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Stupid renter eventually buys.
Owners would be living rent-free at that age.
Instead, she subjects herself to $60,000 a year in rent.
LOL, nice "retirement" sucker.
Joan Riegel, a 69-year-old educator, started looking to buy earlier this year, when the rent on her 1,000-square-foot Upper West Side rental climbed past $5,000 a month — an increase of 25 percent. This month she moved into a $675,000 co-op in the Gramercy Park area, trimming her monthly housing cost nearly in half, to about $2,600 a month including maintenance. While her new apartment is smaller, she said, “I’m going to have so much more money.”
That's great ... she depleted her retirement savings in order to buy a smaller place.
And now she has much less flexibility when she decides to move for age-related reasons. And she'll incur ginormous transaction costs to do so, and probably sell at a substantial loss.
Correct, she is a ginormous fool. This is a case of "too little, too late" She should have bought something back in the 1970s or 1980s, like other people her age. She'd be sitting on millions and be living rent free. A true idiot renter who had made things even worse. At the least, she should have moved to a $1500 studio.
Dealboy, how old are you? What do you live in -- a 350 sq ft coop studio in Midtown East? When did you buy?
Dumb and dumber
Are you saying this was a wise purchase on her part? Boy, you're a fool then.
I'm just amazed that Ms. Riegel could get the mortgage that she got. She's 69 (she doesn't *look* 69!) and is already retired, so she's living off Social Security and her own savings.
We don't know how much the maintenance on her 700-sf apartment is, but let's estimate it at $1000. Plugging all the above numbers into a mortgage calculator makes it look like she got a 30-year mortgage. Is is normal to issue a mortgage at such a good rate to someone who will theoretically be *one year short of a century* when it's scheduled to be paid off?
Alan, I got the opposite impression: this is her retirement home and she won't be moving for age-related reasons. What better place to retire than the city? The suburbs are designed for automobile drivers, so those are out, and presumably all her friends are in the city too. But I agree with Dealboy that she should have purchased much, much sooner, and this current purchase should have been a lot smaller. (700 SF for one person? Maybe she's considering having a relative move in with her.)
Still, I wonder how the loan officer got that one past the boss. She'll be 99 when her last payment is due!
Her transaction details are in the sidebar.
Eventually she found a mortgage broker who ran her excellent credit rating and landed her a mortgage for 3.5 percent with 50 percent down.
COST TO RENT $5,395 a month, for a 1,000-square-foot one-bedroom with a balcony on the Upper West Side.
COST TO BUY $2,600 a month, including maintenance, for a 700-square-foot one-bedroom near Gramercy Park.
DOWN PAYMENT $337,500
At least she got out of that idiotic $5000/mo rental, and has cut her costs by 50%. With a pension and SSI, she should be fine. She doesn't need the 50% downpayment which was earning 0% interest.
It appears she's single so as long as her her social security, pension and SSI covers the costs she's fine. Even if the mortgage is 30 years what's the big deal. She passes away before the mortgage ends and the estate sells the apt, settles with bank and her heirs get the rest. She meanwhile will live comfortably till the end or if she has to move, she sells the apartment and uses the proceeds toward a nursing home.
>She doesn't need the 50% downpayment which was earning 0% interest.
Could have bought Sprint.
"She should have bought something back in the 1970s or 1980s, like other people her age." She lived in the burbs for most of her adult life, where presumably she did just that.
But now it's now. She chooses to rent in the City. Does she take the relatively small hit of rent increases, or does she wait until the bubble bursts and buy something when the rent ratio favors buying?
But perhaps her pension (and its COLA) is sufficient to protect her from her mistake. And she can paint her bidet pistachio, and wallpaper her boudoir with Sprint stock certificates, as huntersburg always suggests.
Yes let's mimic a single 70yo who can barely afford a $700k on SS. Iz that your idol dealturd glassblowing major model/waitress/weekend can driver?
