Sometimes we may not have the option of choosing where we want to leave. A new job, college transfer or other factor can force our hand. Whether the choice is yours or the result of an unforeseen relocation, you need to be aware that in some cities the rents are more expensive than others. And, that could mean not getting renters insurance simply because you think you can’t afford it.
While cities like New York and San Francisco generally come to mind as the most expensive, you might be surprised to learn that there are five other places, based on someone’s income that can make it necessary for you to get a roommate in order to afford your rent.
The average monthly rent in New York was $1,228 and $1,598 for San Francisco in 2014 and that still didn’t qualify them as the most difficult cities in which to meet the rent.
In a recent survey – according to data released from Harvard University’s Joint Center for Housing Studies – the share of American households that rent their residence rose to a 20-year high of 35.5% in 2014. Known as the 30 percent rule, the conventional financial wisdom for years has held to the belief that you shouldn’t spend more than 30% of your income on housing. However, times have changed and that rule may be outdated given the share of renters aged 25-34 paying more than 30% of their income on housing increased from 40% to 46% from 2003 to 2013.
The Harvard report also states – of that group – those with more than half their income going toward rent rose from 19% to 23% over the same period. That is not good news for renters wishing to go it alone, without an additional person sharing their apartment.
Using data from Harvard’s housing study, Make Room, a group attempting to raise awareness of the struggles of paying rent across the country has constructed a list of 5 U.S. cities where you’ll most likely need a roommate to make the monthly rent.
5. Fresno, Calif.
• Typical median annual household income: $26,600
• Amount household can afford in monthly rent: $ 665
• Amount household spends on rent and utilities: $870
• Percentage of households paying more than half of income for rent and utilities: 32%.
4. Los Angeles
• Typical median annual household income: $40,000
• Amount household can afford in monthly rent: $1,000
• Amount household spends on rent and utilities: $1,260
• Percentage of households paying more than half of income for rent and utilities: 32.3%.
3. New Haven, Conn.
• Typical median annual household income: $30,000
• Amount household can afford in monthly rent: $750
• Amount household spends on rent and utilities: $1,020
• Percentage of households paying more than half of income for rent and utilities: 32.9%.
2. New Orleans, La.
• Typical median annual household income: $27,000
• Amount household can afford in monthly rent: $675
• Amount household spends on rent and utilities: $ 903
• Percentage of households paying more than half of income for rent and utilities: 35%.
1. Miami, Fl.
• Typical median annual household income: $32,000
• Amount household can afford in monthly rent: $800
• Amount household spends on rent and utilities: $1,100
• Percentage of households paying more than half of income for rent and utilities: 35.7%
Your annual income and size of your residence will dictate whether you need a roommate or not to make the rent. If you have to share the rent, make sure to ask for references and as much background information as possible, including a credit report before you hand over the keys to your front door.
In either case, be sure to get renters insurance to protect your stuff from theft or damage from an unforeseen event. Bundle your auto insurance and renters policy together to save money on both. Why not get a free renters insurance quote today?
Do you currently have or do you plan to get a roommate in the future to help you pay the rent? How will you go about it? Feel free to share your thoughts in the comments section below.
