From San Francisco to Manhattan, not to mention Washington D.C., people are experiencing the rapid price jumps that come with living in a cultural and business hub in the United States. It makes sense to move to these central locations to experience all the big city has to offer, but it often comes at a cost.
The 10 Most Expensive U.S. Cities: Rental Prices for a 2-Bedroom Apartment
- San Francisco, CA: $3,500
- New York, NY: $2,750
- San Jose, CA: $2,490
- Boston, MA: $2,450
- Los Angeles, CA: $2,420
- Oakland, CA: $2,350
- Washington, DC: $2,100
- San Diego, CA: $1,950
- Seattle, WA: $1,900
- Miami, FL: $1,800
While many people find better (or much worse) deals in each of these cities, you begin to see why the possibility of purchasing a home (in the most expensive cities in the United States, you are unlikely to purchase your own house or condo for under $500,000) is remote and renting becomes the best option available. While many of these metro areas offer a wide variety of high-paying jobs that allow you to make such rent payments, it can be frustrating to see an enormous chunk of one's monthly income going straight into the landlord's hand. In metro areas like Washington D.C., it has become common to live in large homes with a variety of roommates, and in all the listed cities, people are discovering that roommates help them economize while adding to the richness of daily life.
In many of the most expensive United States cities, there is robust public transit, so many people choose not to have a personal vehicle in the center of these high-priced cities. What results is the complex calculus of how close to public transit one should live, given that prices tend to be highest at the most convenient locations. This, and many other factors, make finding a roommate or multiple roommates one of the best choices you can make in a top-10 most expensive city.
Benefits of Roommates in a Top-10 Most Expensive City
Better Location for Your Money
Usually, part of any high rent price in a city like Boston, San Jose, or Washington D.C. is going to be a convenience factor: a metro line nearby, an excellent bus route, or even walkability to sites and downtown attractions. This convenience fee is cut in half when you share your apartment rent with another person. People report that they enjoy their days more and have more free time when they have a short walk or ride on public transit rather than long, traffic-filled car rides to work. Extra time makes it easier to take time to cook for oneself, enjoy all that the big city has to offer, and practice hobbies that keep you healthy and engaged. Location may seem like it isn't worth the effort when you have to pay the entire, astronomical bill yourself, however, getting a roommate and living in a desirable location tends to be much more affordable than the most out-of-the-way apartment you could afford on your own.
It's Not What You Know, It's Who You Know
Moving to a large city can feel very anonymous; even as you get to know people in your workplace or through your hobbies and networking events, it can be hard to feel truly known or like you have a wide social circle. This is especially a problem for those who live alone: every time a person living by him or herself chooses to go out and explore the city, they must either arrange with someone else to go together or explore by themselves. Roommates make the process of getting to know other people much easier: you will have access to the social circles of your new roommate, even if you and your roommate remain casual acquaintances. As you and your roommate grow closer, you'll also have a casual buddy with whom to try new things and attend networking events: most of us like having a familiar face nearby when we are out getting to know a new scene, and your roommate can be a very welcome known quantity at events.
What's nice about getting a roommate in an expensive city is that knowing a wide circle of people can really help you access the best of the city: by definition "insider knowledge" is hard to get when you are new to a city or don't know many people. Having a wider social circle facilitated by your roommate may help you make a jump in your career due to knowing about a job opportunity or it may help you connect with someone to date via friend-of-a-friend connections. Most of us have a more satisfying life when we feel like we know who we would call for advice, recommendations, or help in a time of need, and the wider your social circles are, the more completely you can experience that satisfaction.
Savings Happen Faster, and Job Searches Have Longer Runway
Living in a large city is a bit of a gamble. For instance, you might be able to live in your small hometown and pay less than $1000 in rent, but the opportunities to move up and boost your income would be much more limited than in a technological hub like the San Francisco and Oakland areas. The gamble involves paying high rent, sometimes multiple thousands a month, but being able to grow through the ranks of some of the fastest-growing companies in the world, who pay generously to the innovators who are working for them. Of course, those early years you may feel really "cash-poor," since the leveling-up benefits take time to arrive, and rent prices are high right from the beginning.
Roommates tend to make for an amazing solution to this issue: they cut the rent down to manageable, small-city prices, but they allow you to maximize your income in a competitive marketplace. Many people find that the money they save by having roommates gives them a lot of freedom: yes, people like having money for its own sake, but here are just some of the ways people use roommate relationships to help them succeed in big, expensive cities:
- Getting multiple roommates early in one's time in a city helps you keep a longer "runway" on whatever money you are using to fund your move and your job search. For instance, many new residents in a city must take whatever job they are offered as fast as they can, but if you have roommates, your savings will last more than those first few weeks, so you can hold out for the job you know will put you on the fast-track to success.
- Similarly, if you experience job loss, your savings from having roommates can form an "emergency fund" that allows you to live between jobs without having to move out of the exciting city you've chosen for your career hub. Without roommates, high rent costs can really make it tough to sustain a lease without work.
- When you know that, in 10 or 15 years, you are interested in purchasing your own property, you can begin saving the difference between your roommate-reduced rent and your dream home's mortgage payment estimate. This choice to save will not only pad a very nice down-payment fund for you, but will help you "get used to" how the mortgage payment will feel, helping you to make a good choice about when to buy down the road.
- Your savings don't have to stop: you can keep renting and use your savings to make a great retirement account, take travel vacations to places you've always wanted to see, or invest in large expenses like furniture or vehicles.
Ultimately, don't think of roommates as purely a cost-cutting initiative: they are a chance to find the right person to spend time with while also reaching your goals over time.
Even More Savings Than Just Purely Rent Payments: Amenities and Utilities
One of the fallacies in apartment living is that two people living in the same space will create twice the utility bill; this is simply not true! For standard items, like keeping a television plugged into electricity and keeping the air a comfortable temperature, having a roommate will barely change the bill, so you each experience savings.
Another area for savings can be in the kinds of amenities you focus on acquiring: when your apartment complex has a pool, a gym, or a meeting space where you can do co-working, you generate further savings: gone is the gym bill, the co-working space bill, and the pool membership bill, as well as any gas money or public transportation you'd have spent to get there. Overall, the benefits of having roommates really speak for themselves, but the monetary savings ultimately amount to greater freedom and flexibility for your next goal, whether that is to level up to a more central apartment or to reach your down payment dreams and purchase your own spot.
Ready to learn more about the benefits of an easy, straightforward path to saving money and living in community? Contact us today!