Now if she bought sprint at $2.4 (about the time she started this fiasco of buying into a re bubble) she's have $1.4mm in her piggy bank.
But then again she wasn't on SE to learn about sprint stock. But you were dealturd.
Doesn't need $500k.
That's quite a statement. Spoken like a true re Borker. Congrats dealturd. It'll only be a short while bf you start spewing financial stupidity like take the 15yr versus 30yr. Now is a great time to buy! Or my favorite, 'it's better than facebook!'
This conversation is unfortunate.
This is a 69 year old woman, who lost her husband 6 years ago. My bet is she lived in the suburbs and had a life there, and on her husband's passing she realized that she needed to be in NYC to be around more people and more activities as she ages, and possibly to be near other relatives. So her suburban house gets sold, she moves into NYC, prices here are exorbitant, there are plenty of rental options that don't involve so much commitment, and she wants to test areas out. She's also moving from a large house into a 1000 sq ft. apartment and downsizing, eliminating belongings that she's collected for many years, she wants a 2nd bedroom for visitors from back in the suburbs. Over time, costs rise, landlord jacks up rent 25%, apartments are still expensive but she sees them down 25% or so from a few years ago, she realizes she can do with incrementally less space (doesn't need that 2nd bedroom) and belongings (doesn't need that fancy dining set), and she's got some money left over earning zero but she can't put it at risk in the stock market at her age. So she puts down a downpayment, downsizes, and cuts her monthly outlay. She's happy. Is it perfect? Could she have done something differently before? Will she be faced with choices in the future that are also not perfect?
I'm not sure how any of the circumstances or choices this woman's been involved with can be subject to criticism by anyone here.
Flmaozz. She got $500k and spent $60k in a year's rent..... I guess compared to that buying facebook at $38 is genius!.
She's living off her pension and SSI.
That may put her at the $100k income mark.
So, parking $250k in some apt is not a big deal.
It's better than renting for $5000/mo.
To her credit, she's cut her monthly bill in half.
I guess she is not a stupid broke renter b/c that $600k nestegg must have come from the proceeds of her mortgage free suburban house .
I don't see how this was a stupid move. She wants to live in NYC, renting was costing her more. She obviously has the money to do this. She met the financial requirements to not only get a mortgage but one at an excellent rate. She could conceivably live another 20 years, Maybe more, and if she needs to move into assisted living if she's no longer to live on her own, she'll sell the place.
With more Americans renting than buying these days, expect rents to go up more. The decision to rent can be a good one in the short term, but rarely in the long term.
By tying up her $337,000, she is saving about $30,000 a year in expenses. ($5000 vs. $2600) Yes, there are other costs to ownership, and it's a smaller place, but this is how people with money make their money work for them. A dumb renter would simply have no money, and have to stick with the $5000/month option.
This lady sold her place at the top of the bubble in 2006. You really think she is a sucker?
How about w67th here? He is a renter. He put his money to work in stocks. In the last 4 months alone, he's made enough to buy your apartment twice over. Is he a sucker too?
w67 - what should I do with 80K? (Didn't realize we could get free financial advice on the site).
Dealboy, you do realize that she was never paying $5000, right? She left because the LL tried jacking the rent 25%. She's in 30A in her new building, with monthlies of $1040. Apt 17A rented for $2800.
It's not mutually exclusive.
Renting is more expensive than owning.
So, had w67th been an owner,
he'd have even MORE money to invest in S,
and he'd have an extra million bucks in capital gains,
and he'd be living for free this whole time in retirement.
Since owning is cheaper than sucker renting,
it's is a case where you can have your cake and eat it to.
Unless you bought in 3 specific years out of the last 150 years.
>How about w67th here? He is a renter. He put his money to work in stocks. In the last 4 months alone, he's made enough to buy your apartment twice over. Is he a sucker too?
Yes, brilliant advice. This woman should have been buying Sprint. It's so easy. Only $10 to trade.
