids aren’t smart, but I’m sure there are scholarships for everyone.
If you live in an expensive city and make less than $100,000 a year, I’d love to hear how you manage to live a comfortable life! Please also mention your savings rate as well. I guess it all depends on what your definition of “comfortable” is and your age.
Related: Scraping By On $500,000 A Year: Why It’s So Hard For High Income Earners To escape The Rat Race
Expensive Big Cities Outlook Post-Pandemic
Post-pandemic, I believe thousands of people will be flocking back to big cities again for the job opportunities, network effects, and more. Therefore, I’m looking to buy Manhattan property to catch the wave.
Rents and rental property prices will rebound, just like everything else has so far. If you’ve been sitting on the sidelines for a while, I believe now is the time to invest before the herd comes back.
All my financially savvy friends are scooping up rental properties in San Francisco and New York City right now. If you are renter, your goal should be to lock in as long of a lease as possible at current rates.
The reality is, people can afford to live in expensive cities due to high incomes. If incomes weren’t high enough expensive cities wouldn’t be as expensive.
New York City residents require a net worth of about $3.4 million to feel wealthy in 2022. I think $3.4 million is a reasonable amount given how expensive New York City is. However, NYC has more affordable housing so long as you don’t live in Manhattan.
Achieve Financial Freedom Through Real Estate
Real estate is my favorite way to achieving financial freedom. It is a tangible asset that is less volatile, provides utility, and generates income. By the time I was 30, I had bought two properties in San Francisco and one property in Lake Tahoe. These properties now generate a significant amount of mostly passive income.
In 2016, I started diversifying into heartland real estate to take advantage of lower valuations and higher cap rates. I did so by investing $810,000 with real estate crowdfunding platforms. Now I earn more passive income to take care of my family.
Take a look at my two favorite real estate crowdfunding platforms. They are free to sign up and explore.
Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing. For most people, investing in a diversified eREIT is the easiest way to gain exposure.
CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends. If you have a lot more capital, you can build you own diversified real estate portfolio.
Manage Your Finances In One Place
If you currently live in an expensive city or plan to move to an expensive city, I recommend signing up with Personal Capital, a free online wealth management tool to keep track of your income and expenses.
Money drains out like water if you don’t keep a tight lid on your cash. I live in San Francisco and Personal Capital keeps my budget in check by providing me clear snapshots of my finances. They even send me a weekly overview of my net worth progress over email which I highly appreciate.
My favorite feature is Personal Capital’s Investment Analyzer tools that assess your portfolio’s risk and fees. I discovered I was paying $1,700+ in annual 401(k) fees I had no idea I was paying!
How Do People Live On Less Than Six Figures In An Expensive City is a Financial Samurai original post. Due to inflation, the cost of living in big cities keeps going up. Hence, we need to earn more, save more, and get our housing under control. I’ve been writing about achieving financial freedom since 2009.
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Is there a way to search for career paths that are easy transitions from other careers and that pay “x” amount?
I live in Ventura County, California, and according to the census, only 36.8% of my neighbors have college degrees, but they all seem to do better than me—owning houses and multiple luxury cars. How can they afford rent? How can I get a job like theirs?
I am 43, have an MA, and work two part time jobs. I rent a tiny bedroom for 63% of my net income ($48k,) and can’t afford health insurance/ a dentist, or my student loans.
There has to be a way to find careers that pay enough. How do I find out what jobs my neighbors have that pay enough to not just rent a bedroom—but actually rent or buy a whole house?
I love how this blog pretends Queens doesn’t exist or unfashionable neighborhoods in any borough for that matter. Speaking as a New Yorker, 3,300 for a 1 bed is actually quite a lot. You can find many many 1 bedrooms (or more!) for 2500 right next to a train line that takes you straight to work. But god forbid you tell someone you live in Woodside or Sunnyside.
Actually, I love Queens. Best value in NYC! I’d be buying in Queens. And I always go through Queens to watch the U.S. Open.
Related: The Time To Buy Big City Real Estate Is Now
Queens is boring. It doesn’t have the amenities that (upper-)middle class young professionals desire nor does it have singles night life. Astoria is cool though.
True. But it’s such good value and it’s an improving neighborhood.
My spouse and I live in Chicago. By no means does Chicago compare to New York in regards to the cost of living, however, it’s still a relatively expensive city by American standards. Much like any major city, you will pay a premium for location, and Chicago has many neighborhoods worthy of the “it” location. In some of Chicago’s more premium neighborhoods, you can expect to pay anywhere from 2500-5000+ per month for 1-2-3 bed apartments. Studios can be had around 1800 however. Expect these to be on the smaller size. On the other hand, 1-2 bed apartments can be had for 1600–2500 in less popular, or emerging areas ranging from 500-1400 square feet. Go west or south and you can find apartments in the 800-1200 range. Keep in mind, each person will have a level of comfort they may or may not be willing to compromise on. Things like safety, schools, access to entertainment all will play a major role. One of the advantages of Chicago however is its lower cost of living, yet higher pay when compared to other major metropolitan areas.
