How Much Rent Can I Afford in NYC?

Determining how much you can spend on rent is a crucial first step for any move. 

Although you might have a personal budget, you can’t count on those figures when you move to a different city, as settling into a new neighborhood can significantly change your cost of living. Use the following guide to determine how much you can afford to spend on your new rental.

Keep It Simple With a NYC Rent Calculator

“How much rent can I afford in NYC?” When asking yourself this question, keep in mind that there isn’t a one-size-fits-all answer. The amount you pay for rent should leave you with enough income to manage your essential expenses, debts, and lifestyle preferences.

You can use this simple NYC rent calculator as a starting point:

• Annual Income of $60,000: Rent up to $1,500
• Annual Income of $70,000: Rent up to $1,750
• Annual Income of $80,000: Rent up to $2,000
• Annual Income of $90,000: Rent up to $2,250
• Annual Income of $100,000: Rent up to $2,500
• Annual Income of $125,000: Rent up to $3,125
• Annual Income of $150,000: Rent up to $3,750
• Annual Income of $175,000: Rent up to $4,375
• Annual Income of $200,000: Rent up to $5,000

In addition to your personal finances, property owners might also have certain income requirements. So how much should you pay for rent given these conditions?

The following guide offers helpful formulas you can use to create a rent allowance that fits your specific needs.

Rules for Estimating Your Max Rent Payment

One of the first things most newcomers to the Big Apple find themselves wondering is, “How much rent can I afford in NYC?” There’s a good reason for that: New York is the single most expensive city in the U.S.

There are a couple of methods for determining affordable rent on an individual basis. Try either option or use both to see which one is more applicable to your situation.

The 50/30/20 Rule

While the 50/30/20 rule is a general guideline that’s best applied to your entire household budget, you can use it to calculate your maximum rent payment.

The rule allocates your monthly income by percentages. Exactly 50% of your income should go to needs (rent, utilities, etc.), leaving 30% for wants (entertainment, dining, etc.) and 20% for savings or additional debt payments. 

If you’re one of the many people asking yourself, “How much rent can I afford in NYC?”, half of your income should go toward your monthly living expenses, according to the 50/30/20 rule.

On a $2,000 per month salary, this only leaves $1,000 per month for rent, utilities, groceries, and other essentials. Even if you divert money from the remaining 50% of your income, this method would leave you with an uncomfortably tight budget.

The 40-Times-Rent Rule

Many property owners subscribe to the 40-times-rent rule. You may have to follow this rule even when you feel comfortable with a narrower income-to-rent ratio. It’s not enough to ask yourself “How much should I spend on rent?” when property owners use different methods for calculating income requirements.

The 40-times-rent rule simply says that a renter’s gross annual income must exceed the rent by 40 times. For example, qualifying for a $2,500 apartment would require an annual gross income of $100,000.

You can arrive at this same figure by setting aside 30% of your income for rent. Calculate your gross annual income, then multiply that number by .30. Divide the answer by 12 to determine how much you should spend on rent each month.

Exceptions to the 40-Times-Rent Rule

While many landlords and property managers follow this rule, not all of them do. Additionally, some property managers might be flexible for renters with exceptional credit. Even so, trying to adhere to the rule will benefit you by ensuring that you have more disposable income at the end of every month.

Options for Lowering Your Living Expenses

Even if the 50/30/20 rule or the 40-times-rent rule don’t work for you, there are other options to consider. These solutions might require changing your lifestyle temporarily, but they can help you move into the NYC neighborhood of your dreams.

Try Co-Living

The budgetary benefits of co-living attract many people who can’t afford the high cost of rent throughout the city. Roomrs offers co-living apartments that make it easier to meet income requirements.

In addition to splitting the rent with others in your unit, this option includes a rent payment that covers the costs of utilities and other services.

Get a Guarantor

A guarantor is similar to a co-signer on a loan. Essentially, they co-sign your lease and agree to uphold your legal responsibility for paying the rent. A guarantor can be a relative, friend, employee, or anyone willing to take on this obligation. This approach can help you get into an apartment faster when you have to relocate for work or school.

Look at Different Neighborhoods

One attractive feature of New York City is that the subway system will take you almost anywhere. As long as your home is within walking distance of a subway stop, the entire city is accessible.

This helps when you need to rent a cheaper apartment that’s not as conveniently located. If you can’t find an affordable rental in a prime area, look for low-cost apartments in nearby neighborhoods.

Boost Your Income

It’s easier to generate additional income in the modern era with the accessibility of the internet. Just pick a side hustle that interests you and begin marketing your services. Dog walking, photography, accounting, graphic design — services like these provide excellent freelance opportunities.

Pursue a side gig in your spare time to increase your monthly income and gain access to better living spaces.

Explore the Co-Living Alternative

Roomrs makes it easier to afford rent in any NYC neighborhood with competitive room rentals. Since you’ll share your living costs with other renters, you’ll be able to afford an apartment that might otherwise exceed your budgetary limits. Stay close to work, school, or the community resources that matter to you.

Browse our affordable room rentals today to find your next home.