If I was in the market for a 1-bedroom for 2 years then the economics clearly appear to point to renting. However, I'm in the market for a 5 year term for a 4 bedroom / 3 bed + maids / 3 bed + home office. From a quality of life perspective, we're looking for double vanity in the master bath as well as a separate shower and soaking tub. I'm looking for an open plan but large kitchen with top of... [more]
If I was in the market for a 1-bedroom for 2 years then the economics clearly appear to point to renting.
However, I'm in the market for a 5 year term for a 4 bedroom / 3 bed + maids / 3 bed + home office. From a quality of life perspective, we're looking for double vanity in the master bath as well as a separate shower and soaking tub. I'm looking for an open plan but large kitchen with top of the range appliances. My wife and I work on the east side (ond in the 40s and one in the 20s and we both enjoy short commutes so don't want to be outside of a perimter of 5th avenue east between Houston and 72nd.
I'm seeing the fully loaded cost of a $2.75mn 4 bedroom apartment as equivalent to a $15,000 a month rental after including both the opportunity cost of the deposit and taking account of the tax relief on $1mn of mortgaage. We can debate whether we can stretch the rental cost to $17,500 to take account of closing costs and some unanticipated maintenance but we're in the perimeter.
My problem is that the rental market is too thin. Is this just a seasonal effect or should I give up and buy?
[less]
Response by nyc10023
about 16 years ago
Posts: 7614
Member since: Nov 2008
That was my dilemma in '05 when we sold our apt, thinking that some crazy peak had been reached (and it had). 3br+ rentals within our parameters were thin on the ground. We ended up buying in '06 with the same 5+ year horizon. Given the benefit of hindsight, I think we should have paid more for a rental (I was quibbling about a 20% diff. between 2 apts under consideration). Both rentals under consideration were condos and both LLs not about to sell, so no danger of having to move.
BTW, few rentals here have double vanities - is that such a deal-breaker?
Ignored comment.
Unhide
Response by inonada
about 16 years ago
Posts: 7952
Member since: Oct 2008
Oxymoronic, perhaps something is wrong with your rental search. You should be able to find a "$2.75M apartment" for $10K a month, and for $15K a month, you should be able to find a "$4-4.5M apartment". How are you searching?
FWIW, here are a couple of random places I saved for no particular purpose because they looked like good deals:
Both are on the west side, but you get the idea. The pictures are missing on the second one, but I remember it as nicely-renovated on the inside with good light given the location. I like the first one better personally given the crazy-ass view. My point being for $15K a month and a good search, you should be seeing some bad-ass places with 4000 sq ft and views, not $2.75M generic 4BR apartments.
Ignored comment.
Unhide
Response by Oxymoronic
about 16 years ago
Posts: 165
Member since: Dec 2007
Thanks.
nyc10023 - the double vanity is probably not a deal breaker but certainly something I value in the context of the overall finish. General aesthetics of some of the bathrooms in some rental units are pretty woeful. If I was spending $1,500 a month, a bathroom with a large plain mirror, globe lights above the vanity and bathtub shower unit with a 12" depth soaking tub may be something I expect. But for 10 x that money for 5 years, I'm looking for something better. Same for parquet floors vs. hardwoods! Nothing that would be a dealbreaker in isolation but in totality could certainly result in a place being crossed off the list.
inonada - the place on West 26th street looks a very reasonable value. The fact that it started off at $20k and ended up at nearer $12k is also teling. Ok - I don't want to live on West 26th but perhaps the story is that I just need to wait it out for the right apartment to rent and search for places at or around $17k or $18k and negotiate.
Ignored comment.
Unhide
Response by mdennes
about 16 years ago
Posts: 15
Member since: Mar 2007
oxymoronic, we're in the same boat. i think we are going to rent for another year or 2 and take the hit on the taxes. ive found some nice classic sevens on the upper east check out 12 east 88th for 11.5k. also 1009 park is a rental building and sometimes you can get a nice rental at 40 east 94th. i think its a seasonal thing. im hoping more rentals come on in the spring. brompton and lucida are nice but overpriced for what they are and too far east. i think they will come down in price as well.
