buy or rent if in city for 2 years?

rent.

ali r.
DG Neary Realty

hire a lawyer and see if you can get some of that tuition money back to pay off the $200k student loan.

Keep in mind that on an $800,000 apartment, you'd be paying about $50k in real estate commissions to sell it -- not to mention your other transaction costs of buying, selling, moving, potential overlap, etc. Nothing against realtors, but that's a lot more nauseating than spending $100k on rent, if you ask me.

Rent. You should buy with at least 5 years in mind, preferably more. There are so many other fees that come off the top (and cannot be financed) that you will most likely end up losing money.

Besides, the space you will get with rent money vs buy money will make you a happier person over the next two years.

clsm: my husband and i are in the same boat as you ... our time horizon is a bit more, though, at probably around 5 years. but even then we can't make the solid conclusion that we should buy. as MRussell mentioned there are a ton of fees that one does not associate with buying that tend to pop up. our broker has told us to expect between $10k-$20k in closing fees and lawyers fees, once all is said and done. that's a huge chunk of money to us.

we've also put in a few offers and i must say that the emotional pain or waiting "to hear if you're good enough" is wretched!!!!!!! i would much rather rent (leaning in that direction now), spend a little more each month, but have the ease of leaving should the need arise without having to unload an apt ...

BUT the question becomes: since we've seen so many amazing 2 bedroom 2 bath apts for sale, can any rental really compare? This is where i fear we may run into issues ... something for you to think about ...

It's not just fees when you buy, it's when you sell. There are state taxes on sales, plus broker's commissions so expect that the total cost on the sale to you is about 10 percent. In other words, rent.

For a two year horizon rent makes the most sense.

NYCApt1234, where exactly are you looking? I'm surprised that you think that you'll have to spend more on rent, and I'm surprised that you cannot find similar-quality apartments for rent.

Why is the thought of spending over $100K on rent for two years any more nauseating than spending much more than that on interest payments to a bank?

And that's before lost investment opportunity on your considerable down payment, and before all the massive transaction costs that apply in NY, as other posters have highlighted.

and...if one is nauseated by this (or any expenditure) how about spending less? perhaps a smaller place or in a less prime area? and, perhaps it would be prudent to pay off the $200K student loan before considering borrowing any more?

What Alan said. And as inonada will tell you, the costs of owning are understated. You need to at least amortize transaction costs.

I think that the overwhelming sentiment expressed here was what we had earlier concluded - rent. However, we began to wonder whether the potential for savings (tax deductions on mortgage interest + possible appreciation in value of the apt - an uncertainty in these times obviously) could potentially outweigh the transaction costs everyone is mentioning.

NYCApt1234 - where are these amazing 2 bedroom apts you're finding? I had assumed (and as MRussell writes) that we could get more apt for our targeted budget by renting than by purchasing (btw - we had considered spending more monthly in mortgage and CC if we bought - up to $5500).

even with putting $200K down on a $800K place that would rent for $4,500, you would end up paying $4,300 after taxes, $5,300 pre. taking into cosideration that the common charges would be $2K and 50% tax deductable.

considering that no coop board will ever pass you with only $30-40K as you stated, your numbers have to be adjusted to put down $150K and now you're paying a little over $4,500 after tax, almost $5,600 pre.

now take your $200K and put it in a 2% CD, being super conservative, and you'll get $4K in interest. remove 1/3 for taxes and you're left with $2,666. now you're $4,500 rent is $4,288.

Renting is always the preferred method when real estate prices are stagnant, slowly rising or in decline. Those that tell you "buy if you have a 5 year time horizon" should talk to all buyers in 2005 who are trying to sell in 2010. The great thing about New York City is that you can substantially rent what you can buy.

You should have no trouble finding an apartment that sells for $1.1M to $1.3M with a $4500 budget. Your transaction costs will be $100K minimum on a place like that.

Blah blah blah blah bah. So blah blah blah blah blah $4.5k too expensive. Blah blah blah blah blah, alien forces may or may no take us back on 2 yrs. Blah blah blah blah blah, student loans. Blah blah blah blah blah, owning costs nothing, blah blah blah blah blah. Please help.

Why is this thread being entertained? Complete nonsense.

Because it provides entertainment. I give top props to Sunday on this one. Besides, clsm may be serious.

Rent

"Why is this thread being entertained? Complete nonsense." - How rude. I reiterate the fact: if you have nothing productive to say, say nothing at all.