My spouse and I work in marketing, and pull in a little over 200k combined. We’re pretty financially savvy and live well below our means. We save in a 401k and receive employee stock options from work for a total combined savings rate of 18% pre-tax. We have 2 children and also save for their college in a 529 plan. Because of the children we’ve chosen to live in one of the more offbeat neighborhoods, where we are able to have a 1400sq foot townhouse and 3 beds including a small yard for about 2600 per month (mortgage), We’re only 2 miles from some of the more lively areas, so nightlife, retail, and the arts is really only a short cab or train ride away. A nice compromise for more space while living in the 3rd largest city in the US.
A typical monthly budget with 10k net income for us:
Housing: 2600
Utilities including cable phone etc:500
Car payment:500
Child care/part time:800
Groceries:600
Eating out/entertainment:350
Miscellaneous/clothes:200
Sports and family Rec:200
Gas and transportation:175
Subscription services:45
Memberships/museums:30
529 college savings:500
Credit cards:500
Savings/investments:3000
School: Free (public)
Could we afford to live in a more lively part of the city, and pay more for housing, even send our children to private schools? Of course. But we’ve chosen to be more frugal, saving for our financial futures, and emergencies. The housing crash of 08 and now with COVID has made us more financially conservative. Knowing that we have the ability to weather a job loss, or travel to see the world means so much more than living next to the Joneses.
Thanks for sharing so much! Chicago is truly one of the best value cities in America where you can also make good money. I’m assuming the winter is what makes it cheaper than more temperate places.
Financial Samurai,
There are a few things I believe contributing to the lower cost of housing. What you have to remember about Chicago, compared to say New York, or even San Francisco is that although it’s population ranks it 3rd in the nation, its density at roughly 12,000 people per square miles is a little less than half the density of NYC at 28,000 and 18,000 for San Francisco respectively. Due to this disparity in density, you don’t have as many people per square mile fighting for square footage. Also, Chicago for the longest time was predominantly, and still is in some areas a blue collar working class city. It wasn’t until recently, say in the last 20-25 years that we started to see a shift towards tech jobs and startups. This has led to a higher demand in denser housing closer in to the city center where the likes of Google, Salesforce, and 37 other Fortune 500 companies have set up shop. We probably can expect prices to continue to rise as time goes on.
Another reason to consider why housing may be cheaper is the tax base in Chicago. Most homes and businesses are taxed at a really high rate. Businesses especially downtown businesses make up the largest portion of tax base for the city which helps to offset the cost of homes for individuals. However, people are not exempt either. Most homes are taxed annually at 2% value so a $250,000 home comes with a tax bill of $5,000 per year, add in the sales tax of 10.25% and employment tax of 5% these things all add to the overall cost of living that may be considered when negotiating rent or sales prices of a home.
Gotcha. Thanks for your thoughts. The taxes really is a killer.
Related: Property Tax Rates By State
This is extreme. When I first graduated from college in 1998, I lived in Manhattan and was only making $47K/year. I then lived in Boston, DC, and now Los Angeles. These cities are almost as expensive as NY. I can tell you that in any of these cities – even NY – it would be VERY easy for a single person to live on less than $200K. I would say that $120K would be the lowest and still livable and would allow to save for retirement. You can still go to nice restaurants and have a decent apartment or a condo outside the city for that salary. I’m always amazed by people’s warped perceptions of $$. Unless you need a private masseur and gold plated toiled seats, these numbers you presented are way out of whack
I moved to the UES January 2019 with a job offer of $122k/yr. got a one bedroom for $2700/mo. Monthly MTA caard with unlimited rides for $127/mo which was taken out pretax at work, $60 for cell phone, $60 internet, and around $60 for electric. Everything else included in rent. I went out every now and then. Maybe 3-4x a week and if you’re ona date it’s guaranteed to be over $100 a night. Rarely take cabs but on rare occasions I do. Biggest killer? I smoke and it’s $14-16/pack here. Anyway, I maxed out my 401k easily and even saved around $1,000 a month. Museums, broadway, etc I would do very occasionally. Baseball games, plenty, but wouldn’t buy anything but cheaper seats. Not the cheapest but around $30 a seat.
