Buy vs. Rent- NYpost

So put this in the perspective of NYC. $1,000,000 apt requires a $300,000 down payment, meaning a $700,000 mortgage. That puts your monthly payment at $3758. Assume a $2000 a month maintenance. That puts your total monthly costs at $5758. You're telling me you can't find a luxury 2 bedroom apartment with a monthly cost under $5758???? It seems like a no brainer to rent in NYC ...

bump

I guess that there is so many posts in SE about buy vs. rent that usual posters passed on this one.

NYC i do not think it is possible to rent a luxury 2br in manhattan for 1m usd... whereas what you can for 5kish a month can be pretty decent.

hyper frustration syndrome collateral occipital mental malaise

get better SOON!

sorry was unclear... i meant to say: what you can get buying a 1,000,000 usd apartment is not even close, in terms of "luxury", to what you can get renting a 5,700 usd apartment

bulls?

It's the Post, what do you guys want?

Maarek, you're saying you can rent a NICER apt for $5700 a month than buy one for $1million?????

5700/m gets you a better apartment

Wow, impressive. Find me a 2/2 on the UES or UWS for $5000 a month ... I guess I'll keep my money in the bank and skip the buying process.

66 and 3rd, nice 2br 2bth, nice floor, really decent unit, a friend of mine rented there a few month ago for exactly 5k/m.

http://streeteasy.com/nyc/rentals/upper-east-side-manhattan/no_fee:0|price:-5000|beds%3E=2|baths%3E=2|amenities:doorman

I saw a rental in Darien for $6,300 a month that the owner has on the market for $2.4mm. I guess the disease is all over.

A $5,500-$6,000 rental is still asking around $1.2-1.3mm. The maintenance will run about $1800.... Yes for a cap rate of about 4%....at least 200 bps lower than your mortgage rate.

Price probably belongs in the $800s.

Rhino, can you explain what you mean by "cap rate"?

Oh, and what's a "bps"?

I am renting a very nice 2bd 2bth in brooklyn for a little over 2k. This condo that was not sold would be 3.5k to own with maintenance. Of course I would get some back at tax time, but why? My wife and I will outgrow it in 3 yrs, where is the incentive? We are both civil servants saving more into our pensions and 501/457's. We can either rent for another 15yrs then vest out anywhere else in the world(london and tokyo excepted) OR wait another two years and buy at a price that is not insane. Correct my thinking if I am wrong, I would LOVE to own.

"So put this in the perspective of NYC. $1,000,000 apt requires a $300,000 down payment, meaning a $700,000 mortgage. That puts your monthly payment at $3758. Assume a $2000 a month maintenance. That puts your total monthly costs at $5758. You're telling me you can't find a luxury 2 bedroom apartment with a monthly cost under $5758???? It seems like a no brainer to rent in NYC ... "

Did this dude really just ignore the cost of putting down $300,000???

No wonder so many people make huge mistakes in RE...

hfs, that you think you have any idea of what is cool and what isn't is pretty funny...

Connecticut rent vs. buy....Apparently I can rent something for $4800/mo that is on the market for $1.935mm. Unreal.

What would be the cap rate?

Here are some good arguments as to why buying may be worth it:

http://meganmcardle.theatlantic.com/archives/2009/12/the_benefits_of_buying_a_house.php

She does seem to make an exception for NYC, though.

The costs of moving in today's Manhattan rental market are very low. If we had a tight rental market like 1998-1999, and decent price/rent ratios...the case for owning would make a lot more sense.

is it any wonder why ny is the unhappiest state in the union? ignorant people (what's a cap rate?... heard of google or bing?) overpaying for illiquid assets... wouldn't want to be there when you realize you've painted yourself into an economic corner... ouch!

buying now is a bit like smoking in the face of the surgeon general's warning... do us a favor.. when cancer hits don't act surprised... instead, blame yourself and die with dignity

the answer is to RENT

So Renting has it!!!! Another question: is there a difference between renting from an owner and renting in a solely rental building? Some people feel weird renting from an owner b/c they can put a max time frame on your lease and people you're living in someone else's space ... but then again, renting from an owner may produce a more renovated apt? Has anyone had experience with this? There don't seem to be many purely rental buildings on the UWS. We're on the UES now and there's tons ... but the UWS is soooo appealing!

Rhino,

How do you get a 4% cap rate in your above example?

Seems to me you have to deduct the maintenance from the rent before you divide by the price. That's certainly what happens when looking at commercial properties.

Am I missing something? I come up with a cap rate of 3%.

I did deduct maintenance.

Renting from an Indy owner has more irrationality risk. I has an owner try to raise my rent in July 2002 when rents had clearly fallen from the prior year.

"The costs of moving in today's Manhattan rental market are very low. If we had a tight rental market like 1998-1999, and decent price/rent ratios...the case for owning would make a lot more sense."

The cost of my move ended up being maybe half of the $$$ for the free month I got. And I got better value.
Old landlord thought I had a good deal already, and wanted to keep rent flat. uh, nope.

So, essentially, lanlords are paying you to move.

Oops. My bad arithmetic.

"So put this in the perspective of NYC. $1,000,000 apt requires a $300,000 down payment, meaning a $700,000 mortgage. That puts your monthly payment at $3758. Assume a $2000 a month maintenance. That puts your total monthly costs at $5758."

And yet again, you're conveniently leaving out the ENORMOUS savings advantage of paying a mortgage versus rent vis-a-vis the mortgage tax deduction.

Knock about $1500 off the total monthly nut for the co-op for a more accurate comparison to the rental.

Per month, I'm paying slightly more for my combined mortgage/maintenance in my co-op than I was in my comparable rental ($2100 versus $1700), but since becoming an owner, I've seen my annual tax refund jump from about $1800 per year to an average of $14,000 per year. So once you factor in the tax advantages to owning, my REAL monthly outlay for my co-op is $933.33, versus the $1700 for old rental.