And yes, clsm is serious ... as am I. The apts I've been seeing have been in the West 71st to 79th area from CPW to West End. We've focused on under $1million and maint under $2000 a month. The finishes have been nice, but the space and family growth is a concern.

The rental supply doesn't seem as ample on the UWS.

Blah Blah blah blah I'm financially stupid too. Blah blah blah cow btwn 70 and 79th. Blah blah blah blah.

"We were planning to rent a two bedroom apartment for $4500 or less in the UWS."

RENT.

And forget paying such a ridiculous amount. If you're willing to look north of 125th Street, you can score THREE bedrooms and a formal dining room for around $2800/month.

Plus $2900 a month in taxi fares and tips.

rent. period.

I second Inonada.... props to Sunday! thats' flmao worthy.

AH, no tips

If you want to think about this very simply, your transactions costs of getting in and out of a purchase are around 10% in NYC. If you don't think your apartment will appreciate by at least that amount in your time horizon, rent. If you do think that kind of appreciation is likely in your time horizon, then you can start thinking about what you lose in the opportunity cost of your downpayment and what you gain from tax deductions and such.

"Renting is always the preferred method when real estate prices are stagnant, slowly rising or in decline." Right, rmrmets -- the best time to buy is right in the middle of a quickly inflating real estate bubble. Do you time your stock buying that way, too? (Or were you being ironic?)

Agree with the others here that it never pays to buy if you have a two-year timeframe. Five years is borderline but may not be crazy, depending on the specific deal. Why posters here have to be outright jerks when people ask questions, however, remains a total mystery to me.

"And forget paying such a ridiculous amount. If you're willing to look north of 125th Street, you can score THREE bedrooms and a formal dining room for around $2800/month."

And Brooklyn is $2k and Kansas is $500. Irrelevant.

If you don't want to live there, who cares.

and, if it wasn't clear... RENT.

"And yes, clsm is serious ... as am I. The apts I've been seeing have been in the West 71st to 79th area from CPW to West End. We've focused on under $1million and maint under $2000 a month. The finishes have been nice, but the space and family growth is a concern."

Yeah, that's a tight search.

searching for a family is indeed a tight search.. it's so hard to find a man of your dreamz... and what if you are into 3somes... do you get a 3bdrm or will living together kill the kink? And what if the partner wants to adopt many kids... then what about housing... and god forbid one is a closet mormon.. or a Jon/Kate freak.... Questions questions.... but the greatest one is never asked... where will NYC RE be in 2 yrs....

just discovered a very useful calculator to help evaluate buy vs. rent:

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

clsm -- read the comments -- the calculator underestimates the monthly maintenance costs of coops and condos

Bulls: Always buy. Always.

Bears: You are an IDIOT to buy.

Miette - you must have misunderstood my comment or are a sales agent. Go to your favorite rent vs buy calculator, lug in a number from -2% to 2% under the "future expected appreciation value" in the buy calculator and voila - renting is ALWAYS cheaper than buying. Or they could have taken your advice in 2005, bought and be in pre-foreclosure by now.

ok, so renting is cheaper. got it.... now what? I have mentioned 2025 Broadway before b/c of its size of apts and people have pu-pued it due to noise. But those apts are true 2bedrooms! The size is amazing and the rents aren't terrible (in my opinion, for size and location). There's one listed now for $4999. 201 West 72nd for $5195 isn't bad, but a bit on the smaller "living space."

If you don't require renovations, clsm, then there are many more. But the unrenovated have the old white formica kitchens, which I personally can't do anymore - have one now and it's a constant battle between me and the kitchen floor and counter.

NYCApt1234 - I checked out 2025 Broadway. I didn't think it was loud - not in the apt at least. Very quiet actually. The living room/dining area is quite large, but the bedrooms are small to average.

I have personal experience living at 2025Bway. It's no louder than any side-street facing building in the area. Having said that, people on higher flrs facing Amsterdam have said that the noise on those flrs is bad. Low-medium-ish floors facing Bway is fine.

Hey Jason10006: Lotsa bulls on here, and not a single one says buy. Did you post to the wrong thread?
Tina
(Brooklyn broker)

balh blah blah... dow 1000pts..blah blah blah.. .I'm going all IN.. .blah blah blah...

wait for it... wait for it.... wait for it....
FLMAO