Los Angeles, CA now ranks as the fifth most expensive rental city in the United States according to a new rental report. The first four spots go to San Francisco, New York, San Jose, and Washington, D.C.
Most expensive US cities to rent a one bedroom home:
- San Francisco, CA – $3,400
- New York, NY – $2,870
- San Jose – $2,460
- Washington, D.C. – $2,340
- Los Angeles, CA – $2,340
- Boston, MA – $2,270
- Oakland, CA – $2,160
- Seattle, WA – $1,810
- Miami, FL – $1,750
- San Diego, – CA $1,730
Joanna Cunningham, Executive Director of the Apartment Association California Southern Cities claims the high rates are due to a lack of supply. More people are moving in to California, making it severely impacted and driving up the demand for housing. Cunningham notices that there is a shift in reasons why renters rent their homes.
“Renting has become more of a choice,” she said. “It used to just be a pass-through. Someone would get a job, move out of their parents’ house and live in an apartment for a while before buying a home. But now they are looking at the convenience and amenities of apartments. They want to be able to walk to those places they like, and you’re seeing people who are renting for a longer period of time.”
Apartment Association California Southern Cities
Millennials and baby boomers, who are primarily leading the growing rental market, are renting for a longer period of time because they love the convenience and flexibility of apartments, especially for Los Angeles rentals. They are not as concerned on the affordability due to sheer demand for housing inventory.
How Much Do I Need To Earn To Live In Los Angeles, CA?
If the average rent in Los Angeles, CA is $2,340 for a one bedroom rental home, and most landlords require a monthly income of 2.5 times the monthly rent, then prospective renters looking to rent are required to earn an average of $5,850 a month. You will need to have an annual income of $70,200 to qualify to rent a one bedroom home in Los Angeles, CA.
The actual cost spent on a rental property takes it a step further. We will need to estimate the cost of garbage, water, gas, internet, cable, and utilities, which may cost $100 a month. Parking can be $50-75 depending on the location. This is a total of $175 a month. After adding these fixed expenses to the cost to rent a home, the monthly dollar amount spent on a one bedroom rental home is $2,515, which factors out to $30,180 a year on a 12-month lease. This will be 42 percent of the renter’s monthly income spent on rent and home expenses.
How Affordable Are Rental Homes in Los Angeles, CA?
The amount of money spent on a rental property in Los Angeles, CA depends on the renter’s spending and saving preferences. Renters who are more comfortable spending income on LA rentals may enjoy the flexibility of a 1 year lease. Other Los Angeles renters who are not as interested can always find a roommate. Both options are significantly more affordable than purchasing a home and spending 20 percent of the listing price on a down payment as well as mortgage payments.
We wrote a comprehensive guide on renting vs buying a home in Los Angeles, CA that we recommend you take a look at.
Whatever your options are, always know that renting a home is a more flexible option for anyone who are not sure where they will be in the next one to four years.
Looking for a place to live in LA? Browse our available Los Angeles rentals and schedule a private showing for anytime today!