We must sound like a broken record, telling clients over and over again to put away at least 10% to 15% of their salary for retirement.
But that’s easier said than done for young workers, especially those who rent.
In South Florida’s Palm Beach, Broward and Miami-Dade counties, 36% of renters spend at least half of their before-tax income on rent and utilities, according to reporting by the South Florida Sun-Sentinel.
Industry experts say consumers should spend no more than 30 percent of their incomes on housing, says the Sun-Sentinel.
(For a modern critique of the 30% rule of thumb, see Bloomberg’s “Housing’s 30-Percent-of-Income Rule Is Nearly Useless”).
Florida’s high rents and comparatively low salaries make it one of the most unaffordable states in the nation for renters.
Several factors combine to make Florida’s rental environment so difficult for young workers:
- Florida has many service workers who earn low salaries.
- New housing caters primarily to affluent buyers, so good, affordable properties are in short supply. New construction is costly due to the high cost of buildable land.
- Many of today’s homeowners choose to rent, putting rental properties in high demand. Young professionals, in particular, like the freedom of renting so they’re not tied down to one neighborhood or city.