Flmaozzz. Dealturd. Let me spk for w67. If tulips had a great run for 147 yrs and the last 3 not so good but bc of the tulip consortium the price leveled out at peak tulip prices... Would w67 or even w69 buy more tulips?
And FYI. It is precisely bc I can see that the nyc re is till a bubble and w67 does not have a pig of a mortgage to feed that I can go into sprint!
And Ottawa. Buy sprint. Gave me 110% or $1mm return in 4 months. Apple gave out 67% since jan 1. Compared to facebook I'm up 200%!!!!!!
And for my favorite ss Chking CPI bitching bubble pumping Riversider. Renters will always be on the wrong side of the re bubble trade. Just look at w67..... Just a financially illiterate foreigner throwing rent dollar billz out the window whilst W67 could be investing in cream cheese futures!!!'
Why isn't dumb gray?
Dumb boy gray?
"So, had w67th been an owner,
he'd have even MORE money to invest in S,
and he'd have an extra million bucks in capital gains,
and he'd be living for free this whole time in retirement."
How many million bucks in capital gains are you sitting on yourself?
>How many million bucks in capital gains are you sitting on yourself?
Typical criminal scumbag attitude. Only thing that matters is how much money you've made yourself. If you scammed a 69 year old woman into unsuitably investing her retirement savings and living expenses into Sprint, that doesn't matter as long as you made money yourself.
Oh but Sprint was a good trade in hindsight, so it's ok.
as long as you are measuring a point since June 2011.
I'm totally not sure there's any logic involved in your recent offerings on this post, hb.
We all know no re broker ever said 'this is the best investment'. Oh wait a minute wtf is dealboy saying?
aboutready, you are holding your logic skills above mine?
>We all know no re broker ever said 'this is the best investment'. Oh wait a minute wtf is dealboy saying?
What do you tell this 69 year old woman to do today?
Keep in mind her need for security is just as important as your need to prove yourself.
inonada, I paid off my mortgage. I will now basically living for free for many decades. Before the mortgage was paid off, I was paying a fraction of market rental rate for many years. Plus, I'm up about 50% still. WIN.
Who said anything about skills? I was merely talking about this thread. When I choose to utilize them my reasoning skills, including logic, are superb.
Deal boy, it's WINNING. You sound like such a tool.
Dealboy, you bought in 2003. You're not up 50%, you said an apt similar to yours was only listed at 45% higher. Let's say that price is inflated by only 5%, pushes you down to to 37%. Sell and deal with transaction costs, pushes you down to 27%. You have no mortgage, you paid it all off. Stocks are up 100% since 2003. Don't like stocks? Too risky? Bonds are up 100% since 2003. LOSE.
>> I will now basically living for free for many decades.
Your maintenance is $600 a month. That means you live in a 350-400 sq ft studio (Midtown East from what I've gathered). Is it really your plan to live there for many decades?
You have no mortgage. You know how to WIN. Why don't you take your $300K and put it towards more WINNING? Buy yourself a place for $1.2M, you've got the 25% downpayment. Stretch your legs a little. Won't cost you a dime, you'll be WINNING even bigger.
The monthly mtc/cc/taxes on a property sufficiently large to accommodate most families is, without any mortgage, larger than rent for a very nice home in many nice places in this country. And in other countries. Your reasoning, deal boy, is.superficial at best.
>Deal boy, it's WINNING. You sound like such a tool.
>Your reasoning, deal boy, is.superficial at best.
Maybe that's the aroma from Tacoma still stuck in your head.
>You have no mortgage, you paid it all off. Stocks are up 100% since 2003. Don't like stocks? Too risky? Bonds are up 100% since 2003. LOSE.
Stocks are also up 100% since 2009. So 2003-2009, what?
Sprint is also up 100% in the past 2 months.
And Red just hit again on the Roulette wheel.
This woman is 69 years old.
