Tempted by a luxury building, 3k rent on 100k salary. Should I bite?

Is your comp 100k all in? Or 100k base?

Surely you can find nice options (assuming not NYC, SF) for $1,000 less a month?

You won't get a 3K place, not trying to be mean but the landlord is highly unlikely to approve you.  In NYC the general rule is 40x rent.   3k would be 120K.

Don’t be an idiot. I’d be hesitant to pay that much even if I had $100k base + $100k bonus

After healthcare, dental, 401k, utilities, etc. rent at this place will likely be more like 60-70% of your base income.

Do it. YOLO. 

its too much. get a roommate and get something nicer for 4500 / 2bed

I was paying $2500 on a 90k base. Tbh it was a bit of a stretch, didnt save a ton of money after factoring in food costs. Is it possible to find a 2br in that same building and have a roommate? I bet that would likely bring it down to ~$2700 a person, which is still a ton. Corp banking bonuses arent anything to write home about, especially after taxes. 

If I were you I'd keep looking hard for a studio in an elevator building. Street Easy is the place everyone looks, but checking out the actual Agent's website (i.e., Compass) you might find things before they hit Street Easy. There's a large 2022 FT Roommate thread on WSO, lots of people moving in around the same time as you

Dude just go for it if its that important to you. Saving an extra $500 per month will be meaningless in the grand scheme of your life.

will say do this especially when young and it will sting when people with similar incomes, and even Dave Ramseycels earning half your income, have a much higher net worth than you

My philosophy on rent vs buy is to rent but only if you can save additional money to invest

I’m generally not one to talk down on someone for wanting to buy nice things like cars, houses, watches etc, but in this case I’m not sure it’s a smart thing to do. After tax your rent would almost be 40-50% of your income. On top of that you don’t have any equity in the place since it’s just renting. A depreciating car would give you more equity when you decide to get rid of it than a rental apartment. Id suggest to just downsize to something more affordable or actually buy an apartment if you’re going to live there long term. Id probably just wait until you make more income to move up to 3k rent. Many people think 100k is going to get them their dream life, but once you have it you realize that those nicer apartments in nyc need more like a 400-500k income to afford easily. 

See if you can get a roommate and flex the 1 bedroom.  That's what i did in my earlier years to be able to live in a nicer place than on my own.  Otherwise I don't think it's worth it to pay that much of your after-tax take-home on rent.

Build a budget and decide how you want to allocate your earnings. I wouldn’t be comfortable allocating that high % to rent and I definitely spend more on real estate than anything else. It is probably do-able, but you’re sacrificing the ability to spend a lot of money on food/drinks/experiences and savings. That said, if you work from home all week and spend most of your free time at home, it may not be the worst idea … but if that is the case, you probably shouldn’t be living in such a high cost of living area.

For what it is worth, I bought a condo in a luxury high rise with crazy amenities in the heart of Boston. I loved it. Definitely the best living I’ve experienced and something to work towards.

Get a 2 or 3 bedroom with roommates

One of the worst things you can be in life is house poor. When the luxury wears off, you’re left with the feeling of watching $3k a month ripped out of your account and thinking about all the extra savings you could’ve had for experiences and other bills.

Don’t get me wrong, living in a shithole isn’t worth it either, but are the $2k apts really that bad in comparison?

I have friends spending 2.3-2.5k on a 90k salary and they feel like they're stretched real thin every month. 100k salary would equate to about 6k more a year would be the same as getting a 3k place on 100k. If you spend frugally or don't really care to save go for it. People have different philosophies on how they want to live their life. Being a young professional making good money can tempt you to want to spend most of it and enjoy the money you make. If that's your mindset go for it. However I'm someone who decided to stay remote for the time being to live at home and save that rent money in my pocket. All about how you want to live.

If you're in corp banking, why not move over the Hudson to JC? Id assume prices there for a similar apartment would be quite a bit lower compared to LIC.

Probably Jackson Park....

I've looked at living in LIC, and have friends who also moved to an awesome penthouse apartment there. Almost pulled the trigger, but we decided at the last minute to not do it (in The Forge, which is just an absolutely amazing building).

