Living in New York is costly. In fact, average New York residents start spending even before their paychecks get to the bank – they pay the highest income taxes in the US. On top of that, potential residents who want to be at the center of it all and reside in Manhattan face some of the most expensive housing in the country.
1. Renting Costs in New York
The unaffordable cost of living in New York begins with its crazy housing market. According to a 2019 Apartment List report, the median rental cost for a two-bedroom apartment in New York City (NYC) is $2,499. A one-bedroom apartment goes for $2,098 per month, while a studio costs around $1,889 per month. These rents are too much higher compared to not just the country’s median, but also most of the big cities in the world. Data from Apartment List shows that the national median rent for two bedrooms is $1,175, one-bedroom at $947, and studio apartments at $827. That’s a deviation of $1,324 for a two-bedroom, $1,151 for a one-bedroom, and $1062 for a studio apartment.
2. The Cost of Purchasing a Home in New York
Apart from the high cost of renting, buying a house in New York is also extremely costly. The National Association of Realtors’ 2020 data shows that the median price of a single-family house in the New York metro region is $440,200. Although that figure may seem encouraging, keep in mind that the metro region features not just NYC but also the neighboring areas. Purchasing at the heart of the city can be too expensive. In Manhattan, for instance, you can end up spending over $1 million for just a one-bedroom apartment.
Once you purchase a property in New York and decide to rent it out, it is wise to hire a property management company to manage it for you. The company will offer you access to a team of experts who understand the market and the best tactics to attract the right tenants to your property. They update property listings regularly, create marketing messages that resonate with desirable tenants, thoroughly screen and vet prospective tenants, and are hands-on in resolving complaints and responding to maintenance requests. Cumulatively, these services save you money by lowering vacancies and increasing your tenant retention rate so your investment property remains occupied by the best tenants all the time. An NYC property management company will take care of all the complex legal issues and costs associated with owning a residential or commercial property.
3. The Cost of Utilities and Transportation in New York
New York experiences a real four-season climate. Summer tends to be severely hot and humid. Winter is extremely chilly, while fall is popular worldwide for stunning foliage and friendly temperatures. In spring, temperatures are comfortable and rain is abundant. Due to the variable climate, utility expenses in New York vary based on the season. As of December 2020, the average utility cost for a 915 sq. ft. house was $146.26 a month. That covers electricity, heating, water, and garbage. The average cost of the internet is $62.77 a month. Apart from housing, transportation is another top expense for most New Yorkers. That includes the cost of purchasing, fueling, servicing, insuring, and parking the car for vehicle owners. Public transit users will have to pay for a transit pass, and probably parking, if they’ll have to drive to take the bus or train. Parking is a major expense for New Yorkers who have personal cars. In NYC, for instance, expect to part with roughly $600 per month to park.
4. The Cost of Food and Entertainment in New York
The price of food in New York ranges from average to a little bit above average. Because of mass-production and ample supply, items like bread, canned products, and cereals are inexpensive in the city. However, the prices of fresh foods like milk, beef, and poultry are a bit high in NYC. The price of a pound of chicken fillets and a gallon of milk was $6.16 and $4.50 respectively as of December 2020. Once you have paid for housing, utilities, transportation, and food, then you may consider spending something small to entertain yourself. If you’re a movie enthusiast, you’ll need to part with $15.25 to watch a movie in Midtown. If you’re a baseball fan, you’ll pay $27.60 and 47.62 for the Mets and Yankees games respectively.
Housing and transportation are two main factors that make living in New York City overly expensive than other large cities in the US and the world at large. A great way to minimize housing costs is to rent or buy a house outside the city center. Daily commuters can minimize their transportation costs by buying an unlimited monthly transit pass for $127. Car owners can also reduce their transportation expenses by obtaining the right coverage. Buying in bulk and eating at home most of the time is the best strategy for lowering food costs.