69 and trying to live in the most expensive city in the world with $600k in chicken scratch.... Poor planner?
And btw the only reason broke re Borker flunkiez like youz get to live in nyc (dealturd and cuntersburg) iz bc ya bought Pre bubble and a $200k 5th fl mid town east jumbo studio walkup was all you were striving for in 2001. The 2001 to 2007 re bubble was the most rigged roulette table since the tulips.
Dealturd and cuntersburg think ya can jawbone a fix for the re roulette table.... But w67 and inonada's roulette is 'too risky!' a 69yo is too old to get it. Grandma touch the screen! The physical qwerty is dead, your old dog is dead it ain't coming back, your husband is dead, and stop betting on real estate again! Fking get used to it.
>69 and trying to live in the most expensive city in the world with $600k in chicken scratch.... Poor planner?
As if she immigrated from Pakistan. She's a local.
>And btw the only reason broke re Borker flunkiez like youz
Fail. I'm not a real estate broker.
>iz bc ya bought Pre bubble and a $200k 5th fl mid town east jumbo studio walkup was all you were striving for in 2001.
>The 2001 to 2007 re bubble was the most rigged roulette table since the tulips.
But the equity market ...
>Dealturd and cuntersburg think ya can jawbone a fix for the re roulette table.... But w67 and inonada's roulette is 'too risky!' a 69yo is too old to get it. Grandma touch the screen! The physical qwerty is dead, your old dog is dead it ain't coming back, your husband is dead, and stop betting on real estate again! Fking get used to it.
The tax cheater, shady businessman who skipped out on rent on one of his prior apartments, is a paragon of morality on these message boards.
G-d W67thstreet...you just sound like the sweetest person ever!
you'll never find a nicer guy.
not in columbia county.
Yo cc help me spend my $1mm. :)
W67 never does business in the shade. W67 prefers buying a nice lunch at four seasons for my peeps after a deal closing. W67 did not kill your dog. W67 did not kill your husband. W67 did not kill RIMM. W67 give you goodum financial advice, buy sprint. W67 have $2mm in sprint. W67 not trade wampum for re. W67 many barking dog warning about nyc re bubble. W67 tax rate 39% over last decade not likum 13% tax rate for wanna be leader talking about cutting food stamp for ill planning 69yo who want caviar living.
W67 talk like Elmo. W67 love hiz 6yo and 8yo. W67 don't let his kidz take more than their fair share. W67 teach kid no gamble, ESP with other ppl wampum. W67 teach kid to love pets. W67 had ocean funeral for daughter beta fish that died 3 wks again. W67 built little fish coffin. W67 gonna die someday. W67 kids gonna die someday. W67 sad.
But w67 have good time spending $1mm in sprint gain whilst w67 wait for $500psf in nyc. W67 have nice smile.
>W67 give you goodum financial advice, buy sprint.
Partial list of people who did not buy Sprint:
>W67 love hiz 6yo and 8yo.
>W67 teach kid to love pets. W67 had ocean funeral for daughter beta fish that died 3 wks again. W67 built little fish coffin.
>For my son's 15th birthday gift I plan on giving him a diaper w/ a snickers bar in it :)
Hunterburg. Lonely. Hunterburg sad. Hunterburg need good large dildo. Hunterburg need to rekindle little 'friend'. Friend lonely. Not touched in long time. Go Hunterburg. Go touch 'friend'. No more real estate talk. To touch friend. Send w67 address. W67 send large batteries to Hunterburg. Gift. No shady business.
Send it to the postmaster in Columbia County.
The address on this 69 year-old's purchase record? 275 CPW #9F, last listed in 2010 as a 1400 sf 2BR/2BA for $5600.
I wonder why the article says she was living in a UWS 1BR, having moved from a CPW 2BR, but then she has the above address.
Hunterburg still angry? Ok. Two dildo then.
Obviously a conspiracy.
