Buy vs. Rent in Yorkville

yorkville is awful so I would definitely rent, not buy.

How much is maintenance on the 1BRs for sale?

I would never live in Yorkville, I was thinking interesting from a rent vs. buy perspective.

Seems to me that what rents for 2k should sell for less than 400k. or am i not calculating things right.

Avg. maint on the one beds is 1000/mo. And it is a coop.

Coop with a liberal rental policy -- hence the large number of rentals in the building.

The ratio is near breakeven in the one-size-fits-all formula (17x, 15x is probably more like it). But considering the maintenance along is half the rent (and maintenance is trending up) thats not a good sign. Still financially a loser.

If one were to buy at 20% down with a 5% mortgage, the monthlies would be $2760 or so. Those numbers are close enough that, if you count tax benefits, you could well end up ahead buying rather than renting over the course of a few years. How many years depends very much on how housing prices and rental prices do -- and not just in the obvious "if five years hence prices have gone lower, you'll have lost money" kind of way, but in the "if housing prices appreciate 3% versus 2%, you'll break even in half the time" (5 years versus 10 years) kind of way.

A bad deal unless you are planning to die the proverbial old maid eaten by your cats in Yorkville. With a 40 year horizon, it may work out.

I like yorkville. its like small town USA but in the upper east side.

"If one were to buy at 20% down with a 5% mortgage, the monthlies would be $2760 or so. Those numbers are close enough that, if you count tax benefits, you could well end up ahead buying rather than renting over the course of a few years."

Only if you *completely* ignore the $80k in cash you just put down...

No, that's assuming a 5% return on the cash, actually.

You're putting 5x *leveraged* into the RE market, and the equivalent return is 5%?

Where's Rhino when we need him?

Imagine that you're an investor. You buy this place for $410,000 cash. What's your net yield after paying $1000 a month in maintenance? 2.9%.

Does that look attractive to you?

Doesn't cut it for me for an illiquid investment.

I think the problem with this apartment is the maintenance. Too high given the price.

> Doesn't cut it for me for an illiquid investment.

bingo.

"The ratio is near breakeven in the one-size-fits-all formula (17x, 15x is probably more like it). But considering the maintenance along is half the rent (and maintenance is trending up) thats not a good sign. Still financially a loser."

Or 200 times monthly rent, (16.66x) which seemed to be the standard formula during the boom years.
And are they giving a month's free rent? (and by the way, the boom years are clearly over)

I can easily get 5% on a REIT (real estate investment trust) and it is liquid.

Yes, I assumed he'd be foregoing returns of 5% on the $80,000 cash. If he (or his theoretical buyer) is like many people seriously considering buying a place, at least some of that down payment money is in something relatively safe and stable like short-term bonds or CDs. I personally would not assume that he's foregoing 8% or 10% returns. But everyone is free to make their own assumptions, obviously.