Pros:

1) Most of the newer luxury buildings are going to be rent stabilized due to tax abatements. You'll be able to budget out incoming costs (would ask the mgmt if the apartment is stabilized under a 421-A or something similar)

2) Generally will get more bang for your buck in terms of space and condition

3) Nice amenities that can offset other expenses (gym, peleton, for example), great new building. Staff to help you and secure packages

Cons

1) There is still barely any infrastructure in LIC - a lot of under construction apartment buildings, but not a lot of grocers etc. Most people I spoke to had groceries delivered by Amazon, for example. Remember at this point it is up and coming. If you could buy there that would be a different story for potential upside.

2) Its a pain in the ass to get to, same thing goes for your friends and family wanting to visit (depending where they are of course). Commutes also aren't that great depending where you are in the city

3) Neighborhood can still be a bit dicey in areas if you're not too careful. Not a lot of good restaurants to go to, so the weekends will incur extra trips

4) It's technically Long Island...gross (kidding, sort of)

At the end of the day you should choose what's important to you. I don't think being in a nice apartment is a waste of money. I also think if it doesn't meet your budget/feel like your overextending or makes you second guess yourself, you should pass. You know your expenses better than anyone else, plus need to make sure you have an emergency fund. If you have someone that you can split an apartment with, even better.

These days its tough to find any deals like previously during COVID. And to be clear, too, I forced myself and then girlfriend to stay in a rent stabilized apartment in a walk-up, with probably one of the worst property managers I've seen and obnoxious tenants, to save money for 3-4 years. We decided to pass on the LIC for the reasons above. We then took advantage of a COVID deal last April in a luxury building in the UES. We also have dual income, which helps helps. But even so, the same layout apartments here on lower levels went for $500 above the base price. I'm nervous for that, but from a quality of life standpoint, its been amazing and worth the cost increase. The manager has a pretty large portfolio, so if you'd be interested in knowing who they are, PM me. 

I won't comment outright on your decision to do this or not because I tend to live frugally and what's for me may not be for the next guy. 

But I will say this, are you positive about your take-home calculations? From what I know of NY/NYC taxes, I think you may be overestimating the amount that will actually hit your bank account. At a 3k housing nut, you need to be 100% certain of that calculation. 

I'm in a somewhat similar boat to you. I make 150K base, and decided to spend 3.5k a month on an apt. I also have a couple hundred in student loan payments each month. Here are a few thoughts: 

You'll live paycheck to paycheck. Hard to say this any other way. But you'll basically be spending entirely 1/2 of your monthly take home on rent. Utilities in NYC are weirdly expensive so expect 100-250 to eat into your second paycheck each month as well. . You'll likely put money away into your 401k too. This will leave you with anywhere from 1.5k-2.5k a month to spend "freely". Which at first seems great! But the expenses add up. You'll need to furnish that nice new apt so you'll burn a paycheck or 2 on furntiture / or moving. Going out is pricey - so expect drinks to add up to a couple 100 each month. Then dinners will also add costs. If you go on vacations with friends/gf/family then that will add up. You said you've never had a nice life before banking so I'm guessing your family isn't particularly well off? If your parents call you to say the water heater broke and it'll cost 3k to fix, are you not going to help out? These random expenses, big and small, will accrue and you'll keep seeing a bank account in sub 1000 range and potentially some credit card debt (have heard this narrative from others as well). 

Personally, this is all fine since my bonus is in the 150k to 175k range so I'll be flush when summer hits. However if I wasn't getting that bonus, there's no way I would live in a place this expensive. You're simply stretching the limit of your budget and have no cash to deal with emergencies. That being said - I do love my apartment and it makes coming home much more enoyable.

I would look into living in FIDI, UWS, UES, or East village. These spots are all decently close to your work (assuming mid-town) and you can get a solid place at the 2.5k range.

It is a stretch but doable. Depends on a lot of other factors.

Do you have any side income? Other meaningful expenses like medical bills? Always want to prepare for the downside case. If you have a lot of savings and can afford to take a hit in a worst-case scenario, go for it. If not, then maybe hold off.

What's your career path ahead of you look like? Do you anticipate a steep path to higher earnings in the future? If you anticipate moving into a nicer place like this in a year or two anyways, maybe it makes sense to reach a bit now and cut down on moving costs later. If you think you'll move in a year or two anyways, well then maybe don't splurge.  

