Not only according to me, but according to trulia: "Home prices have come down in New York, but it's still a lot cheaper to rent," said Shuman. "The average two-bedroom rental is over $3,700 a month. By no means is that cheap, but it's a lot less than a mortgage would be on a $1.7 million property." Along with Manhattan -- which topped the list of cities where it makes the most sense to rent --... [more]
Not only according to me, but according to trulia:
"Home prices have come down in New York, but it's still a lot cheaper to rent," said Shuman. "The average two-bedroom rental is over $3,700 a month. By no means is that cheap, but it's a lot less than a mortgage would be on a $1.7 million property."
Along with Manhattan -- which topped the list of cities where it makes the most sense to rent -- higher home prices and better job opportunities are making renting an increasingly attractive option in cities such as Omaha and Seattle as well.
http://money.cnn.com/2010/10/08/real_estate/rent_vs_buy/index.htm
And, of course, my favorite quickie-indicator:
"In calculating whether it's better to buy or rent, economists use a rule of thumb: If the home price is 15 times higher than the annual rent for a similar property, it is better to rent."
The only ones left in denial are LICC and Juicy, wed the latter to the "New Economy" of real estate (hahahaha), and the former to a tax deduction that does nothing but increase the price of properties.
HAHAHAHA!
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Response by JuiceMan
about 15 years ago
Posts: 3578
Member since: Aug 2007
Sure, makes a ton of sense to compare a property that rents for $3700 with a 1.7M buy. Why not $3M with a $1500 a month rental. Idiotic, no surprise that steve laps this stuff up. trulia? Hahahahaha
Also funny how steve claims he has always said 15x when all you need to do is a quick search and find what he really said...12x.
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Response by urnfna
about 15 years ago
Posts: 174
Member since: Jul 2008
Cheaper to lease a Jetta than to finance a Rolls.
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Response by w67thstreet
about 15 years ago
Posts: 9003
Member since: Dec 2008
No no no. BMW (rolls owned by bmw) mb porsche ferarri all miscalculated the residuals in 2007-2009. Their financings arms took an ass kicking. So the logical conclusion is whoever owns it and it's 'residuals' will be key going forward. This is america, where dp has no relevance to actual ownership and hence the blurring of owner/leasee.
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Response by stevejhx
about 15 years ago
Posts: 12656
Member since: Feb 2008
I said, Juicy, that the long-term ratio is 12x, and that anything over 15x was overpaying. Supported by multiple authorities. And what does the article say? "If the home price is 15 times higher than the annual rent for a similar property, IT IS BETTER TO RENT."
So, your $3700 2-bed 2-bath rental should cost no more than about $675,000. We're still a long way from there...but getting closer.
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Response by julia
about 15 years ago
Posts: 2841
Member since: Feb 2007
I just did the calculations on trula and it shows i should buy based on $2500 in rent vs. buying an apartment for $450,000 so unfotunately for me the confusion continues.
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Response by captive914
about 15 years ago
Posts: 131
Member since: Aug 2010
Yes, b/c all 2BR's are $1.7M.
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Response by LICComment
about 15 years ago
Posts: 3610
Member since: Dec 2007
steve is now turning back to his mistake-ridden rent vs. buy analysis. A $675k purchase price, assuming 20% down at current mortgage rates, would have a monthly cost, after tax, around $3000.
Comparing that to a $3700 rental is idiotic. Enter steve.
It is so easy to get steve to make a fool of himself . . .
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Response by evnyc
about 15 years ago
Posts: 1844
Member since: Aug 2008
This is a really silly comparison, for a number of reasons. The average 2-br rental was, last time I checked TRGENY reports, $4200, not $3700. It's comparing two averages. So on average, yes, maybe it is true that renting is cheaper on average in Manhattan. But comparing averages isn't particularly useful, because there are plenty of 2-bedrooms available for sale with monthly outlays totaling less than $4200 or even $37000 a month. You really have to look at the individual properties in each micromarket. In Tribeca, where rents are very high, buying the $1.7 million 2-bedroom might make sense; on the UES, where you can generally rent a 2-bedroom for substantially less, an $800,000 2-bedroom might not make economic sense.
I'm paying over $3k for a 1-bedroom. I'm looking at 2-bedrooms that cost, within a few dollars, the same to buy. I can get an extra bedroom and possibly an extra bathroom for the same amount of money if I buy. Sure looks less expensive than attempting to up my rental budget to $3700 to me.
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Response by stevejhx
about 15 years ago
Posts: 12656
Member since: Feb 2008
There goes LICC again - as expected! - spouting off his nonsense about "after tax" costs.
The articles says: "In calculating whether it's better to buy or rent, economists use a rule of thumb: If the home price is 15 times higher than the annual rent for a similar property, it is better to rent."
Where do you see "tax benefit" in that statement, LICC?
It is so easy to get LICC to make a fool of himself. The mere fact that he CHOSE to live in Long Island City is enough to convince even the casual observer of that!
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Response by alanhart
about 15 years ago
Posts: 12397
Member since: Feb 2007
Wait wait LICcomm, let me dumb it down for Steve.
Steve, the more money you pay in interest to the bank, the more tax deduction you get. Get it? You have to spend money to get rich.
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Response by 3508comm1
about 15 years ago
Posts: 12
Member since: Oct 2010
Hi alamefart, missed you recently. Not as active? Everything ok at home? Tomatoes ok?
