What percentage of your after tax income is devoted to housing?

There is an age old adage that your monthly housing expense should never be above 30% of your after tax income that I think is completely irrelevant in today's rental and housing market.

I'm curious to see what the average renter's/home owner's monthly expense including everything (HOA, utilities, PITI, etc) relative to after tax income is on a monthly basis.

I am currently at 32% in a major SE metro.

 

I'm at roughly 30%, not counting 401k contributions, healthcare, year end bonus etc. just the percentage of cold hard cash wired to my account every month. This includes utilities, internet, and streaming subscriptions.

20% gross including utilities, internet, streaming subscriptions

p.s. I have no roommates

Array
 

Mine is around 17% gross and maybe 24%ish net salary. Bonus drives that down to 11%/16.5% respectively.

Living with a girlfriend is pretty cool. On my own you'd double all of those.

Commercial Real Estate Developer
 

I'm at about 55% net/33% gross, but have a mortgage/prop taxes, etc (living in an investment prop.), so I have been able to write off the interest (at least for now). If you factored in the write-offs for prop taxes/interest, it probably knocks me back down to between 35-40% net, but that's also not factoring in that I'm (theoretically) building equity unless the housing market blows up before I am able to sell.

EDIT: should mention that this is on monthly income only, does not include bonus.

"Who am I? I'm the guy that does his job. You must be the other guy."
 

How's that working out for you? Did you have to downgrade on location/interiors/lifestyle to go this route?

I always think about it, but then I remember I'm an apartment/townhouse snob.

Commercial Real Estate Developer
 

Chicago has really hurt people on housing costs lately.

I bought 5 years ago. My condo assessments up 50%. A good chunk of that due to minimum wage hike .

Property taxes up 50%. And no they can’t be deducted.

My best friend was also paying 3k a month rent.

In 5 years I’ve went from paying 5,500 a month on my mortgage (after value of tax deductions rent etc) where 2500 a month of that was mortgage principle to now I’m paying 11k a month with the same amount paid in principle. Though probably adding a roommate soon.

Had a lean bonus year too. NYC real estate likely to have some problems now too with end of salt deductions. But Chicago was hiking taxes etc too.

 

21-23% of gross*, depending on what you classify as housing costs vs. other expenses. House in the 'burbs in the southeast.

*Because we are wildly risk-averse, my wife and I treat my salary as our income (which functions as the denominator here). We bank her salary and bank my bonus. Including those would skew the figures lower and reveal the crazed depths of our fiscal conservatism.

"Son, life is hard. But it's harder if you're stupid." - my dad
 

26.6% of gross for a 1 BR in NYC (great neighborhood, older building). I kind of have to chuckle at the people not in SF/NYC who complain about housing costs. I would give my left nut for housing as "expensive" as Chicago/Boston/Atlanta.

 

Amen! We're in a pretty small 1-bedroom condo in Chicago at 3.5% of our total gross income (married). Living below your means is pretty underrated IMO...

 

Really should be adding in the cost of having a car when comparing tier-2 cities to places like NYC as you probably will need a car to get around in the former and not in the latter.

For example, it you spend $1500/month on rent on a $100K salary, that's 18% gross spend on housing. But taking into account having a car at say~$500/month (payment, gas, insurance, etc), then that number becomes 24%, much closer to what people pay in places like New York.

To be fair, you should also add-in the cost of getting around in NYC too (taxis, subway, etc). But even then, I would say the difference isn't quite as pronounced as it originally may seem.

 

cars and living with ya women absolutely impact these metrics. Need to bake those in (garage, gas, insurance, sharing a bedroom) and then look at it, on a gross basis. If you want to live downtown, with walkability, alone, in a cool city, you will probably be spending 30%+ once adjusted for the factors mentioned.

"Money coming, money going, aint like you can take it with you" - Plato

 
Commissions and fees:
cars and living with ya women absolutely impact these metrics. Need to bake those in (garage, gas, insurance, sharing a bedroom) and then look at it, on a gross basis. If you want to live downtown, with walkability, alone, in a cool city, you will probably be spending 30%+ once adjusted for the factors mentioned.

"Money coming, money going, aint like you can take it with you" - Plato

-Michael Scott

 

I live in a major metro in the Midwest and I'm at about 32% if i exclude Grocery, Discretionary and Student Loans (this last one is about half my housing - worth every penny though). 52% for everything (including car payment and gasoline costs). I should also note that I don't dine out as much as I used to which has saved me a ton of money. I'm a good cook (used to be an assistant chef - not accredited or anything just got really good at it) and got back in the groove of really enjoying making my own meals (I hated commercial cooking and it took me years to shake off that damage).

"I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing. " -GG
 

I lived in Nashville during the absolute time rent-wise. I hear talk of 2-3 months free these days, meanwhile I still, in 2018, in a much bigger market, have not hit my 2015 Nashville rent.

Commercial Real Estate Developer
 

I live in London and I'm at about 38% of after tax. This has improved massively in the last year due to promotion etc. I have stayed in the same flat since my first year working where I was at about 50% but love the flat so much I chose to stay when my roommate moved out and and girlfriend moved in. I'm happy there so plan is to stay for the forseeable future and watch that percentage continue to drop as my salary increases.

 

38% in North Dallas.

Note: I've spoken with many Class A++ Developers in the Texas market and they are rather bullish that the majority of their tenants (young professionals/millennials) will shell out up to 60% for the high-end luxury finish and amenity structure. 100+ million dollar asset manager confirmed that their best tenants are the recent graduates using their high-rise residency to network -- ie they will pay more than asking rent for the potential future benefits.