At the end of the day, NY is expensive. If you want a decent apt without a roommate in a nice neighborhood, you're going to spend at least $2-2.5K anyways, so just ask yourself if the upgrade is worth whatever you would spent the extra $6-12K per year on. If the answer's yes, go for it.

Only if it comes with good company

There's no point in spending for a nicer anything until you have a partner to split it with, for 3 reasons:

1) You are at a point in your life where you should be working/networking so much that your place of residence is really just a crash pad when you are not going out.

2) You don't want to be with anyone who values you for material possessions. Anyone you are trying to impress should respect you enough as a man without it. Your career and education speak more to your character than your housing.

3) It's a waste of money. Delay gratification for two years, live as cheaply as possible, save as much money as possible, and buy a place. You will be so much happier and financially well off by saving to buy, rather than just throwing money down the drain.

…Feel free to use these reasons the next time anyone speaks down on your current apartment.

Best,

Just go mega and get several roommates. All be it, it’s been a while, but we had the whole floor in a building with maybe 30 foot ceilings. We had a half court basketball court and bar in the living room. We had 4 roommates, but 2 were consultants who were never there. I payed the most at $1300/mo. Outside of the fact that there was one bathroom and the kitchen was not functional, it was perfect for where we were in life. 

I assume you'd need guarantors here as most places--at least in Manhattan--require your salary to be like ~40x rent. Assuming this is true, then you're short about ~$20k and will need your parents--for example--to step in. I assume Long Island City--especially a luxury apt--is no different. I know you mentioned you had a solution to this, but still something you want to iron out before pulling the trigger.

A couple of other considerations;

- I'd also get an idea of monthly electric, internet, gas/water (if not included in rent), etc. That can easily add hundreds of extra costs a month

- How about the security deposit? Is it one month of rent? Maybe 2? 

- Are there any brokerage fees that you have to pay? I know it sounds weird, but I've run into that in Manhattan more times than I care to admit

- What are your monthly cost of living expenses (e.g., transportation, food, cell phone)?

In any event, I did a very quick run here and I tried to keep the costs as low as reasonably possible...

Could you afford this off your salary alone? I mean... technically 'yes', but if you have student loans or other debts, gym membership (assuming the building doesn't have a gym free to use), etc., then it may get tough. Compounding this I didn't included any non-recurring expenses (e.g., entertainment, emergency healthcare) and this assumes your job remains intact. To be fair, I didn't include savings or other income you might have.

Still... you're cutting it a bit close. If you went down market for a $2k apartment, you'd have a lot more wiggle room. Maybe once you get a bonus and raise next year, then you pivot. But perhaps I'm just more risk adverse than you.   

Good luck!

General rule is 30% of your gross monthly income. In your case it would be 8.3K per month / 3K rent = 27.67%. I say close enough

That's insane to me that people pay that much to live there. I can, kind of, understand the draw of NYC, but we have a 4 bedroom house in Nashville and my mortgage is $1,400 per month (granted we put down 30%). The kid has a room, we have our room, I use 1BR for office and the other is a guest room.

I gross $80k and my wife works part time and brings in $30k. So $110k household income. Both cars are paid for and no student loans so no debt other than house. I auto-draft $2k per month into my brokerage account. So we save $24k per year (plus my 6% in 401k that is also matched). I would never, in a million years, pay $3k a month to live ANYWHERE. I could make $200k per year and I still would not pay that much. To each their own but I would feel guilty every day knowing how much I'm throwing away on rent. You're not building equity so that money is gone forever.  

If you love the industry and feel confident you're going to stay and rise through the ranks, go ahead and splurge. In the long run it won't matter if you pinch pennies or not.

But it's not a smart financial decision.

OP forgot the most important part of the equation for luxury apartment living - all that extra ass you can pull with it.

Although, when you factor in additional expected costs for said ass, it doesn’t give you a lot of breathing room on your current salary. What good is a nice apartment if you are sacrificing more than you should to get it?

Ultimately, it is your decision, but I’ve found that once you grow accustomed to a certain way of living it can be difficult to move back down a tier for financial reasons.

Good luck, OP!

I wouldn't pay 3k for a place unless I was making at least 250k. Crazy to do so on 100k

Is it the American Gardens Building on W. 81st Street?