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Response by beatyerputz
about 15 years ago
Posts: 330
Member since: Aug 2008
On his smartest day, LICC is dumber than anyone here on their dumbest day.
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Response by outahere
about 15 years ago
Posts: 7
Member since: Oct 2010
Renting totally make sense if you are going to move for whatever reason (we are moving for more space but we may move again if I start having kids). But in the suburbs when we finally go there, no way we'd rent. And also, it isn't like with all of the new buildings for renting out that the landlords are stupid, they have to have the upper hand for the most part or else they wouldn't bother.
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Response by stevejhx
about 15 years ago
Posts: 12656
Member since: Feb 2008
Thank you for explaining that, AH, but I was already aware of how rich I was getting through my 3% cash back from my Discover card.
Yes, it's true: according to LICC, the more money you spend in interest, the cheaper your apartment actually gets.
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Response by LICComment
about 15 years ago
Posts: 3610
Member since: Dec 2007
Typical steve- he thinks he is intelligent with his rent-buy analysis; people who actually are intelligent point out steve's stupid mistakes and flaws; steve then spews insults and distorts facts to try to change the subject.
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Response by stevejhx
about 15 years ago
Posts: 12656
Member since: Feb 2008
"people who actually are intelligent point out steve's stupid mistakes and flaws"
You flatter yourself, LICC. But then, of course, someone has to.
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Sure, makes a ton of sense to compare a property that rents for $3700 with a 1.7M buy. Why not $3M with a $1500 a month rental. Idiotic, no surprise that steve laps this stuff up. trulia? Hahahahaha
Also funny how steve claims he has always said 15x when all you need to do is a quick search and find what he really said...12x.
Cheaper to lease a Jetta than to finance a Rolls.
No no no. BMW (rolls owned by bmw) mb porsche ferarri all miscalculated the residuals in 2007-2009. Their financings arms took an ass kicking. So the logical conclusion is whoever owns it and it's 'residuals' will be key going forward. This is america, where dp has no relevance to actual ownership and hence the blurring of owner/leasee.
I said, Juicy, that the long-term ratio is 12x, and that anything over 15x was overpaying. Supported by multiple authorities. And what does the article say? "If the home price is 15 times higher than the annual rent for a similar property, IT IS BETTER TO RENT."
So, your $3700 2-bed 2-bath rental should cost no more than about $675,000. We're still a long way from there...but getting closer.
I just did the calculations on trula and it shows i should buy based on $2500 in rent vs. buying an apartment for $450,000 so unfotunately for me the confusion continues.
Yes, b/c all 2BR's are $1.7M.
steve is now turning back to his mistake-ridden rent vs. buy analysis. A $675k purchase price, assuming 20% down at current mortgage rates, would have a monthly cost, after tax, around $3000.
Comparing that to a $3700 rental is idiotic. Enter steve.
It is so easy to get steve to make a fool of himself . . .
This is a really silly comparison, for a number of reasons. The average 2-br rental was, last time I checked TRGENY reports, $4200, not $3700. It's comparing two averages. So on average, yes, maybe it is true that renting is cheaper on average in Manhattan. But comparing averages isn't particularly useful, because there are plenty of 2-bedrooms available for sale with monthly outlays totaling less than $4200 or even $37000 a month. You really have to look at the individual properties in each micromarket. In Tribeca, where rents are very high, buying the $1.7 million 2-bedroom might make sense; on the UES, where you can generally rent a 2-bedroom for substantially less, an $800,000 2-bedroom might not make economic sense.
I'm paying over $3k for a 1-bedroom. I'm looking at 2-bedrooms that cost, within a few dollars, the same to buy. I can get an extra bedroom and possibly an extra bathroom for the same amount of money if I buy. Sure looks less expensive than attempting to up my rental budget to $3700 to me.
There goes LICC again - as expected! - spouting off his nonsense about "after tax" costs.
The articles says: "In calculating whether it's better to buy or rent, economists use a rule of thumb: If the home price is 15 times higher than the annual rent for a similar property, it is better to rent."
Where do you see "tax benefit" in that statement, LICC?
It is so easy to get LICC to make a fool of himself. The mere fact that he CHOSE to live in Long Island City is enough to convince even the casual observer of that!
Wait wait LICcomm, let me dumb it down for Steve.
Steve, the more money you pay in interest to the bank, the more tax deduction you get. Get it? You have to spend money to get rich.
Hi alamefart, missed you recently. Not as active? Everything ok at home? Tomatoes ok?
On his smartest day, LICC is dumber than anyone here on their dumbest day.
Renting totally make sense if you are going to move for whatever reason (we are moving for more space but we may move again if I start having kids). But in the suburbs when we finally go there, no way we'd rent. And also, it isn't like with all of the new buildings for renting out that the landlords are stupid, they have to have the upper hand for the most part or else they wouldn't bother.
Thank you for explaining that, AH, but I was already aware of how rich I was getting through my 3% cash back from my Discover card.
Yes, it's true: according to LICC, the more money you spend in interest, the cheaper your apartment actually gets.
Typical steve- he thinks he is intelligent with his rent-buy analysis; people who actually are intelligent point out steve's stupid mistakes and flaws; steve then spews insults and distorts facts to try to change the subject.
"people who actually are intelligent point out steve's stupid mistakes and flaws"
You flatter yourself, LICC. But then, of course, someone has to.