As you can see I did fine but there’s a lot more to it. It was pretty rare I went to an actual restaurant b/c it’s so expensive. When I say I eat out most of my meals I mean deli’s, grab a slicer or a bagel or causal fast food places. Typically, under $10 for breakfast and $10-15 for lunch and dinner. Usually I only eat twice a day but not always. Grocery stores? There’s really no such thing in the city. There are a few Whole Foods and Trader Joe’s but not close enough to me and not really any cheaper than “eating out” like I do. Plus, schlepping groceries on a subway or bus? Been there, done that, never again. Local grocery store? I suppose that’s what New Yorkers call them. Like D’Ag, Gristedes, etc but they are very, very small and you likely won’t find everything you need without having to go a different store. Again, not worth the hassle and not really any cheaper.
I would agree with $200k as a nice lifestyle. My apartment has an outdoor space but it feels like a small jail cell. There is no natural light. It’s noisy because the building is old and to to get out of the city takes forever. True, the subway system is great but just to get to Brooklyn takes me over 45 minutes. To get to the UWS takes almost a half hour and that’s 2 miles away. FiDi over a half hour. Everything here is a giant pain in the ass. $200 k would allow a car which would make a big difference. It would also allow you to take some time away from the city even if it’s just upstate or visiting family back home. You don’t just run somewhere real quick here. Unless it’s in your neighborhood it’s going to be at least an afternoon affair.
It’s definitely true there are things you can do to make it cheaper. There is a lot of cheap and fun entertainment. Some of it is even free. But it still comes at a price. Central Park is great and free but it’s not a getaway. There will never be a time when you are alone with nature unless you’re there at night which is not a good idea.
$200k gets you a legitimate apartment where you aren’t living like a person on welfare, a vehicle (even with $600/mo parking spot parked probably miles away), the ability to save and invest a difference-making amount of money and very little worry about being able to have fun unless you’re an idiot.
With the coronavirus, I am working from home outside of Manhattan and no longer have any desire or need to go to Manhattan. I was in lower Manhattan last month and it was all boarded up and full of homeless people. Everything is closed and people have moved out. No restaurants, movies, museums, clubs; nothing to offer. Why pay $2700 for a studio now? Many people have been laid off from their jobs in Manhattan. Better off going home to live with family or a friend and bank the extra cash.
I’ve tried but can’t get out of my lease but leasing company won’t even work with me and won’t allo subletting. On top of that I have been out of work since April. Fortunately, I was good with money over the years and am okay for awhile. But there is literally nothing to do here now. They have outdoor dining now but that’s it and I’m certainly not paying that much for lunch or dinner.
I would really discourage anyone from moving here if you didn’t have a well paying job lined offered and accepted. Violent crime is up, somewhere the homeless situation has gotten worse as it was already a dismal situation before all this happened. True the restrictions won’t last forever and rents are coming down but the quality of life is so low unless you make near $200k that it’s not worth it. Not even close.
If I find a job before my lease is up I’ll stay but it’s extremely unlikely I’ll find one paying even close to what I was being paid before. And to be honest, I’m not sure I’d ever come back here even to visit.
My stats are very similar to yours but residing on the Waterfront in Jersey City (i.e., “the 6th Borough”).
Annual salary: $120,000
401k contributions: $1,500/mo ($18k annual)
Monthly Net income after 401k contributions: ~$5,600
Rent: $2,700
Grocery: $600/mo
Utilities: $150/mo
Internet: $55/mo
Phone: $65/mo
What I have found is paying this much in rent affords me a high quality of life, given my interests and proclivities.
My apartment is a newly renovated, modern 1-bedroom with central A/C, in-unit washer-dryer, dishwasher, and in-building amenities like fitness center and patio. At this point in my life, I will not settle for anything less. I am not walking to a laundromat or living without a dishwasher or without an in-building fitness center (though COVID has closed them). Gone are the days of having a roommate or living in “quirky” or “charming” old buildings, or with cockroaches. The premium is worth it for a peace of mind.
Also my unit is in a safe, quiet area in walking distance of grocery stores, NJ light rail, a CVS, a few fitness centers, and a running path on the waterfront.
However, all these amenities comes at an extreme cost. Recently I took stock of my expenses and realized I saved very little to other major life goals like saving for a car, a home down payment, and a work sabbatical. Every month I feel so pinched for money, even with meticulous budgeting and cost cutting. I am also debt free. Then I realized, I pay 50% of my net income on rent! Before moving to NYC, I easily maintained rent under the 30% threshold, but now I spend 50% to maintain the same quality of life.
Also, my grocery expenses doubled. In my Midwestern City, I spent $250-300/mo on groceries; now it’s $500 – 600.
