Making the decision to rent instead of buy

Renters are losers.

Buy now before prices start to rise.

alot of landlords renovated rent stabilized apartments that were vacated in order to add a percentage of the renovation costs to the base rent to lift the apartment out of rent stabilization. so yes, there are some apartments that have been renovated quite nicely.

stevejhx...not really so helpful. The real question is this: since it's cheaper monthly now to rent vs buy (with little exception) for a "like" apartment, and you are already planning on dipping into savings to rent, wouldn't buying be very risky for you?

smacstein, you must be new to this board - I've been expounding your argument for the past 16 months. I was being facetious - I just retyped the arguments I've gotten back from others.

Two scenarios:
1) If you buy and put $200k-250k down, then you can get your monthly payments with mortgage and maint to about $4000. But you've lost the availability of some of your savings and thus a cushion (which I would like in these economic times).

2) If you rent a place for $4500, then you keep your $200k-250k in the bank (EARNING INTEREST) can dip into it each month to pay the incremental difference. BUT since it is earning interest, you are not really dipping in the full $500 per month, but instead less.

we get it.

Your scenario is flawed, because as multiple threads on these boards have shown, the actual example would be more like monthly payments of 7500 to buy and 5000 to rent for LITERALLY the SAME apartment. Not similar, but THE SAME, both for rent and sale. Just look through a few pages of threads for real world examples.

NYCApt1234 -- In scenario 1 you should add that if you buy and put $200-250k down, and then need to sell within a few years, you will have probably end up having lost a substantial portion (or all) of those funds. That is the key fact that makes me feel more comfortable renting at this point.

From my own personal experience, rental apartments just aren't as nice as homes that you own. That doesn't mean you need to go out and buy something, but it probably means you need to shell out more money to get something as nice. Either you pay a huge security deposit by being a home owner, or you pay more in terms of monthly fees to get a nice rental. Personal choice.

check out 200 wea or any of the rsb bldgs for direct comparison of monthlies for renting and buying. at this point, renting is much less expensive for the exact same unit.

PJC: I agree with you! Tieing up all that cash right now worries me!!!! But I have been looking to buy and have found certain aspects of a apts that I am not willing to compromise on. I want a renovated (non-white) kitchen and hardwood floor strips (not parquet). Is it possible to find a rental with these characteristics??? That's what I'm having difficulty with... Dipping into savings each month in a rental is more agreeable to me right now than giving up $200k of cash in something that may lose value in 5 years.

There are a lot of buildings that are new construction, and feature a lot of nice modern amenities, which were intended to be sold as condos, but are going rental instead - so I expect there will be a lot of nice places to rent out there. I don't know anything about the UES though.

You need to look at condos for rent by owner of sponser in brand new buildings. There are tons. Good luck.

"or" sponsor.

If you find an apt you love w/ renovated kitchen, but still has parquet floors, is it unreasonable to ask that strip hardwood floors be put in before you move in? So many places are being listed for so long w/o renters, so maybe they'd be motivated?

Any good websites to find such apts????

nybits.com

there are plenty of condos without parquet floors that are available. problem is you might have to move, but some will be happy to write a longer-term least.

on SE go to the new developments section, pick Manhattan, and look for rental listings. I think the listings for general rentals are not so complete, but for those in condo buildings I'd guess they're pretty good.

In looking at this, I have found that if you can get an attractive mortgage rate (sub 5%) and are in a higher tax bracket to utilize mortgage interest and maintenance tax deductions, you can buy at an equivalent rental cost of $3/sq ft per month for around 1500 sq ft. Right now I'm renting at $5/sq ft. Then the question is the opportunity cost of your down payment while renting versus the investment in the apartment you purchased. You probably need 5 years to ensure that your apartment returns the opportunity cost of the down payment in the renting scenario.

http://www.streeteasy.com/nyc/rental/470003-condo-207-east-57th-st-sutton-place-new-york

Lot's of desperate investor/owners who bought at peak.

stevejhx....:-)!

on halstead, corcoran, pru and other such sites you can click on "condo" under rentals searches.

So, to add up to burkhard's example, you can either rent it for 5,700 or risk 167,000 as down payment and fork between 9,300 and 11,000 per month to own it (you know, you'd pay 9,300 if you could get a mortgage of that size with a 10% down payment and get a 5% rate, not in a million years) So, realistically, you would have to put down 500K as down payment to get a 30/70 LTV and then you'd be paying probably close to 5,700 per month to be a HAPPY OWNER.

Now, you can tell us your decision!

Is it general knowledge that these condos that are for rent are for rent by owner, and thus they can not resign your lease at anytime? Isn't this a huge risk of being asked to leave after a year or two?

TO the above comment - yes, this is something you must discuss in advance. I currently rent a condo and have for two years. The landlord was unwilling to lower rent, but we could have stayed another year. She said "at least" two years when we moved in. But you need to be clear.