Professional couple rent long term, with a family?

You should expect a landlord to try to extract the maximum amount of rent increase at lease-renewal time. You can try to negotiate and, depending on the condition of the market at the time, you may have varying degrees of success. But a landlord is not in the business of being charitable. Why shouldn't they increase your rent? I don't know if "screwing" is the right word if you're receiving a decent product at a level you can feel comfortable paying; increases notwithstanding. If you don't want to go that route, explore buying but know that mtnc/taxes go up too.

People here will insist that if you're not in the six-figure top-5% income class that you have to rent but I'm a believer in the ability of diligent, determined people to own and come out ahead. I say you should be willing to live in a small apartment and be ready to live a no-frills life and pay down that mortgage aggressively.

Unless you can pay cash for your home, you're either renting an apartment from a landlord or renting money from a bank. Renting money from a bank is cheaper and you can reduce your "rent" at any time by paying down the debt. Your landlord isn't going to suddenly reduce your rent for any reason.

Hoodia, the answer is "yes". You just need to learn how to avoid LLs who engage in the game of rent chicken (i.e., raising rents above markets betting you won't move).

Ideas:

- Long-term leases.
- Rent from individuals.
- Avoid big managed buildings that play rent chicken & won't be reasonable on negotiations. E.g., I know some people who signed an apt in 2007 and pay slightly less now (in response to market), having renewed a few times.

"Is it possible to be a long term renter in Manhattan for a upper, middle class / professional family, or will landlords eventually screw you with high annual increases?"

Sure, it's possible that you'll get a landlord who doesn't screw you. What isn't possible is knowing in advance that you won't be screwed.

i disagree with triple_zero as most of the purchases in manhattan have carrying costs that are half of what the rental cost would be and therefore tied to similar cost increases. renting in nyc is very cheap compared to purchasing here, basically a steal when u factor this in.

i have been renting for 8 yrs in the $3.5-5k range with relatively minimal price increases (overall). some years are bad but there were also times where my rent dropped. i moved a couple times to different apartments but have kept in touch and have an idea of the overall progression of price for each of the units i lived in. for ex, the place i rented in 2006 in union square:

$4k (900 sq ft) in 2006-07
$3800 for 2008 & 2009 (they wanted a 3% increase but i negotiated it down after the mini-crash)
$4k for 2010
$4,120 for 2011 (already moved, this is what the apt was listed at)
$4300 now (i don't live there anymore but have seen it listed at that price several months back)

my current apt was $4,400 2 yrs ago, $4,535 last yr and $4,775 this year. i highly suggest though that if u go the rental route u go well beyond the 50x requirement or you will feel the pain of even a 3-4% increase let alone a 10-15% increase. if u rent at 100-120x (or preferably higher) of rent, any small increase should not affect you. also if u r in a good industry you should be able to increase your income as well much beyond the rental increase anyways.

i don't know how the numbers work with a family so this may have not been helpful as 2 & 3 bdrm apartments may have different price dynamics. however if you stick to a very large cushion of income to rental price, i don't think you will notice the difference. i think buying only makes sense in mnahattan (or any other market with 20:1 ratio or above) only when u have enough cash to never work again; in other words, you don't care that much about the investment return because u r rich enough that the poor return on ur real estate will be buffered by other investments.

Absolutely possible - just need to be mentally prepared every 2 years to potentially having a big increase that you can either take or move. There are good landlords and bad landlords and I've had both

Wait--am I crazy or is this the second time you've posted this topic? What was wrong with the previous answers?? Just wonderin'...

Yes. I know many families who are long-term renters.

>Ideas:

- Long-term leases.
- Rent from individuals.
- Avoid big managed buildings that play rent chicken & won't be reasonable on negotiations. E.g., I know some people who signed an apt in 2007 and pay slightly less now (in response to market), having renewed a few times.

flarf seemed to have the right answer:

>Sure, it's possible that you'll get a landlord who doesn't screw you. What isn't possible is knowing in advance that you won't be screwed.

when renting, it is easier to "size" the apartment to your current needs. you can be free to live in areas where the neighborhood is nice, but the schools are bad while your child doesn't go to school. when you get a neighbor who drives you crazy, you are not "stuck" because you own.

on another note, you can be always on a lookout for that rent stabilized apartment approx 6 months prior to each lease expiration. once you get a 2 bedroom in the desired area, you're set for a signfificant amount of time.

