Ask Money

How much rent is reasonable

Chris Farrell Apr 18, 2012

Question: I just landed a job in Los Angeles and will be looking to rent starting in July. How much of my income is wise to spend on rent? Am I allowed to increase that number for a place like L.A., where rent is so expensive? Also, I only plan to be there for a year or so, so is it unreasonable for me to spend an extra couple hundred a month to live on the beach and take advantage of being single with my first job out of college? Sam, Athens, GA

Answer: Congratulations on the job. A common standard of affordability is that rent and utility costs combined should take less than 30 percent of household income. Above that figure, renter cost burdens are considered moderate (between 30 and 50 percent of income). A severe rental and utility payment burden is more than 50 percent of income.

That said, I don’t think it’s unreasonable to want to live near the beach and enjoy southern California.You’re young and it would be fun. The trick is not to take on debt to live by the beach. So what if rent and utilities absorb more of your income than if you lived farther inland, as long as you don’t take on credit card debt to accomplish it? You’ll just have to spend less on other stuff to pay the rent and not take on debt. There’s nothing wrong or unreasonable about that. Have fun.

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