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Manhattan rents cross $5k threshold for first time

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Re: Manhattan rents cross $5k threshold for first time

#11

Post by jraby3 »

Victerius wrote: post #3

Averages are skewed. Still. To meet the requirement of many landlords to earn in excess of 3x rent, one would have to earn 15k a month after tax, or 180k a year after tax. To earn 180k after tax in NY, you need to earn 300k pre tax. Your Income Taxes Breakdown Tax / Marginal Tax Rate / Effective Tax Rate / 2021 Taxes* / Federal 35.00% / 25.05% / $75,152 FICA / 2.35% / 4.70% / $14,104 State / 6.85% / 6.12% / $18,356 L…

Those are mostly corporate landlords in large buildings. Many smaller landlords don’t have such stringent requirements.

Source: rented and invested in NYC apartments for more than 20 years.

Re: Manhattan rents cross $5k threshold for first time

#12

Post by JumpCrisscross »

slaw wrote: post #5

> The big picture: This points to a conundrum. The Fed is raising rates to cool inflation. But rate hikes are driving higher rents, which are fueling inflation. Why everyone and their dog says Fed is raising rates, when Fed just barely raised rates. Year over year inflation is 9.3% and Fed interest rate is only 1.5%, while it should be 2% points over inflation.

> while it should be 2% points over inflation

Do you really think we solved central banking in 1992 [1], and if only you were one of the central bank chiefs we would be fine?

[1] https://en.m.wikipedia.org/wiki/Taylor_rule

Re: Manhattan rents cross $5k threshold for first time

#14

Post by eushebdbsh »

slaw wrote: post #5

> The big picture: This points to a conundrum. The Fed is raising rates to cool inflation. But rate hikes are driving higher rents, which are fueling inflation. Why everyone and their dog says Fed is raising rates, when Fed just barely raised rates. Year over year inflation is 9.3% and Fed interest rate is only 1.5%, while it should be 2% points over inflation.

people have taken on all this cheap debt and are just realising they have to pay for it

Re: Manhattan rents cross $5k threshold for first time

#15

Post by Victerius »

sokoloff wrote: post #4
Victerius wrote: post #3

Averages are skewed. Still. To meet the requirement of many landlords to earn in excess of 3x rent, one would have to earn 15k a month after tax, or 180k a year after tax. To earn 180k after tax in NY, you need to earn 300k pre tax. Your Income Taxes Breakdown Tax / Marginal Tax Rate / Effective Tax Rate / 2021 Taxes* / Federal 35.00% / 25.05% / $75,152 FICA / 2.35% / 4.70% / $14,104 State / 6.85% / 6.12% / $18,356 L…

These ratios are generally applied against gross (pre-tax) income.

That's the point? That's what I did using a calculator: https://smartasset.com/taxes/new-york-tax-calculator

Re: Manhattan rents cross $5k threshold for first time

#16

Post by laszlojamf »

anovikov wrote: post #2

Is this an average for newly signed rent, or for the average one already paid now? If former, it looks incredibly low. I mean, this is what you pay for an above-average (but not posh) place in East Europe capitals, and for pretty much average ones in old European cities like Paris or Munich.

It's $5k a month, i.e. the same as five thousand euros a month. In rent. Now, I haven't rented in Paris, but in Munich, that would be a castle.

Re: Manhattan rents cross $5k threshold for first time

#17

Post by ctvo »

Victerius wrote: post #3

Averages are skewed. Still. To meet the requirement of many landlords to earn in excess of 3x rent, one would have to earn 15k a month after tax, or 180k a year after tax. To earn 180k after tax in NY, you need to earn 300k pre tax. Your Income Taxes Breakdown Tax / Marginal Tax Rate / Effective Tax Rate / 2021 Taxes* / Federal 35.00% / 25.05% / $75,152 FICA / 2.35% / 4.70% / $14,104 State / 6.85% / 6.12% / $18,356 L…

NYC uses much lax requirements:

Your yearly gross income (before any taxes, in aggregate, including other sources) must be greater than 40x the rent price. The example of 5k would require a gross income of 200k or higher, making it much easier to qualify for than what you're assuming. Is it a good idea to spend 5k on rent when you earn 200k is a different question.

Re: Manhattan rents cross $5k threshold for first time

#18

Post by jpdpeters »

FartyMcFarter wrote: post #7
anovikov wrote: post #2

Is this an average for newly signed rent, or for the average one already paid now? If former, it looks incredibly low. I mean, this is what you pay for an above-average (but not posh) place in East Europe capitals, and for pretty much average ones in old European cities like Paris or Munich.

What is an average place that costs $5k a month in Paris? That sounds like way too much.

That sounds waaay too expensive. GDP per capita is 39K USD and 18% of the population lives in Paris. How would that work?

Re: Manhattan rents cross $5k threshold for first time

#20

Post by throwawayiionqz »

Victerius wrote: post #3

Averages are skewed. Still. To meet the requirement of many landlords to earn in excess of 3x rent, one would have to earn 15k a month after tax, or 180k a year after tax. To earn 180k after tax in NY, you need to earn 300k pre tax. Your Income Taxes Breakdown Tax / Marginal Tax Rate / Effective Tax Rate / 2021 Taxes* / Federal 35.00% / 25.05% / $75,152 FICA / 2.35% / 4.70% / $14,104 State / 6.85% / 6.12% / $18,356 L…

Landlords in NYC require pre-tax income of 40 times the monthly rent.

For $5k monthly rent you need $200,000 pre-tax income.

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