Where do you live in NY and what do you pay in rent as a Jr. / Sr. HF Analyst?

Currently working in PE making ~$300-325k and moving over to a HF job where they have signaled comp to be in the $400-500k range (and if I perform well I guess further upside from there).

I'm in my late 20's (spent 2 years in army so older than most of my classmates) and have been living with my best mate in a 2 bedroom in the UES where I pay $2k a month. Due to COVID, he will be moving out and I have to decide if I downsize to a 1 bedroom in my building or try something new by moving to a totally new area. I was initially thinking Brooklyn (Williamsburg? Dumbo? BK Heights?) or potentially doing an even crazier move by going to Hoboken to save the ~4% / ~$15-20k city tax which can be put towards a nicer / larger apartment (don't really care about "going out"). I considered West Village / Tribeca but most apartments look like shoe boxes and I don't really care for the "vibe" as a key priority.

I'm generally pretty frugal but with COVID allowing my new firm to likely partially work from home, I feel I should at least live in a place big enough to not feel like a shoebox and also have an easy 30-35 min max commute into Grand Central area for days I work out of the office.

Is $2500 rent too frugal for someone earning $400-500k? What is "normal" / range you've seen for rent as % of total pre-tax comp? I know it's a personal decision at end of the day with regards to both location and budget, but wanted to poll others in this forum who are in a similar position (i.e. not asking for the PMs making 7 figures or the banking analysts making <$150-200k a year). It seems you can get a nice 1 bedroom in luxury buildings for $3500-4000 and nice studios for $2500-3000 in current market FWIW.

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Comments (15)

  • Investment Manager in HF - Other
Apr 21, 2021 - 7:41am

As you said, a personal decision and you want to factor in your lifestyle, any other debt, etc. But when I was at that income level I felt very comfortable at $4-4.5k a month. Your base/bonus split will also matter, as you don't want to feel like you are out of cash every month, but even with a $200k base you should still be ok at that level as long as you don't have lots of other obligations. 

With WFH I would highly recommend getting a place you like. Something comfortable and close to the area you want to be in. 

  • Analyst 1 in IB - Gen
Apr 21, 2021 - 9:30am

1st year analyst making abt $180k, but I have this side thing that makes ~200k so total annual around ~380-400k pre tax. I pay $3k a month in rent, which I think is reasonable. If you're in the 400-500k range, I feel like $5k a month is pretty reasonable. 

Just curious, how large is the HF, and would you say it's a top SM?

Apr 21, 2021 - 10:22am

What do you do on the side that earns you so much $?

Array
Apr 21, 2021 - 9:59am

I'm in a similar position (as are many friends / others in network). As others have said, it is ultimately a personal decision that will come down to your own preferences / situation (for instance, single or not). With WFH, I would recommend a place you really like. Additionally, I know that PE can be a stressful job, but the stress that comes from markets (re: constant P+L / news / events) at HF can make having a place you really like that much more of a positive / stabilizing force in life.

I wouldn't necessarily say that $2500 is too frugal, because it comes down to personal preferences. That said, I would also say that you do not need to feel guilty / irresponsible if you spend up to $5k-$6k a month either.

Full disclosure: spend ~$6k per month, 2br good location, not single

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  • Research Analyst in HF - EquityHedge
Apr 21, 2021 - 10:57am

Similar position as you although I started my HF gig in 2019. I paid 3.5-4k last year and am stepping up to ~5k this year. COVID/ WFH gave me a greater appreciation for my apartment so I feel ok that I am splurging. 2.5k seems quite low in Manhattan but maybe reasonable in BK/Hoboken. 

Apr 21, 2021 - 1:12pm

^ this is big one. had a couple roommates before/during pandemic, but WFH made me realize I needed more space to deal w/ daily stress. having own place made a huge difference. at this comp level in the HF space, have personally prioritized whatever it takes to stay physically healthy and mentally sharp. 4 years into the HF gig, you appreciate what a marathon this game is.

Apr 21, 2021 - 2:36pm

It's all about upside/downside analysis. Never skimp on stuff to save money if the downside is you will not perform to your full potential and miss out on bigger bonuses/comp. The guy who washes and irons his shirts instead of having them dry cleaned is a great example. Create a lifestyle that (i) you enjoy and (ii) is within your budget so that you aren't in the red every month. After a long day at the office you want to come home to a nice clean place and also, as a single guy, I presume you want a place to bring girls back to that will make them feel comfortable to spend the night. 

Apr 21, 2021 - 3:10pm

Left banking to move into a PE role, but last year I made ~$700K total (on a $250K base; in the new role I anticipate ~$400K in cash). Last year I paid ~$4K for rent, reduced down to $3,700 with three months free for this year. Staying in the same place, just negotiated because the market was bad when I was up for renewal. Place is not huge, but fine for me - I am single and live alone in a 1BR in the West Village / SoHo / TriBeCa area.

The reality is that it just comes down to what your overall savings goals and broader expense profile looks like. The normal rule of thumb is that you can go up to ~30% of your after-tax income for your housing and be in a good spot. That is roughly where I was on my base salary, which I felt comfortable with. I also basically targeted savings  of ~30% of my base + 100% of my bonus (which, given the banking construct, means I was really saving like 75% of my overall income). I don't work at HF, but in general I think it makes sense to size your life off of your base salary, and then let the bonus accrue to savings as much as you can (obviously if you get an enormous bonus and want to splurge a bit to reward yourself, that's great). If you're saving around 30% of your guaranteed income each year, the way you allocate the other 70% doesn't really matter and comes down to personal preference. 

Array
  • Investment Analyst in HF - Event
Apr 21, 2021 - 3:54pm

It's a personal decision based off other priorities as others said. 1st year analyst (almost 2nd now) at a hf out of school. Pay a lot less than 2k and still live in a good apartment, thanks to covid, in a great part of the city (around the village) with a friend

I don't mind living with roommates since I had at least 2 all 4 years of college and I like it more this way at least for now plus I get to direct a lot of the money I save on rent towards a very big amount of loans and save for other stuff I'd rather spend more on  (not drugs..)

  • Associate 3 in PE - LBOs
Apr 22, 2021 - 1:09am

Not directly comparable, but my SO and I are at $400k total, and we pay $3.8k in Hudson Yards area for an upscale 1bd + den so we can WFH. I'd worry less about being too frugal and more about your comfort - you can afford $4k easily, maybe $5k depending on base vs bonus split, but if you're happy with $2500 and a commute who gives a fuck? Extra $ in your pocket... alternatively, if $4.5k gets you in a place that you feel good waking up in and coming home to, then spend the money. As long as you meet your budget, life's too short to pinch pennies

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