There’s no doubt about it, rents are out of control. That’s especially true in large cities, but you might be surprised to know that it is true in small, rural areas as well. It all comes down to supply and demand. If you’re looking at your own budget, you might be wondering is $800 a month a lot for rent? Well, it all depends…
Is $800 a Month a Lot for Rent?
The simple answer is that it depends on the location.
You’ll see a wide range of prices in different parts of the country.
If you look at some major U.S. cities, you’ll see that $800 is actually pretty cheap.
Take a look at New York City for instance. The average rent in Manhatten is $3,500 dollars a month. In other areas of the city is it around $2,900 dollars per month.
What is the 30% Rent Rule?
In the United States, the general rule of thumb on whether or not you can afford to pay rent is this:
The total amount of money you spend on your rent should be less than 30% of your take-home income.
What is Take Home Pay?
Take-home pay is the amount of money you earn after taxes and other deductions such as health insurance and your 401K if you have one.
This is a simple way to look at your income and see how much you actually have leftover for things like rent each month.
On average, take-home pay (or net income) is about 70% of gross income.
So let’s say that you earn $2,000 every month before taxes and other deductions.
That means your take-home pay will be about $1,400 per month ($2,000 less 30% for taxes and other expenses).
So, where does that leave you when it comes to paying rent? If you’re looking to pay $800 dollars per month or less you might be in trouble.
The Average Cost of An Apartment in San Francisco
So let’s take a look at San Francisco, California.
The average rent for an apartment in San Francisco is $2,905 per month for a one-bedroom apartment.
That’s a pretty high price.
So, if you were to rent an apartment in San Francisco, you would need to earn at least $9,600 each month (or $115,000 per year) to be able to afford it based on the 30% rule.
The Average Cost of An Apartment in Chicago, Illinois
The average rent for an apartment in Chicago is $1,800 per month. So you can see that this is a much less expensive place to live than San Francisco.
Again, let’s use the 30% rule to figure out how much you would need to earn every month if you were to rent an apartment in Chicago.
You would need to earn $6,000 dollars per month or $72,000 dollars per year every year in order to afford a one-bedroom apartment in Chicago.
The Average Cost of An Apartment in New York City
Let’s take a look at the average cost of an apartment in New York City.
The average rent for a small apartment in New York is $3,500 dollars per month.
Keep in mind, the average size of an apartment in NYC is 700 square feet. That’s pretty darn small.
So, using the 30 percent rule, you would need to make $11,700 dollars per month or $140,000 per year to afford this apartment.
Let’s get out of the big cities and see if we can do better and find a place that you can afford for $800 dollars per month.
The Average Cost of An Apartment in Kansas City, Kansas
How does this apply to a smaller city?
Let’s take a look at Kansas City, Kansas.
The average rent for an apartment in Kansas City is $834 per month, and the average size is 800 square feet.
You would need to make $2,780 per month or $$33,300 per year to afford this apartment.
That’s a bit more reasonable and starts to fall into the lower end middle class salaries.
The Average Cost of An Apartment in Terre Haute, Indiana
I’m sure most of you have never heard of Terre Haute, Indiana. It’s a smaller city with a population of around 80,000.
It’s in the middle of the country and surrounded by farmland.
The average rent is $550 dollars per month and that’s up 5 percent this year.
So, here, you would do well with your $800 dollars that you have available for rent.
The thing is, I have a good feeling that the rents on the lower end of the scale aren’t going to be great, so you should plan on paying $650 to $750 a month even here
The Average Cost of An Apartment in a Small Rural Town
I wanted to throw my town in here as well. I live in a small town with a population of 9,000. It’s in the middle of a cornfield.
There isn’t a decent restaurant and you have to drive 30 minutes to go to a Starbucks…which would be in Terre Haute.
While rental prices are much lower here, they are more than you would think due to lack of supply.
When I moved here the first apartment I rented was $650 dollars per month and my next rental, which was a house was $550 per month.
I have to say both of them had their issues which is why I bought my own house as soon as I could.
The point is, if you want to find a decent rental for $800 dollar a month, you are going to have to get out of the big cities and find a smaller city or town to live in.
That or find a couple of roommates.
What is Rent Burdened?
Renting an expensive apartment can put you into a rent-burdened situation.
Rent burdened means that your rent takes over 30% or more of your income leaving little left over for other expenses.
Just because you are rent-burdened doesn’t mean that you can’t find a solution to afford an apartment.
You could also consider taking in a roommate, as mentioned above, to help reduce the amount of money that you spend on rent each month.
This would work out well for many people, but in some cases, sharing an apartment might cause some issues with a roommate not paying their share or causing problems in the home (i.e., stealing).
Renting a room instead of a whole apartment can help as well.
You might also enjoy:
What to Do When Your Landlord Raises the Rent
Your rent going up by more than 4% a year is typical in many areas.
Your landlord can raise the rent by any amount that they want, but if they raise it too much it could impact future tenants’ ability to pay the rent.
Which could mean the apartment complex is soon empty.
Make sure that you are aware of any changes to your rental agreement when your lease is up for renewal and read through it carefully before you sign anything.
If you think that your rent is too high, gather some information about local rental rates and compare them to what you are paying so that you know what is reasonable and fair.
Then see if your landlord will negotiate on the rent.
If You Live in Public Housing or Subsidized Housing
If you live in subsidized housing or public housing, your landlord is required to notify you each year if your rent will be going up.
Typically they will raise it no more than 4% a year, but sometimes it could be higher if costs go up in the area.
Contact Your Local Housing Authority
If you feel like your rent is too high, bring your concerns to the local housing authority who can investigate and make sure that you are receiving a fair deal.
They can also tell you what other landlords are charging for similar properties.
Where Do I Apply for Section 8 Housing?
To apply for section 8 housing you must first contact your local Public Housing Agency.
In most cases, they will require that you complete your income and asset documentation prior to approving you for the program.
The number of landlords who accept the program has dropped substantially in the past few years, and I believe many landlords will not even submit an application for approval.
It means that there simply may not be enough landlords willing to apply or participate in the program.
How Much Rent Will I Have to Pay if I Have a Section 8 Voucher?
Your rent is determined by the county housing authority based on HUD’s Fair Market Rent guidelines, which are updated annually.
Typically, the maximum rental payment for a unit is 30% of your household income.
How much you pay is based on the amount of money your family makes.
The county calculates a monthly amount called a contribution standard that represents what they believe an average household pays.
If the rent for your unit is affordable to you, then you pay that amount and your Section 8 voucher covers any difference between what you pay and what the landlord charges.
Can I Choose an Apartment With Rent Higher Than the Fair Market Rent Established by HUD?
If you are renting from a private landlord, then typically you have to pay the Fair Market Rent, but there are exceptions.
If the apartment has a higher fair market rent, then you’ll have to pay the additional amount.
How Much Rent Can I Afford on $2,000 a Month Salary?
If you use the 30 percent rule, you can afford to pay $600 dollars a month for your rent.
You might also enjoy:
To Sum it All Up:
In most parts of the country, $800 dollars is not a lot of money for rent. In fact, in many areas, it is super low. You can find apartments to rent in that range, but you’ll need to live away from the coasts and out of the big cities.