What's the absolute most I should spend on rent?
Moving to NYC soon and do not want to live with roommates. I'm also flexible on location due to COVID. What's the most I should allocate to rent? What's the post-tax paycheck on an $85K salary?
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Depends on what you want. Generally 25% to 30% of take home pay is consider normal.
Well the absolute most you will be able to spend (without a guarantor) is the 40x rule (and most places won’t count your bonus as a first year).
So you are looking at 2,125 a month based on that rule unless you can find a place that will give you some credit for bonus.
Then you need cash up front (potential fee, security deposit, first month as a minimum).
I probably wouldn’t feel great spending that much unless I was pretty confident on getting a reasonable bonus, but would be doable and should most be ok if you are reasonable with your money.
You can go a little higher to $2,375 given the 40x rule if you got the $10k signing bonus. All the places I looked let me count it. I wouldn’t spend that much though and prices have dropped a little with covid so you could find a super small studio that isn’t that nice for $1,850ish.
40x is an upper limit. I’ve never gone near 40x. Live within your means
Yeah, not a good idea to max out the 40x rule unless you absolutely have to and its only for a year or two. Life is more fun when you're not spending all your money on rent.
When I first moved to NYC on a similar salary I lived with a roommate and felt comfortable paying $1,400. If you want to be on your own you'll have to pay more, but if I were you I'd try to keep it south of $2K, which will be a challenge depending on your standards.
I had a similar salary my first year in NYC, I was spending $1,850/month with one roommate in East Village. The average for my friends in similar comp levels as me was $1,600-2,000/month, all in decent Manhattan locations (cheaper usually means more roommates).
Fun coupons from mid-month check and rent + bills for end of month check. All of my friends operated under the end of month check goes to rent + bills scenario. Very common amongst the professional crowd during their first few years out of college in NYC.
Assuming no support, anything more than $1,800-$2,000 will start pushing you over this point after taxes and 401K contributions.
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