SERIOUS QUESTION: Should I buy or rent

Just rent for a year until you get a better feel for NYC.

Have fun with it:

http://www.nytimes.com/interactive/business/buy-rent-calculator.html

Regardless of downpayment/income it comes down to the building and those blue hair co-op commando's.

Now is a great time to buy, but you should probably spend some time living in the city first to see what neighborhood you want to live in.

Dude, you're 24. Are you from the NYC metro area (e.g. born and raised? Is this truly home to you?)? If so and you know you are confident you're staying put, then consider a condo and do the math. If you're uncertain about where you want to be longterm and don't want to be a landlord and likely have to eat some monthly carrying costs (which on $130k gross income will sting very quickly) then you should unquestionably be renting...

Unless you find an amazing deal on a fantastic Studio or small 1BR, likely the numbers aren't going to make sense.

Serious answer: rent.

I was kind of in same boat when I came here and ended up buying after a year. If I had bought when I arrived I would have bought in a stupid area. As others say, rent first. I would do a six month rental in an area you think you will like and then start looking after a few months. Really took me a year though to get the neighbourhoods figured out. A lot can change in a few blocks.

I think the biggest thing is whether you are happy being a landlord after, as you'll outgrow a little studio in two years. You have good income and a good downpayment so go for a one-bedroom. And definitely get a condo. Don't even bother with the co-ops, or condops (which are just dressed up co-ops). You should tell people what your preferred neighbourhood is and then we'll all tell you how foolish you are! Midtown sucks and condos are pretty scarce anywhere decent downtown, unless you move to FIDI or something else silly.

Rent

how much is in your 401k or equivalent, if any, (not that I believe in said accounts), but just curious?

rent.

you are young. what if you want to change neighborhoods.
find a partner with a great apartment that you will move into after a year or so, or need more room for both of you to be comfortable.
decide the NYC is not for you all together.
fall in love with Williamsburg or LIC or Park Slope or JC or Hoboken.....

you get the drift.

Initially, you should rent when relocating to NYC. A one bedroom apartment will be fine for you. Also, you may not want to limit yourself to Manhattan.

I would rent if you're not from here - just so that you can see what all the neighborhoods are like in the end. You might also have to add in the cost of affordability and what you want out of the place (doorman, laundry, elevator, etc.). The only way I would buy is if I knew for certain where I wanted to live and that my mortgage was cheaper per month vs. rent.

Renting first in a new city is always a good idea. You can get a sense of the neighborhoods and find out what appeals to you most. It does sound like you might have already narrowed your field down to downtown and midtown (curious if you know the city already). If you're familiar with areas and know where you might want to live, then looking to purchase might be a good idea. The inventory is relatively limited at the moment so, depending on areas, I would venture to say that you could see much of what is out there in a defined price range.

You would have trouble passing a co-op board, yes --- especially if, say at a $500K purchase price, you are only left with $50K in liquid after your 20% down payment. You want to have at least 2 years worth of mortgage and maintenance payments left over in liquid after the down payment.

So in conclusion, if you're familiar with neighborhoods and know what you want, I would opt to get pre-approved first and take a peek at the sales market. You might find something that makes more financial sense (with monthly payments and tax breaks) with regards to a purchase. If you haven't yet decided where you'll be happy living, skip the purchasing process and rent for a year. Should you buy in the future, be sure to give yourself roughly 3 months from the point at which you have an accepted offer. So start looking at units on the market 4-5 months before your lease is up.

Hope that helps!

Brad
www.BuyingNYC.com

Oh I would rent. I have owned for a long time now but during my 20's and early 30's renting was great. You can choose where you want to live in the city or maybe you find you don't like the city or job changes. Enjoy NYC in your 20's and just rent. This coming from a huge believer in buying but you can always save like I did and that's a good thing too. On the other hand...if you think that you are able to and really believe in NY RE go with what's comfortable. In my 20's I could have never been that savvy it was all work and enjoying NYC. In my 40's I'm more than happy I own but didn't by at the height of the market either so that helped. Good luck with your decision.

buy not by...see maybe I enjoyed NYC too much in my 20's :)

rent first. If you don't know the neighborhoods, you will want to find out what 'demographic' attributes you want to live in, whether its racial, economic, familial status, hetero etc..

Rent. With your lack of industry tenure (despite your purported income), getting past most co-op boards won't be easy.

Rent.

One year will neither make an appreciable difference in where the real estate market will be (in either direction) nor in your net worth bottom line at this age.

But in terms of experience in actually living in NYC, in actually living in the neighborhood, it will make a massive difference.

Echoing the "rent for 6-12 months" crowd. You'll soon discover neighborhoods that you like spending time in. You'll start imagining yourself living there. Soon you'll know just where you want to live.

The $500k apartment Brad mentions would be difficult, but buying a cheap-ish $300k studio with 40% down and the other $30k liquid, you'd be a shoe-in with a co-op board, assuming that your very high income is a steady salary from a regular employer.

Your income is surely in the top 1% for someone your age. Do you mind revealing what you do for a living?

"assuming that your very high income is a steady salary from a regular employer."

He said his income was only $130K.

"He said his income was only $130K."

And he's *twenty-four* years old. In times when most people his age are working sub-minimum-wage internships. If they have jobs at all.

What does age have to do with it? I was making that dollar amount when I was 24 years old *20 years ago*. People of all ages make a wide range of incomes, ranging from sub-minimum wage to millions.

Very strong argument Matt. Starting salary of 130,000 is crap and is no predictor of future income. Am sure that when he is 28 he will likely be flipping burgers for minimum wage.

hmmm. Matt was making $130K twenty years ago at age 24 but when he was ready to buy an apartment he could only afford Washington Heights

Get back to me after he's consistently earned $130K for at least 5 years.

"Matt was making $130K twenty years ago at age 24 but when he was ready to buy an apartment he could only afford Washington Heights"

Matt chose Washington Heights over other neighborhoods. I realize you find that hard to believe, but it's quite true.

You just go on thinking about how other neighborhoods in so-called "prime Manhattan" are superior. That kind of thinking is what keeps the rifraff out.

I had to google where that was. I came across this, which may be appropriate for the OP to view if considering said neighbourhood. Sounds charming.

http://www.rottentomatoes.com/m/washington_heights/

Re: http://www.rottentomatoes.com/m/washington_heights/

premise -- "....He's desperate to move out of his Washington Heights neighborhood..."

surprise surprise

Right the riff raff are in SoHo, and the desirable elite are in Washington Heights. LOL

Sleep around. Sold my NY stuff and went to Florida for a few years, then came back and found (on Craigslist) short term, furnished rentals successively in Jersey City, 25th Street between 7th and 8th avenues, West 66th St, 87th and Columbus, 57th and 1st, back to the same place on West 66th. I knew NYC from before and this was still an education in where and how I like to live.
With no furniture, dishes, housewares etc, every move was one car load of clothes and personals that took a few hours.
If you do buy, choose condop or condo so if job, life, or whim lead you elsewhere (or you find a significant other whose place is nicer), you can rent it in case the sale market is low or you need the investment tax break.
I'm 67 now - been through so many real estate cycles, I'm just about spun dry!

> Now is a great time to buy

based on?

Interest rates?