Since COVID, I’ve been struggling to justify this cost. Why pay this much money to live near a city I don’t even visit? Why live in Jersey either? Jersey is ridiculously expensive without offering much in return. (Jersey Cons: The Jersey bus system is antiquated, the State has few noteworthy attractions outside of the Jersey Shore, the residential homes are ugly shacks unless you go further out to Montclair or Princeton … NYC: The MTA feels like the last place I’d want to be right now.)
I also feel like it’s a struggle to access any restorative green space or nature here like wooded biking trails, swimming, water sports, scenic hiking, gardens, etc. Some outdoor recreation; that’s all I’m longing for after being cooped in my apartment 24/7. Central Park and Liberty State Park are lovely but it’s not quite the same feel, especially given all the crowding. Plus it always seems to take 45 – 60 minutes to get to Central Parrk – even when I’m only 2-3 miles away.
What I want now is a car so I can easily escape this concrete jungle, but realistically I can’t afford it. My building charges $225/mo for assigned parking spaces, there’s no on-street parking, and car ownership averages $400/mo.
What I believe is that NYC is “Worth it” if you (1) have family here, (2) are trying to break into a hot industry like finance, the performing arts, or fine art, (3) *really* love fine dining, live entertainment, and art, or (4) long to live among and connect with a specific sub-culture/sub-community (e.g., LGBTQ+ community, Jewish community, etc.) that you couldn’t easily find elsewhere. For me, I don’t quite fall into any of those buckets so I’m just questioning why live here?
Agree 110% with the last paragraph, which is why we are leaving Brooklyn for Charlotte, NC. It offers similar tastes in some of those things we cherish (i.e. the art scene in NoDa).
I also used to live in JC Heights for 3 years when I first moved to the area so that I could focus on being debt free and saving. This was from 2012-2015 and I was sharing a large townhouse with 3 people paying $850/month with an income between $70-90k.
I’ve been fortunate enough to have extremely successful years in sales the last three years so my income is more than triple it was back in 2015 which allowed me to save for a down payment on a beautiful home.
I think I am part of a large migration pattern from large metropolises to smaller/medium-sized cities. COVID, family and preference are the main reasons for this migration pattern. It will certainly lower the cost of living in big cities and bring back more creative minded folks but I think it will also be less safe. IMHO we saw the best era of NYC Ever and it’s sadly over.
In the $100k scenario I doubt a landlord would have rented to that person. Salary doesn’t even meet the 100k / 40 threshold minimum for the $3300 monthly rent. Also savings in pre-tax transportation to take advantage of.
Came across this while researching for my book on the NYC housing market. Had to chuckle at the living in a 1 BR in Manhattan paying market rent. Only people dying to live in Manhattan, usually from out of town, would pay that. If you have the money, there is plenty of cheap housing if you are willing to be resourceful and navigate the system.
Perhaps market rent is not market rent then? Because the very definition of market rent is what the people pay.
I work in midtown, live in the suburbs, and am currently looking at NYC apartments. While $3200 is fairly market rent, that much for a 1-bedroom is going to mean living in a prime Manhattan location, possibly renovated. Probably in a walkup with no doorman, but still there’s a real element of choice in renting a 1-bedroom at that price.
I agree with Cash Chronicles that there are nice, viable alternatives for much less than that (say, $2700) if one doesn’t just let a broker tell you what your options are. I definitely believe that a lot of foreigners, new-to-the-city young professionals, etc. help create artificially inflated rent prices because they don’t necessarily take it upon themselves to see all that is out there.
I agree with you our newbies and foreigners jacking up rent and not knowing better. It’s the same thing in San Francisco. There are so many great deals in the city, but all people read about are the headlines of expensive rents.
I live in the Alexandria, Virginia (Suburb of Washington, DC) I am a single female with no kids and I live in an almost 600 square foot studio apartment in a safe area. I pay $1,135 but my rent is going up to $1,175 soon.
Right now my commute to work is bad (2 hours) and the further out you go on our subway system the more you pay. I buy a subway train pass for shorter trips which is $38 a week. I also need to ride the bus during my commute and that is $15 a week for a pass. I am trying to get a position closer to home so I can just pay for a bus pass. My groceries are not too expensive. I shop in Aldi, Trader Joe’s and other supermarkets where I get items mostly on sale…
I want to purchase something and there are things that I don’t like about living in this area so I plan to move to the Southwest where rents are lower, pursue my masters degree and buy a condo with low assessment fees or a single family home. I hope to be married and that will help my income but until then I don’t want to stay in this area too much longer.
Be careful about buying a condo with an HOA, they can go up yearly like rent and fighting an HOA in court is an exercise in futility.