Another Reason We're Glad We Left Manhattan
According to Forbes, $500,000 a year after tax is required to support an “affluent lifestyle” for a family of four in Manhattan. On the checklist of requirements: 2 cars, 2 private school tuitions, primary home cost of $3.9 million, second home cost of $1.9 million, and three vacations a year. Not everyone agrees that half…
According to Forbes, $500,000 a year after tax is required to support an “affluent lifestyle” for a family of four in Manhattan. On the checklist of requirements: 2 cars, 2 private school tuitions, primary home cost of $3.9 million, second home cost of $1.9 million, and three vacations a year. Not everyone agrees that half a million dollars after tax is enough to qualify for affluence. “I think $500,000 will give you a comfortable lifestyle, not an affluent one,” said Dolly Lenz, a top real-estate broker with Prudential Douglas Elliman. “To live affluently, not extravagantly, you’d have to make at least $2.5 million a year.”
But how about Brooklyn? What does a family of four who is just buying a house now–say for $1.5 million–need to be comfortable (not affluent)? On a $1.2 million mortgage, call it $70K or so after tax for mortgage, taxes, insurance alone. Public versus private school decision is probably the next biggest factor–chalk up $30K for the latter if so inclined. So we’re up to $100K before you eat your first meal or make a lease payment on your car (we seem to get by with one car just fine). Granted a lot of people find ways to defray these costs considerably, most obviously by renting out a portion of their house as we plan to do or sending their kids to public school if they’re in a decent district. But still, it’s a little scary how fast the number can creep up and how quickly one can become a prisoner of one’s own mortgage, isn’t it?
Getting By On 500G [NY Post]
We wouldn’t belittle Cash Machine’s problem. The “middle” often is caught between a rock and a hard place re: financial aid. Just enough $ to not qualify but not enough so that it’s not a serious burden. Everyone’s problems are relative to their circumstances. (God, it’s starting to feel like we’re runnning a group therapy class around here!)
sounds like his kids didn’t go to SUNY either.
Big Bubba is it? I was responding to the poster re: cash machines and education. It’s good to be prepared and know ahead of time what to expect and what to plan for. My younger neighbors tell me $600/month is what they were told to save for their 1yo’s future college tuition.
I’m glad you informed us of your financial aid and debt tho. That added a lot to the discussion.
Oh come on now. You don’t really expect us to feel sorry for you and your indebted college kids do you? Sure, I qual’d for financial aid, but also still came out of college with a mountain of debt – fin’l aid really doesn’t cover everything. And, at least your kids got a university education, probably in no small part with the assistance of the rental income from your cash machine.
I think this article also talks about people who got on the boat, I missed that boat and I still think about the house that got away.
My husband and I or at the time my fiancé and I could of bought a 2 family house for just under 500K about 4 1/2 years ago with help from my family. Now this house could be resold for about $1.1, $1.2m.
Also the rental income over these past years would certainly increase, allowing us to live more of that comfortable life.
Don’t get me wrong we rent and still live a nice comfortable life we make a nice income combined, but we don’t own a home, and in less then 5 years prices of home have nearly double and in some area’s more then doubled in others. So it’s very hard for people like us to even buy our first home even w/ a good income. We save and we save but we and I sure many other people just can’t catch up to the market. Not only do you need that large down payment but you need the money to maintain and pay those large mortgage payments ever month. I think it’s getting very hard for younger people.
FYI my cash machine in Park Slope meant that none of my 3 kids qualified for any financial aid at university. I make under 100k and 12 years of college at full price is tough. And saddling my children with 100k worth of debt (min.) at 21yo is a tough choice too.
Yes, that number includes an assumption of about $2,100 of rental income.
To echo what b-stoner is saying, I compute my after-tax, after-rental-income cost of housing (mortgage, taxes, insurance less rental) to be approximately $2200/month. That does not, however, include utilities or upkeep. I bought the house about 3 years ago. The biggest hurdle now (as was the case then) is the down payment. Today, in order to even come close to my “deal”, you’d need to come up with over $1MM down payment, whereas, back then my all-in cash investment was around $650K (around $200K down + $450K renovation).
One of the great benefits of rental income (aside from the obvious) is that it is virtually tax-free income (which really matters when you’re in a high tax-bracket) given the LL tax deductions for depreciation, etc.
The great unspoken truth is the fact that so many regular, middle class people in nabes like Park Slope, who bought their buildings many years ago are not only millionaires on paper, they are reaping the benefits of having what amounts to a cash machine – due to the increased market rents they can command. The same lifestyle that I have to give blood everyday to afford, they have attained with normal jobs. They’re home for dinner and can afford the house in the Hamptons too (just not on Georgica Pond).
I’m not jealous as I really have little to complain about. Okay I’m just a little jealous. But, hey, that’s the way it is. Maybe someday, I’ll benefit from the same scenario.
maybe you should contact the PTA at PS 321 — seems like the local community worked really hard to make that school what it is today