Happy Holidays! As we approach the end of year, and another surge (sigh), I hope this finds you and yours safe and sound.
In other news, the rent is STILL too damn high. JJ McCorvey of the Wall Street Journal reached out to me to discuss. His piece focused particularly on areas where rents have been rising as a relatively new phenomenon as opposed to NYC and the Bay Area where it’s sort of old news. His piece, The Cost of Rent is Where Many Americans Are Feeling Inflation Most is aptly titled. Millennials in urban areas with high populations of renters are affected considerably more by rent inflation than skyrocketing cream cheese costs or whatever, although New Yorkers do love their bagels too! (Sidebar on the cream cheese: is it just me or is Junior’s cheesecake just ok? Please reply to this email to respond. Seriously, I want to know if it’s just me.)
So, after being interviewed for the piece on rental inflation and reading the article, I put together some thoughts on how we at Brooklyn Plans approach renting in a city with high rents. I think rent is really wrapped up in people’s identity and success. Once people have achieved a certain level of success or salary, they think the apartment to match comes with it, but this is only the case if the numbers justify it. You may have a great six figure salary, but if you have debt that you’re paying off, a kid and a car, you might need a rental that is much more modest than you’d expect.
It’s important to know what you’re getting into prior to getting an apartment. The conventional wisdom doesn’t work anymore about keeping your rent to 30% of your income. You have to sit down and do the math. After rent and your bills are paid, how much would you have left to work with for the month? Is that enough to cover everything that’s not a bill: food, clothing, going out and allowing for you to save?
The good thing is that if you’ve gotten into a lease that is higher than you can afford, you can move when your lease is up. It’s not a permanent situation. This is always a hard conversation to have with clients but is sometimes the most surefire way to improve their financial standing if the numbers just don’t work.
While rent can be difficult but not impossible to negotiate, It’s a good time to negotiate for a higher salary with the job market being what it is. If you can’t afford to rent an apartment in the city you live and work in, then you’re likely not being paid a living wage. Workers have the bargaining power for the first time in decades to seek out higher paid work or to ask for more from current employers as competition for employees is fierce.
Be flexible and creative. Are there neighborhoods you haven’t explored or considered? Can you deal with a weird layout or small bedroom if it fits better in your budget? They say in real estate there, you can have 2 out of 3: location, size, price. Get clear about what your priority is and be ready to be flexible and give on the other one.
If you can be modest about your rent, you can live a much more fabulous life overall- traveling, eating out more, or saving up to buy a place of your own.