Matt Holmes

Matt Holmes

Co-founder at CoBuy
Global explorer. Dual US/UK national. Former investment banker. Real estate enthusiast. Rock&roll lover.
Matt Holmes

Defining ‘Rent Poor’

I n an ideal world, we’d all drive Ferraris and live in our own private mansions. Down here on Earth, though, things are a bit different. We’ve got limited financial (and other) resources and we’ve got to make decisions about how to best put those resources to work.

You may go to the grocery store tonight and pick up a pack of Seattle Cider. Next time, you may see that Crispin is on sale for 25% off and choose, in that moment, to save yourself $3. Not quite as tasty, but it’s a relative value play. Now imagine Crispin was always 25% less. Would you start drinking Crispin versus Seattle Cider? Decisions, decisions.

Let’s apply the same logic to a slightly larger line item on the bank statement: housing.

Take the case of John. John is 25, makes $47k, and works in education. John spends$1,906 on rent per month to live in a decent apartment in Seattle. John is ‘Rent Poor’: he spends way too much money on rent as a proportion of his income. Of John’s salary, $10,500 goes to tax/social security. After rent, John is left with just over $1,000 a month for everything else: food, entertainment, travel, healthcare, clothing, vacations, you name it.

Unless John manages to get a substantial raise or win the lottery, John is going to have a hard time saving any money. Furthermore, assuming John’s rent stays flat for the next 5 years(highly unlikely with rents having risen 35% in Seattle over the past 5 years), John will have spent $114,360 on rent.


In the next posts, we’ll look at how CoBuy stacks up as an alternative, what is required to CoBuy, and how to determine what makes a good CoBuyer/CoBuy group. Alternatively, visit us online at GoCoBuy.com.

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