What percentage of your income do you spend on housing?

[Fomerly known as something]

I spend 10% on rent in one of the most expensive housing markets in the country. My share of rent is $920 ($1,840/mo split with partner) and my monthly income is $9,090. We live in a small 1 bedroom apartment on rent control.

Salaries are high here and if you can find a place with rent control then it provides a ton of security. MMM has written extensively about levering high salaries in the city to your advantage. The key is living below your means, avoiding clown cars, and resisting the urge of lifestyle inflation. Standard Mustachianism principles.

For example: the coin-op laundry machines in our building are these terrible top-loaders that destroy our clothes while simultaneously not cleaning them very well. We dream of having in-unit front-loading machines, but how much more per month would that cost? Realistically we'd need to pay at least $600/mo more for a nicer apartment with the bells and whistles. Our solution is to go once a month to the laundromat and pay $10 to use their fanciest, luxurious SpeedKing commercial washer, using the bike trailer to transport the laundry. $10 < $600.

Curious how long you've been in a rent controlled place as $1840 seems very low for a 1 bedroom in the Bay area. Studios and even room rentals (with private baths) down here in coastal OC are often going for that much and one bedrooms are above $2k to $3k easy.  For lower income earners that would take a big percent of their income. TBH I'd like to see more people posting how much they pay and what they get for that as percent of income doesn't tell us much.

Yeah, you'd be surprised. We have only been here since Jan of 2020. The landlord was direct with us: they rent units slightly below market rate in exchange for having to deal with old pipes, crappy laundry machines, etc. For the entire first year of the pandemic our building had more vacancies and they were asking for even less that what we're paying.  Rents now are only starting to match the rents from pre-pandemic and our building complex always has several vacancies.

Sure, higher priced apartments are more common and the easiest to find, no doubt, but there are always bargains out there. I bike about 5mi each way to work. Most of my colleagues live farther away from the office and drive in. When I ask why they don't want to live closer, they almost invariably cite getting a larger apartment/house for the money. This shows us that it is never necessary to live in the suburbs. Rather, it's all about priorities.

I agree.  I’m in the North Bay because I decided being close to the Marin open space was important to me.  But I figured out a long time ago that housing is all about trade offs and even in an expensive place once can find a more affordable place if they are willing to look for it and make some compromises.

[Money Saver 1]

Around 60%.  I am working on increasing my income to bring living expenses down to 30%.

[iris lily]

We have always paid cash for our houses. Living in flyover country has its advantages. Even back when we were decades younger and buying a house at age 35, we paid cash.

We do, of course, pay “T” And “I” in the PITI. Before we renovated this house, our taxes were $1100 annually. That will go up but I have not seen the new figure reflecting major renovation.

[joe189man]

I feel incredibly lucky to have purchased housing when we did (2014 and 2018) and refi-ed both times to either lower term and rates or just rates. The P&I on my current home at the refi-ed rate of 2.875% and 2018 balance is about half what it would cost if i had to purchase it today at today's rates prices, about 50% higher purchase price and 6% rates.

@iris lily i love your echo chamber statement

[iris lily]

Here as an old person, I was trained up in the frightening aspects of mortgage interest back when mortgages were 11% 12% 14%. Yes I remember having interactions with those rates. Oy.
This is why I’d like to pay cash for real estate.

I actually don’t know how much of our income we pay for housing. Will you all send me to Mustachean jail? We have two houses, one in a small town and a condo in the city. Both of them are not expensive properties although I just got my first full Spectrum bill for Wi-Fi for the condo. Jesus Lord, there’s something wrong. $163 a month for Wi-Fi. Apparently there is some sort of landline deal with it but I do not want it. When I get through this current set of chores, I will will have to read them the riot act because it’s not what I signed up for.

[Gronnie]

PITI for us is 9.6% of gross income - and that's for an obscenely nice/large house for a family of 3. One of the perks of living in a flyover state but working for a CA company remote.

[CheapScholar]

1.33%. House is paid off, live in a place with low property taxes, and we are making good money right now.

[Michael in ABQ]

$1,750/month get us a 2,600 SF 5-BD/3.5-BA in a typical suburban neighborhood in Albuquerque. Not easy finding 5-bedroom houses for rent (that aren't starting at $3k+/month). There's just not as many homes being built that size as the average household size steadily shrinks. And even fewer for rent.

Now $1,895 with our 8% annual rent increase. Though as our property management (rightly) pointed out, that's still below market. A quick look online reveals basically no 5-bedroom rentals in the entire city for under $2,000 with most at $2,500+. Albeit those tend to be larger, nicer homes in more expensive areas.

An extra $1,740/year so that probably moves our percentage of income up a couple percent.

[dignam]

With recent raise, now about 12% of my income goes to housing (not including SO's contribution).  Bought this place in February 2018 for $198k; my neighbor just listed her place (very similar) for $325k and I have no doubt it will sell within a week or two, probably over asking.  I feel very fortunate.

[Pinch of salt]

16%. We rent in a VHCOL city, 1-bedroom, rent controlled and snagged it in the lows of the rental market and will likely not move for a very long time. 

[lifeisshort123]

We spend just under 14%.  Of course that doesn’t include the expenses that go into maintaining the home.  I am going to begin tracking those expenses.  We know that number will go down over the next few years as a percentage.  I’d love to get it down to 10%.  Our home is just fine for now, and am not interested in selling/moving in this real estate market.

[Askel]

I voted in the 0-10%, because our monthly mortgage payment is like 6% of net.   


...BUT....


Maybe I've been watching too many city planning videos or whatever- does this even paint any kind of picture about what it costs to live where I do? 

I mean, just for starters I have a $32k tractor/snowblower setup in the barn to keep my driveway open in the winter.  That's 32% of what this house cost outright. 

I used to live in a cabin that cost me $50k to buy. I always felt kind of smug about that when looking at what other people pay for housing. I felt even more smug about it when we recently sold it for $100k. LOOK HOW FINANCIALLY SMART I AM.   

But it was 40 miles roundtrip from work.  I lived there 17 years. Paying at least $7k/year in transportation costs. (See: https://forum.mrmoneymustache.com/welcome-to-the-forum/adding-up-my-total-cost-of-car-ownership/). The cost of the house was almost almost negligible in the face of those numbers.   SO FINANCIALLY SMART. :facepalm

So transportation costs are pretty intertwined with housing costs for many of us. 

(Despite the tractor, my transportation costs are much better now that I can ride my bike most of the time.)

But maybe there are other costs too? I don't spend a whole ton on recreation and travel, because I've got tons of great things to do literally right in my own backyard.  But if I hated where I lived or just felt the need to spend thousands of dollars on ski vacations because I couldn't ski at home, does that count in my housing cost as well?