Ignored comment.
Unhide
Response by drdrd
about 16 years ago
Posts: 1905
Member since: Apr 2007
I twice tried 'midtown east' & they somehow ignored that (never had THAT happen before) but here are a few places for your consideration -
The $17.5K one probably went for lower than ask if the $19K one (which is 25% bigger) is a proper calibration of where the market is. I've got a broad 2000+ sq ft / less than $15K SE search that I've been running for a year (now mainly for entertainment). About one new listing or reduction gets to "now that's a deal" status each week, so I think you should see something really good in your search space every several weeks. The frequency of good listings has been pretty constant over the past year, so I don't think there's a seasonal issue going on.
I'd definitely recommend including at least $20K places in your search, or even higher for "previews" if you want to end at $15K. Much to my surprise, I found places that I considered to be real good asking prices to be willing to go down 10% or more from ask. I.e., if a place is asking $18K, an offer of $15K seems to be taken more often than not. This is especially true if they've been chopping asking rents for a while. When someone drops the asking rent by 10+%, it's likely the case that they didn't have any 10%-below-ask bids at the old price, and they are realistically thinking the rent will be below their ask and just want to get some cash flow.
The other thing I'd recommend is that you not just limit your search to 4BR as many 3BR + home office will be listed as 3BR, but I'm guessing you already know this.
Ignored comment.
Unhide
Response by Oxymoronic
about 16 years ago
Posts: 165
Member since: Dec 2007
> Inonada. If I find places of the caliber of 40 Bond in my price range I would be jumping on them. Seems like a no brainer compared to the price these places actually sold for. I guess I'm thinking that some of the fear has left the market and what I'm seeing by way of comparison is nowhere near as nice. Perhaps I just need to wait and see what comes on in the new year.
It was on my "best" list, looks pretty nice in pics (though low-floor) & at a good price, but I never visited. Seems to have been rented just 2 weeks ago.
On 40 Bond, I agree those $17.5-$19K rents are great compared to the $7-$8M those places sold for, but I never understood the attraction of the units. At the end of the day, despite the "townhouse" moniker, they are bottom-floor light-challenged units in a good-but-not-exceptional location. The building is beautiful, but at $3K per sq ft, there are many other places I would have rather spent the money. Even at the "deeply discounted" rents, there are many other places I'd rather rent.
That was my dilemma in '05 when we sold our apt, thinking that some crazy peak had been reached (and it had). 3br+ rentals within our parameters were thin on the ground. We ended up buying in '06 with the same 5+ year horizon. Given the benefit of hindsight, I think we should have paid more for a rental (I was quibbling about a 20% diff. between 2 apts under consideration). Both rentals under consideration were condos and both LLs not about to sell, so no danger of having to move.
BTW, few rentals here have double vanities - is that such a deal-breaker?
Oxymoronic, perhaps something is wrong with your rental search. You should be able to find a "$2.75M apartment" for $10K a month, and for $15K a month, you should be able to find a "$4-4.5M apartment". How are you searching?
FWIW, here are a couple of random places I saved for no particular purpose because they looked like good deals:
http://streeteasy.com/nyc/rental/486478-condo-200-riverside-boulevard-lincoln-square-new-york
http://streeteasy.com/nyc/rental/585848-rental-142-west-26th-street-chelsea-new-york
Both are on the west side, but you get the idea. The pictures are missing on the second one, but I remember it as nicely-renovated on the inside with good light given the location. I like the first one better personally given the crazy-ass view. My point being for $15K a month and a good search, you should be seeing some bad-ass places with 4000 sq ft and views, not $2.75M generic 4BR apartments.
