Manhattan - Still Cheaper to Rent

How exactly do they figure this?

I heard from a top real estate expert at Prudential that it's actually 20% more expensive to rent in Manhattan than it is to buy. That makes more sense to me since rents are skyrocketing and people arent' getting free months anymore, meanwhile interest rates are super low and apartment prices are dropping.

Lmfao

I've found lots of cases in Brooklyn where after tax deduction, the monthly cost is a lot cheaper then rent and part of that is principal too!

it's not "Still Cheaper to Rent"

it's always Cheaper to Rent in the last decade

I just googled "caonima". Interesting: http://www.google.com/search?q=Brooks2

swe is still trying to convince himself with faulty data analysis that he has been better off renting.

Like other statistics of this nature, these "on-average" analyses come with so many exceptions that they can't effectively dictate our purchasing decisions. It will all depend on what the particular unit costs when purchased versus rented, to that particular individual.

A friend recently purchased a condo unit in a "hot area" for $950k (CC + taxes: $2k/mo), which had consistently rented for $5.5k to $6k/mo in the bldg. w/o notable vacancies.

At the morgage rate of 3.85%, if he were to have put down 10%, the monthly mortgage would have been $4k, resulting in a total monthly cost of $6k, which is the "upper end" of what he'd be paying as a renter of the same unit--without considering the tax benefits of purchasing or the cost of purchasing, etc.

But he put down 50%, which made his mortgage payment $2.2k/mo, resulting in a monthly carrying total of $4.2k. Since $5.5k (let alone $6k) profoundly exceeds $4.2k, it is absolutely false to state that renting is always cheaper than owning in Manhattan. No CD or investment can guarantee returns to make up for this $1.3k to $1.8k/mo difference, even if he were to have invested the downpayment on something else.

It may however be true, though, that, ON AVERAGE, renting is cheaper than buying in Manhattan, aggregating the data for all apartments from Battery Park City to Washington Heights, super-luxury condos to "tenements," studios to 4BRs, etc. etc. Going from that to "buying makes no sense in Manhattan" (or "buying is always better," for that matter) would only indicate one's inability to account for individual variability.

with today's rates, you will never receive 3.85% on investment property with only 10% down and over $800K loan. put the number at 4.5% even with 20% down. then run the numbers.

ab -- have you seen 4.5% with 20% down on a >$800k loan? That too seems a bit conservative. The pure numbers may suggest purchasing in Queens may be cheaper than renting. But it all depends on a series of questions and circumstances, specifically lifestyle, age and domestic priorities. IMO, staying in Queens, you can't compare purchasing in Richmond Hill vs Renting in Astoria.

The take away is and almost always will be, do your due diligence and run the numbers 10 times over.