Maybe inonada send battery gift also to huntersburg, also?
Yes, the more batteries the better. Also a Snickers bar.
oh that hunters burg.
what a lying, cheating, fuckhead.
oh hunters burg
Showtunes, my favorite.
I'll send rechargeable batteries.
Eco friendly dildos, nice.
Don't Buy: These 7 Cities Are Renters' Markets
5. New York, New York
Breakeven horizon: 5.1 years
Price-to-rent ratio: 12.8
Median list price: $389,000
Median rent price: $2,600
Forgot the link,
streeteasier, you agree with Brooks2?
I have literally recouped 100% of the cost of my apartment in the 9 years of paying below market cost to own than to rent (owning is much cheaper than renting). Even if the apartment was today valued at $0, I am still ahead. Wrap your mind around that. The fact that it's worth more than I paid is just gravy. And every single month that gap grows.
But what about the tulip bubble?
> Now is a great time to buy! Or my favorite, 'it's better than facebook!'
you beat me to it! how many millions would she have if she had bought puts on Facebook with that $500k? dealboy, do the math and let us know how smart is to buy or be priced forever. :-)
BTW i'm shocked people don't comment on the couple that rented a 1BD (having a kid!? WTF??) in the UWS and totally overpaid for a 2 BD in Harlem (and not in a good location btw). we couldn't avoid laughing at them with hubby when the morons rationalized overpaying (they paid $760k, the developer listed it at $699k) by saying "a landlord listed a 2BD in front of our tiny 1BD in the UWS for $7k"... still laughing!
how can middle class college graduates be so financially illiterate??? don't they teach math to radiologists? $5k carrying costs for a 2BD in Harlem above 125th? really!?!? 3% down, FHA limit hit till the last cent ($729,750 just before it reset down to $625k, only $30k down). these morons are already underwater.
i could only imagine dealboy doing something THIS STUPID! :-)
How can a writer for the NY Times RE section be so financially illiterate?
Someone that calls himself "dealboy" is easy to understand.
Huntersburg go you agree with caonima?
"the couple that rented a 1BD (having a kid!? WTF??)"
In their defense, they had 700 square feet to work with in their old place. And the kid is only five.
They certainly overpaid for their Harlem place though. And the taxes are going to be a killer when the abatement runs out, which will ruin their potential selling price.
I think they should have looked for a 700-SF place with costs similar to their rental, but with a layout that works better for a growing child. They must be gambling on Harlem gentrifying by the time they're ready to sell.
>Huntersburg go you agree with caonima?
I didn't see any posts on this thread from caonima. Should I be looking for posts under a different name, Brooks2?
You tell me. You seem to have it all figured out.
How about str33teasier?
There couldn't be a more misleading article. All they talk about is comparing the monthlies - nothing about how they are understated due to the tax abatement, the incomparability of moving to Harlem vs UWS and to new construction, and the fact they are risking their entire equity playing the FHA game and in a neighborhood that goes down the most in a downturn.
Stupid, stupid Times journalists, they don't know nothing about when to buy Sprint instead of AT&T. Nothing.
(for inododo, now turn sarcasm back off)
Where do you see they paid $760k? Article says they paid $699k.
"He and his wife are not only paying the same or less than if they had rented a similar property, he said,"
What's so bad about the deal? It said it costs less than renting. And when they move, college kids will pay the mortgage. When they're age 60, they'll own a $60k a year income producing property free and clear. There's your retirement right there. Sure beats pissing $5000 in rent for the next 50 years.
>FHA limit hit till the last cent ($729,750 just before it reset down to $625k, only $30k down). these morons are already underwater
Can you explain this comment? The article mentioned none of this.
I also see nothing about a tax abatement. Are we reading the same article?
>Sure beats pissing $5000 in rent for the next 50 years.
