How Much Should I Be Spending On Rent?

Laura is getting ready to move out on her own and asks Dave how much she should be spending on rent.

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[ozstyl]

Dave, this is a extremely important conversation and question for millennials right now, many of whom are living through the most expensive housing market in history. I think this question needs to be grounded in abit more reality around what we are facing in terms of wages and market rent prices. Millennials are being CRUSHED by high rents. 1/4 of your pay on rent for anyone who lives in cities like LA, SF, Seattle, NY, Toronto, Vancouver, Sydney, Melbourne, London, Toyko is wishful thinking and fairytale land.

[scootertheuce.mychannelpe]

Dave this isn't the 70s or 80s or 90s or even the early 2000s. This the same thing I try to tell my parents and people who make triple than me at least that my take home pay is less than the cheapest 1 bedroom apartment and thats in a fairly decent area. Anything else I would have to live around illegal and criminal activity areas so Nope. My options right now is try to find a way back in the military or become a police officer if i can even cut it, or work at the post office if they ever have openings or find someone i know to help me.

[deedeelocks]

I like Dave but he is out of touch with rent and mortgages. You’ll be in the hood with 25% if your salary in most cities

[dcabral]

That advice is like telling someone, "well zero should be your rent, get a job that pays you well, watch both ways before crossing the streets, don't take therapy, just simply stop behaving in an unhealthy manner. . ."

[jacquelinm]

Spending less on rent will put you in the unsafest parts (hood) of town and not the best conditions. I read an article that you should pick somewhere that feels like home, safe and clean. From my experience, we picked our first apartment in a low income area because we wanted to spend as less as we could. The inside was poorly “renovated” but the outside was terrible and disgusting! Neighbors would smoke inside the common area and than throw cigs on the carpet. I constantly worried about a fire starting in our building. It felt unsafe because one neighbor was dealing. I always had pepper spray in my hand and ready. So yes, spend the extra $100-300 for comfort. It’ll make you want to stay home and cook more. I definitely don’t suggest luxury apartments but somewhere decent with maybe a roommate.

[Deidra.Andrews]

I love Dave, but this is very unrealistic advice. I live in Houston, Texas. $800 would be about a fourth of my total take-home pay each month. Finding a place to live for $800 that is safe for me and my children is almost impossible. Sometime I think that it’s easy to forget, when you have a significant amount of money, what it is like for people who do not have that same type of money. This would be a perfect example.

[bradywade]

Us Californians KNOW that rent under $1, 000 a month is unreasonable for decent living standards. Especially near the coast.

[UHFStation]

Cheapest rent I can find anywhere would easily be over 50% of my two incomes.

[Jeremy-xevs]

Nope, not possible anymore unless one is making more than $75k/year, living with a roommate/splitting the rent, or living in a high crime area. Maybe 5-10 years ago it was possible, but not in 2019. Rent prices get worse every single year, and they show no signs of leveling off; End of story. Her best bet is to find the cheapest place possible in the least dangerous place possible or find a roommate.

[mikemayo]

If your take home pay is 22k per year, what place can you rent for $450 per month?

[mirandataylor]

I can't get anything for under 40% in the Seattle Metro Area. I currently commute an hour and 20 minutes to my job one way and can only take it for so long.

[Tyler-lery]

This is no hate towards dave, but this doesn't really work anymore.
He grew up in a different generation, so I understand completely why he wouldn't know the answer.

In canada, our minimum wage is between $22k-33k a year, so roughly $500-600 a month, which in Ontario, the average place to rent is at least $1k.

Honestly, my suggestion is to make sure you have a partner or someone you trust living with you to lower that payment for yourself.

Living at home longer in this time is nothing to be ashamed of.

[AWOLschmidt]

Average rent for a one bedroom apartment in the United States $1000 a month

Full time minimum wage income BEFORE taxes come out
$1160 a month

[AH-bmts]

It's not just the rent but factor in cost of utilities I.e. gas vs electric heat, and you also have to look at the zip code to factor in cost of car insurance and possible local wage tax combined with commuting expenses to get the whole picture. (I.e. Philadelphia has a high local wage tax with different rates for residents and nonresidents)

[lesliemichelle]

I live in Colorado Springs. 25% of my monthly take-home is about $775... You can't find a safe place to live for that amount of money, unless it's in someone's basement. Forget about owning.

[ryanfrizzell]

“You simply don’t want to be poor because of your rent payment.” Exactly.

[markg]

The cheapest place that's in a safe area. End of story.

[danielle]

I spend about a third of my take home pay on rent. However I don’t have a car payment or any other high bills to worry about.

[poker_rs]

That’s unrealistic in todays era. Wages are stagnant & rent goes up 5-10%+ every 12 months.

[Noutchka]

In Paris, you get a 24 m2 flat for a rent of 780 euros a month. So you need to earn at least 3120 euros to afford that. Needless to say the 25%rule, which I completely understand, is very hard to achieve in certain parts of the world.