How to Afford an Apartment in New York

If New York City is notorious for one thing, it's the cost of living. While rental discounts abound these days, it's always smart to pause and ask yourself, "How much rent can I afford?" In essence, the key to financial happiness for a renter is understanding your rent to income ratio. This will help you create a sustainable budget that leaves cash left over for fun stuff, like travel, dining out, and multiple streaming services. Below, real estate experts share tips for securing your dream apartment — affordably.

Fort George

60 Thayer Street

$2,400 No Fee

2 |

1

Inwood

145 Seaman Avenue

$2,100 No Fee

1 |

1

Hamilton Heights

531 West 135th Street

$2,045 No Fee

2 |

1

Lenox Hill

519 East 78th Street

$1,902 No Fee

Studio |

1

Hamilton Heights

456 West 148th Street

$2,470 No Fee

3 |

1

Lenox Hill

1482 York Avenue

$1,902 No Fee

Studio |

1

Lenox Hill

536 East 79th Street

$1,879 No Fee

Studio |

1

Morningside Heights

3117 Broadway

$2,475 No Fee

2 |

1

Manhattanville

3333B Broadway

$2,025 No Fee

1 |

1

East Village

206 East 10th Street

$2,200 No Fee

1 |

1

East Village

605 East 11th Street

$2,500 No Fee

1 |

1

Washington Heights

528 West 159th Street

$2,475 No Fee

3 |

1

How Much Rent Can I Afford? The 40 Times Rent Rule

Many landlords, brokers, and property managers subscribe to this rule. Typically, your gross annual income should equal 40 times your monthly rent — that's your rent to income ratio. The following example crunches the numbers: For an apartment that costs $2,500 per month, the renter's gross income should be $100,000 per year. And of course, proof of salary will be required.

Still a bit fuzzy about the numbers? Just take your annual income, before taxes, and divide it by 40. That's your total. Now, when you wonder "How much rent can I afford?" you'll know the exact answer.

Here's another way to look at the math: You should spend no more than 30% of your income on rent. To calculate, multiply your gross annual income by .30 and then divide it by 12. You will end up with the same number as the 40 times rule.

Are There Exceptions to the Rule?

^{You'll need to determine how much rent you can afford before signing an apartment lease. (From a listing at 278 First Ave. #7D)}

If you have an excellent credit history, some landlords are willing to bend the 40 times rent rule. On the flip side, some buildings actually require an even higher income, sometimes 50 times the monthly rent.

"If an apartment is independently owned, or owned by a smaller entity, there may be some flexibility," says Ivana Tagliamonte of Compass. "For example, I've seen many instances where perhaps the tenant does not meet the income requirement of 40 times the rent but has excellent credit, no liabilities, and a solid amount of money in the bank. Often, with smaller landlords, applications are viewed case-by-case."

Brighton Beach

3111 Brighton 7th Street

$1,999 No Fee

2 |

1

Kensington

426 Mcdonald Avenue

$2,200 No Fee

2 |

1

Prospect Lefferts Gardens

250 Hawthorne Street

$2,150 No Fee

2 |

1

Williamsburg

72 Skillman Avenue

$2,500 No Fee

1 |

1

Kensington

426 Mc Donald Avenue

$2,100 No Fee

2 |

1

Ocean Hill

1223 Herkimer Street

$2,500 No Fee

1 |

1

Bay Ridge

7200 Ridge Boulevard

$1,900 No Fee

1 |

1

Fort Hamilton

419 91st Street

$2,500 No Fee

3 |

2

Bushwick

77 Weirfield Street

$2,395 No Fee

2 |

1

Midwood

1917 Avenue O

$2,100 No Fee

2 |

1

Crown Heights

637 Saint Marks Avenue

$2,150 No Fee

1 |

1

Crown Heights

24 Rogers Avenue

$1,975 No Fee

1 |

1

Consider a Guarantor

What can you do if you can't get around the 40 times rule? It's time to find a guarantor. What is a guarantor? A guarantor is someone who is legally obligated to pay your rent if you cannot.

Astoria

23-28 31st Avenue

$1,695 No Fee

1 |

1

Ditmars-Steinway

28-08 23rd Avenue

$2,245 No Fee

2 |

1

Briarwood

141-45 85 Road

$1,720 No Fee

1 |

1

Astoria

14-48 31st Avenue

$1,600 No Fee

1 |

1

Woodside

39-20 65th Street

$2,299 No Fee

3 |

1

Astoria

28-10 36th Street

$2,000 No Fee

2 |

1

Briarwood

142-35 84 Drive

$2,395 No Fee

2 |

1

Astoria

30-59 47th Street

$2,345 No Fee

2 |

1

Ditmars-Steinway

22-56 37th Street

$2,300 No Fee

2 |

1

Astoria

30-09 42nd Street

$2,200 No Fee

2 |

1

Astoria

24-30 43rd Street

$1,895 No Fee

2 |

1

Ridgewood

18-66 Himrod Street

$2,250 No Fee

2 |

1

What About Brokers' Fees?

Monthly rent isn't the only cost to consider when asking yourself, "How much rent can I afford?" For some apartments, you also have to pay a broker's fee, which can run around 15% of the annual rent.

It's definitely possible to find apartments without a broker's fee, though. Try searching for no-fee apartments on StreetEasy.

More Costs to Consider Besides Rent to Income Ratio

There are a couple more costs to remember when wondering, "How much rent can I afford?" For example, many landlords require tenants to pay the first and last month's rent up front, in addition to a security deposit.

"I would also consider transportation costs, especially if you find a great apartment that's far from the subway," Tagliamonte says. "An affordable studio may not actually be affordable if you're spending a fortune on Ubers."

Rent Concessions

Something else to watch out for? Rentals that offer discounts on the first year's rent, such as rent concessions or net-effective rent. While these apartments initially look like they're within your budget, the second year will provide an unfortunate shift. "With a lot of rent concessions out there, people can get a little bit sidetracked," says Feldesman. "When those incentives no longer apply to the second year's rent, you may discover you can't afford your apartment anymore."

Taking all these factors into consideration should help you figure out the right amount of rent for your budget, this year and beyond.

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Whether you're looking to rent  or to buy , find your next NYC apartment on StreetEasy.

How to Afford an Apartment in New York

Source: https://streeteasy.com/blog/how-much-rent-can-i-afford-in-nyc/

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