Did you account for investing the money in Sprint? Of course, if you invested money in Sprint except in the past 6 months, you would have lost money, but you were probably smart enough to have invested money in another single stock that did equally well. Right, because each month w67thstreet since December 2008 (w67thstreet, Member since: Dec 2008), w67thstreet has given us his stock pick or choice of yacht or porsche.
When they're age 60, they'll have completely renovated their apartment twice ... and paid mightily to do so each time.
Wow, landlords must be dumb.
Wonder if she and her husband owned the house they lived in before she started renting? Is she a first time buyer?
"I have literally recouped 100% of the cost of my apartment in the 9 years of paying below market cost to own than to rent (owning is much cheaper than renting). Even if the apartment was today valued at $0, I am still ahead. Wrap your mind around that."
OK, let me try. You paid $220K for your 350 sq ft Midtown East studio back in 2003. You've paid back that principal plus $50K in interest (5% over an average of 4.5 years). Your monthlies were $600, so $65K there. So a total of $335K. Works out to $3100 a month.
I'm having trouble wrapping my mind around how delusional you must be if you think it'd rent for above $3100. Care to explain?
Now for a lot of people, tiny studios in 3rd-tier locations are about as relevant to their housing needs as suburban Kansas. But let's take your example at face value, because if we did it with an "average" Manhatta apt, it'd be even more ridiculous.
"I also see nothing about a tax abatement. Are we reading the same article?"
Dealboy, towards the end of the article there's a link to a 4-part detailed writeup on each of the buyers. The Harlem couple and their kid are on page 2, and it mentions that their place has a tax abatement with 20 years left on it: http://www.nytimes.com/interactive/2012/08/19/realestate/20120819-rent-or-buy.html
Does the "dealboy" know how to read?
Huntersberg do you agree with str33teasier?
>Huntersberg do you agree with str33teasier?
You know I'm a fan of yours even when I disagree with you.
ke mo sobay tonto!!
"Is is normal to issue a mortgage at such a good rate to someone who will theoretically be *one year short of a century* when it's scheduled to be paid off? ... Still, I wonder how the loan officer got that one past the boss. She'll be 99 when her last payment is due!"
Because it's blatantly illegal to make lending decisions based on age.
...and besides, if the avg life expectancy is, say, 85 years old does that mean a 56 year old shouldn't qualify for a 30 yr mortgage? Or an 84 year old should be allowed to charge something on a credit card?
Is there any other kind?
If the person dies, you just sell the property, and recoup the balance of the loan. That's why it's perfectly fine to issue a 30 year mortgage to an 80 year old.
The bigger issue is why she didn't take his last name. I just don't understand this. ;-)
Bigger issue is why you don't buy something bigger for yourself. You have a downpayment for a much-bigger place. Even if you think 350 sq ft is plenty of space for you for decades to come, it'll be free.
If not that, why don't you buy a place as an investment and have a renter fund your retirement.
You're all talk, dealboy. Just a lot of empty blabbering.
Empty vs racist, hmm.
Or she could have just bought a 1,500 square foot HOUSE in a nice neighborhood in Western Pennsylvania for $125K. Taxes less than $400 a YEAR. And she'd still have a nest egg.
You can rent a one bedroom for $2600 in Manhattan. THe point is really that she moved to a smaller place, not that she owns versus renting.
No, the point is that in her retirement she blew her nest egg on an apartment that she won't be able to get out of easily in the event of just one financial blip.
> Or she could have just bought a 1,500 square foot HOUSE in a nice neighborhood in Western Pennsylvania for $125K. Taxes less than $400 a YEAR. And she'd still have a nest egg.
And then what, she'd have money for what? She wants to have a life in a place that has life with familiar surroundings and people who she can relate to. There's no point in being alive if she gets sent to Western Pennsylvania.
So, let me get this straight... folks are calling this person an idiot for buying now, after prices declined 20%, and rents went up.
So what does this made the geniuses who bought in the last few years... BEFORE the decline and rents were lower?