What maximum percent of my income should go on rent?

Steveire

Hello,

After 7 years in Berlin, I'm investigating what it takes to return to Ireland. Here I pay e600 a month for about 60 square meters (2 rooms plus kitchen) on my own.

There is a rule of thumb here that you shouldn't spend more than 1 third of your income on accommodation. I'd like to compute how much of a salary I would need in Ireland to rent a place on my own of about the same size. Do people use a similar rule of thumb there, or do you generally pay more on rent?

I looked on daft at 1+ bedroom places and there seems to be options in the range of e1000 to e1200 per month in Dublin, with some compromises on location. Is that typical for that size of place in Dublin these days? I'd also move elsewhere in Ireland, but Dublin seems a good starting point.

athtrasna

Ideally it should be no more than a third but some people are paying 60% plus given the crazy rental rates in Dublin.

MarkAnthony

I'd say the minimum is about €1000 a month for a one bed these days. You might see something cheaper on the NCR (North Circular Road) oyu'd need to judge whether that's suitable for you. A wage of 36K gross shouldn't be too hard to achieve in Dublin so would satisfy the 1/3 rule. I'd say for most people though singletons that aren't on at least 35K are probably sharing, I know I would be!

Steveire

Hmm, you said gross, and I guess (? I don't know what taxes and hidden taxes are like in Ireland) about 50% of that is money I'll never see, so take home salary of 18K, which is 1500 a month, right? What am I missing here? Wouldn't a salary in the ballpark of 70K be needed to satisfy the 1/3 after tax guideline for a 1000 per month place?

mrcheez

Steveire wrote: »

Hmm, you said gross, and I guess (? I don't know what taxes and hidden taxes are like in Ireland) about 50% of that is money I'll never see, so take home salary of 18K, which is 1500 a month, right? What am I missing here? Wouldn't a salary in the ballpark of 70K be needed to satisfy the 1/3 after tax guideline for a 1000 per month place?

nah about €50K to get €3000/month after tax

http://download.pwc.com/ie/budget-2016/index.html

Stheno

Steveire wrote: »

Hmm, you said gross, and I guess (? I don't know what taxes and hidden taxes are like in Ireland) about 50% of that is money I'll never see, so take home salary of 18K, which is 1500 a month, right? What am I missing here? Wouldn't a salary in the ballpark of 70K be needed to satisfy the 1/3 after tax guideline for a 1000 per month place?

Check out a tax calculator to see what net pay on 36k, would be, you'd only be hitting the top rate at that. it's about 2.4k net.

http://services.deloitte.ie/tc/Results.aspx

50k would have a single person taking home 3k net per month

Steveire

50k would have a single person taking home 3k net per month

So 50K is a good guideline minimum salary to live alone in Dublin, not 36K, right?

Thanks for the info and links!

Slydice

Well. That just made for depressing readin.

mrcheez

Steveire wrote: »

So 50K is a good guideline minimum salary to live alone in Dublin, not 36K, right?

Thanks for the info and links!

I'd say €50K would be a comfortable salary, not a minimum salary. Around €35-€40K would be almost minimum where you'd probably spend what you earn, but with €50K you'd easily be able to save a fair amount every month.

Of course you can live off lower, but would probably need to budget a bit.