Image courtesy of Flickr, vikwaters
Every year, thousands of people flock to Manhattan to pursue new careers or fulfill their dreams, however, once they get there, they realize it isn't all rainbows and sunshine.
Living in New York City is a unique experience in any borough, however, Manhattan is so central to the New York lifestyle and culture that locals refer to it simply as the ''the city.''
Every year, thousands of people flock to Manhattan to pursue new careers or fulfill their dreams, however, once they get there, they realize it isn't all rainbows and sunshine. Relocating to ''the city'' is more challenging than your average move. If you've never lived in Manhattan before, we reveal the truth about what it's like living in this city.
Ranked as the most expensive city, in order to live in Manhattan, you're going to need some serious dough. Depending on what city you are moving from, you'll really need to reevaluate the way that you manage your money.
Even before a NYC resident's paycheck even hits their bank account, they are going to be shelling out some of the highest income taxes in the country, along with prices of every-day products that are up to twice the national averages. In fact, New York City is one of the few cities in the country have their own income tax.
Because of the high cost of living, it's not unusual for roommates to pack into tiny over crowded apartments, survive on ramen noodles for the weekend, or forgo their social lives. With $15 burgers and $200 a month for a gym membership, life's necessities can quickly add up when living in Manhattan.
Renting in Manhattan
The high cost of living associated with living in Manhattan steams from the expensive housing market. According to Nerd Wallet, renting a median 2 bedroom apartment will cost you $3,883 per month, which is roughly equal to the income that most people make in one month.
The US Census defines an affordable rent to income ratio as 30 percent or lower. With this rule in mind, renters should have 70 percent of their income left over each month to put towards savings and other costs such as food, clothing, and transportation. However, StreetEasy's annual New York City Rent Affordability Report found that the typical New York City household is expected to spend a whopping two-thirds of its annual income on market-rate rent this year, leaving very little left over for anything else.
There are a few things that have contributed to the crazy high rent in Manhattan, most notably the limited supply of rentals and stagnating wages. If you are considering moving to the big apple, it's important to make sure that you manage your budget effectively to account for enormously high rent costs.
If you think it might be better to buy a home than to rent, think again. Purchasing a median home (3BR, 2BA) will run you over $1.3 million. If you are looking to purchase an affordable property in New York City, you'll have to look elsewhere.
In addition you'll have to be ready for the high property taxes. The rate is usually between 10 to 17 percent, but will change slightly every year. With housing prices so exorbitant, only a small percentage of people can actually achieve home ownership in Manhattan. For most, it is simply a pipe dream.
Even though Manhattan is made up mostly of renters, StreetEasy calculated the tipping point where the cost of renting outweighs the cost of buying. They found that someone would have to live in Manhattan for over 7 years to make buying a home worth it.
To put this analysis into perspective, Zillow's breakeven report explains that the average breakeven point in the US was 1.9 years, significantly less than the time it would take to live in Manhattan. So, if you plan on purchasing property in Manhattan, it's wise to take a step back and think of where you will be in 10 years. Will you be at the same job? Need more space? These are important considerations to determining if buying a home is the right investment for you.
Most Manhattan residents don't have cars, so this factor alone is a big cost saver. No more car insurance, repairs, parking, or gas to worry about. However, if you do move to New York, it's important to realize that you'll be facing higher insurance rates than other cities, in addition to the exorbitant cost of parking. In fact, auto insurance costs in NYC's ''general vicinity can run up to $4,093 a year - 170% higher, and 2.7x the Empire State average.''
Surprisingly, out of the five boroughs in New York City, the average cost for car insurance in Manhattan is $3,271 - probably the only time Manhattan has been identified as the cheapest of all five boroughs. The majority of Manhattan residents choose to utilize public transportation and taxis, while only 12% of the population opts to commute by car.
If you own a car, don't forget about working parking costs into your budget. New York City is widely recognized as the costliest place to park in USA . In fact, Colliers International's annual survey of parking rates in North American found that ''Midtown and downtown Manhattan are the two most expensive places in the USA to park, with median monthly rates at $541 and $533, respectively.'' Opting to forego an automobile may be a little less expensive, however, you'll still need to work the transportation costs into your budget. An unlimited monthly subway pass will run you $116.50, while the cost of public transportation in Manhattan is 75% higher than the national average.
It should come as no surprise that Manhattan residents end up paying significantly more than the average American when it comes to paying for food and entertainment.
According to the Council for Community and Economic Research, a trip to the grocery store will cost you between 28 and 39 percent more than the national average. And, going out to eat is just as expensive. For example, a meal for two at a moderately priced restaurant will rarely cost under $75, which is almost 60 percent higher than the national average. If you're on a budget, you may want to opt for eating at one of the city's many food truck vendors.
Along with paying more for food and going out to eat, you are likely to find that the cost of entertainment is much higher too (not that you have much disposable income after rent and transportation costs). A movie ticket in NYC runs on average for $14, much more than the national average price is $10. A round of bowling is twice as expensive comparatively in the country. Instead, you may want to opt for a free concert in Central Park.
If you are considering moving to Manhattan, it is important to realize that you're going to need to make significant changes not only to your budget, but your lifestyle, too.
Many New Yorkers are living in tiny spaces, with no dishwasher or elevator. They have to cut back on their entertainment expenses in order to make ends meet. Most have no green space within reach. So, if you love your large, amenity-packed apartment, it's important to think long and hard before moving to Manhattan.
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