 

not saying people on this forum/thread are lying (I'm assuming most people here are financially literate/savvy) BUT...being a Sr. Mortgage Banker who is ranked as one of the top producers in my area, AND working directly under the Top mortgage banker in the state....I'd say everyone reporting their DTI ratios is doing an EXCELLENT job. Most people we see closing on home loans here in SE VA...back end ratios are well above 40%. In fact, the last 5 pre-approvals I've issued, have all been over 50% back-end ratios. Not saying I recommend this type of reckless spending, just reporting the facts. I myself-- my primary residence is only 1.27% of my Gross...if I include water, electric, internet, etc...maybe 1.5%...and I live "Down Town" (if you lived here you would see why I have quotes around it) In an upscale condo/loft. This is only including my salary+ commission from doing mortgages, not my investments, rental income, etc

Wise Men Listen & Laugh While Fools Talk
 

you couldn't be more correct. in fact...most people I say "you're pre-approved up to 250k" ....call me back later and say.... "hey I found a home at 260k, can we still make an offer?"
very rarely am I adjusting my pre approval letters downwards....which is saddening at times--- as I always tell my clients "I can **always **approve you for more than you can afford" .

Wise Men Listen & Laugh While Fools Talk
 

If I play my cards right, I'm about to go from 39% net/26% gross to 12% net/8% gross, and that will include parking. Northern Virginia

Quant (ˈkwänt) n: An expert, someone who knows more and more about less and less until they know everything about nothing.
 

GROSS: Rent: 10.3% (excl. bonus) Rent + Utils (electric, water, internet): 11.76% (excl bonus)

NET: Rent: 14.35% (excl. bonus - factoring for 401k+insurance) Rent + Utils (electric, water, internet): 16.35%

I either live in a low cost of living city, or I make a shitload of money. I'll let you guys figure that out.......... (it's the former)

 

Own a 1BR in Chicago. Above average but not luxury unit. 24% of combined monthly salary for fiance and me. That includes HOA + gross interest and taxes + insurance + cable/internet/utilities. Doesn't include principal payments. Bonuses would knock that number down but principal inclusion would cancel out a portion of it. Fiance = economies of scale.

 

I'm in London and it's c22% inclusive of all bills. I share an apartment but have my own bathroom. I suppose I could get my own place, but right now I don't see the point as during the week I barely spend any time at home aside from dinner and sleeping and the apartment is nice enough to bring girls to. Plus I'm on a very favourable contract that I'll surely step down on if I move. I'd rather just save for now. When I first started working, the same place was c40-45% or so of my net income, but over time that has risen while as my rent really hasn't.

 

Moved to Austin a year and a half ago from NYC. After concessions, we were initially paying $1,600 for a 900 SF one bedroom in one of the newest buildings downtown. Definitely beats the $3,000 we were writing on the UWS...

Have since bought a 3 BR 3 BA home just outside of downtown and are now paying 21% of our net monthly pay (inclusive of HOA and utilities), not including year end bonus. Have recently received a sizable promotion that skews that percentage somewhat, but definitely still favorable.

 

Consequatur enim nesciunt et. Iste aliquid modi temporibus vel perspiciatis nihil accusamus. Deleniti consequuntur excepturi corporis voluptates expedita.

Delectus ea repudiandae rerum doloremque ad quia aperiam. Animi sed in est id.

 

Voluptatibus nihil qui omnis voluptatem molestiae sit similique quia. Temporibus et nihil soluta est. Ut ex assumenda ut. Eos impedit labore necessitatibus quos.

Similique ullam libero accusantium omnis sint qui eum soluta. Repellendus consequatur est perferendis tempora similique harum et. Iste soluta adipisci commodi amet error nobis. Iste voluptatibus non unde eveniet.

Consequatur sed consequuntur voluptatem pariatur id molestiae. Deserunt beatae porro similique nihil neque cum nihil. Rerum cum quisquam rem voluptatem. Magnam mollitia voluptatem omnis maxime nulla beatae sit saepe.

Aliquid ratione totam repellat laudantium ab. Nulla soluta repellendus debitis mollitia eligendi et. Voluptatem autem sed tempora non debitis vitae. Qui nulla provident dicta.

 

Magni expedita dignissimos qui molestias voluptas ullam. Quibusdam mollitia veritatis necessitatibus vero aliquam maiores et sit. Itaque non ut aut quis suscipit doloribus adipisci.

Sit aut error quis ut reprehenderit modi. Explicabo necessitatibus dolorum harum esse.

Necessitatibus et corrupti dolorem mollitia natus minima cum nihil. Doloremque incidunt dolorum commodi officia. Qui esse eum voluptatem recusandae.

 

Perferendis dolorem voluptas autem et vel officiis. Eius harum molestias quam corporis provident ad quia voluptatem. Totam voluptatum ducimus sed inventore nisi. Dolorem ut eaque et magni et et. Vel ab pariatur laudantium.

Id repudiandae pariatur delectus facere dignissimos. Ut non quis quis labore. Assumenda doloribus modi commodi cumque recusandae velit. Nam expedita et inventore facere. Enim ut esse vel et quia sint.

Quam minus rerum culpa rerum. A ad accusantium architecto architecto dolorem qui. Impedit nemo dolor autem cupiditate corrupti. Minima facilis earum eligendi tenetur consequatur maiores. Sint minus doloribus mollitia ea quod beatae earum. Sit voluptas voluptatem consequatur velit ratione sunt sequi tempora. Corporis quibusdam aliquam delectus qui.

Praesentium ipsa optio aliquam accusantium nam. Dolore asperiores ducimus alias perferendis.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”