Thanks.
nyc10023 - the double vanity is probably not a deal breaker but certainly something I value in the context of the overall finish. General aesthetics of some of the bathrooms in some rental units are pretty woeful. If I was spending $1,500 a month, a bathroom with a large plain mirror, globe lights above the vanity and bathtub shower unit with a 12" depth soaking tub may be something I expect. But for 10 x that money for 5 years, I'm looking for something better. Same for parquet floors vs. hardwoods! Nothing that would be a dealbreaker in isolation but in totality could certainly result in a place being crossed off the list.
inonada - the place on West 26th street looks a very reasonable value. The fact that it started off at $20k and ended up at nearer $12k is also teling. Ok - I don't want to live on West 26th but perhaps the story is that I just need to wait it out for the right apartment to rent and search for places at or around $17k or $18k and negotiate.
oxymoronic, we're in the same boat. i think we are going to rent for another year or 2 and take the hit on the taxes. ive found some nice classic sevens on the upper east check out 12 east 88th for 11.5k. also 1009 park is a rental building and sometimes you can get a nice rental at 40 east 94th. i think its a seasonal thing. im hoping more rentals come on in the spring. brompton and lucida are nice but overpriced for what they are and too far east. i think they will come down in price as well.
I twice tried 'midtown east' & they somehow ignored that (never had THAT happen before) but here are a few places for your consideration -
http://streeteasy.com/nyc/rentals/nyc/no_fee:0%7Cprice:-15000%7Cbeds%3E=4
Oxymoronic, from what I've seen over the past year in this market, the $20K -> $12K story is pretty common.
Here are two of my favorites that did $45K -> $19K and $45K -> $17.5K:
http://streeteasy.com/nyc/rental/483669-rental-40-bond-street-noho-new-york
http://streeteasy.com/nyc/rental/266918-condo-40-bond-street-noho-new-york
The $17.5K one probably went for lower than ask if the $19K one (which is 25% bigger) is a proper calibration of where the market is. I've got a broad 2000+ sq ft / less than $15K SE search that I've been running for a year (now mainly for entertainment). About one new listing or reduction gets to "now that's a deal" status each week, so I think you should see something really good in your search space every several weeks. The frequency of good listings has been pretty constant over the past year, so I don't think there's a seasonal issue going on.
I'd definitely recommend including at least $20K places in your search, or even higher for "previews" if you want to end at $15K. Much to my surprise, I found places that I considered to be real good asking prices to be willing to go down 10% or more from ask. I.e., if a place is asking $18K, an offer of $15K seems to be taken more often than not. This is especially true if they've been chopping asking rents for a while. When someone drops the asking rent by 10+%, it's likely the case that they didn't have any 10%-below-ask bids at the old price, and they are realistically thinking the rent will be below their ask and just want to get some cash flow.
The other thing I'd recommend is that you not just limit your search to 4BR as many 3BR + home office will be listed as 3BR, but I'm guessing you already know this.
> Inonada. If I find places of the caliber of 40 Bond in my price range I would be jumping on them. Seems like a no brainer compared to the price these places actually sold for. I guess I'm thinking that some of the fear has left the market and what I'm seeing by way of comparison is nowhere near as nice. Perhaps I just need to wait and see what comes on in the new year.
Did you see this place?
http://streeteasy.com/nyc/rental/550737-condo-31-east-28th-street-midtown-south-new-york
It was on my "best" list, looks pretty nice in pics (though low-floor) & at a good price, but I never visited. Seems to have been rented just 2 weeks ago.
On 40 Bond, I agree those $17.5-$19K rents are great compared to the $7-$8M those places sold for, but I never understood the attraction of the units. At the end of the day, despite the "townhouse" moniker, they are bottom-floor light-challenged units in a good-but-not-exceptional location. The building is beautiful, but at $3K per sq ft, there are many other places I would have rather spent the money. Even at the "deeply discounted" rents, there are many other places I'd rather rent.