I know families who are long term renters. It really depends on the situation. I think for the most part your rent is less likely to go up to or above a market rate if you're a long term tenant, but you can't ever count on that. In my experience it's the big companies/buildings who are less likely to negotiate rent. I rented from a horrible slum lord for 6 years and my rent only went up about $100 in the entire time I lived there because they negotiated. Then I moved to an immaculate building owned by a public company and they wouldn't budge and gave the largest increase I've ever heard of. My friends who rent in large new buildings have all experienced the same thing.

"but I'm a believer in the ability of diligent, determined people to own and come out ahead."

Diligent, determined people would recognize that sometimes renting is cheaper. If you assume that owning is always better, the research isn't very diligent.

Some landlords are better than others at capping increases. Mine wants to keep good tenants, and has raised the rent over the past few years, but I'm still way below others moving in now.

"If you assume that owning is always better, the research isn't very diligent."

Over the long term, owning IS always better.

Matt, how are you qualified to say that? You haven't even been around for the long term.

hoodia
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Is it possible to be a long term renter in Manhattan for a upper, middle class / professional family, or will landlords eventually screw you with high annual increases? I'm taking about today's late 20s to 30s aged couples who want to be here long term with a family, have good income but aren't gazillionaires. Normal market apartments. Is it possible for more than 5 years or so?

Hoodia, if you can't afford it here, why don't you just leave instead of bitching about it. no shame in not being able to make it in the big city.

Jim aren't you from New Jersey?

"Over the long term, owning IS always better."

Over the long term, Shiller found that the real return on real estate is 0.
Want to try that again?

And, are you really going past when people die? In terms of useable lifecycle, we have already seen how buying doesn't make sense in many cases.

The only people that always benefit when buying RE are RE brokers.

That's a fact jack!

"Over the long term, owning IS always better."

There have been about 500 articles by various experts and economists posted here over the years that shows this not to be the case. Its like religion with most of you.

This question gets really skewed if you ask about the time in the professional's career. Sure, if you're established and pulling in huge bucks than it is easy to say that it is not a problem, but for a young professional, wanting to start a family and paying off their debt? Good luck. Every person I know in this situation moves to Brooklyn as they want the predictability of home ownership and the obvious economic benefits of owning.

"Over the long term, owning IS always better."

"Over the long term, Shiller found that the real return on real estate is 0.
Want to try that again?"

You're both right. A 'real' return of 0 means that you've successfully protected yourself from inflation, which would otherwise destroy your savings and leave a renter scrambling for a salary raise every time the rent went up. I'll happily take a "real return of zero" any time.

"Over the long term, owning IS always better."

For those of you who use a discount cash flow rate of negative or 0% I could see that this may be true.

http://www.multpl.com/case-shiller-home-price-index-inflation-adjusted/

As you can see from 1890 to 2012, home prices have increased by a total of 27.98%; feel free to calculate the annualized rate if your calculator is able to calculate the 122nd root of 27.98%. I'll help you out, it is well under 0.5% which is less than what a high-yield interest savings account offers.

I will grant that this is a short-term study only covering 122 years. Perhaps one going back 1000 years may even cause those who invest solely in savings accounts to reconsider their high-tech investment analysis.

Bill Gross made the same error as you. You are talking about appreciation in contrast to investment return which would also include the value of living in the home (ie the imputed rent).

That about sons it up. Next.

Sums

triple, for most people their home is their ONLY investment. a real return of zero is shit. when with only a modicum of intelligence you would have been able to find much better options for your money. many of the people on this board should be more sophisticated investors, but have never bothered to become such.

buying a home makes sense for many, sometimes from an investment standpoint (although the lack of mobility should always be considered), sometimes from a consumption standpoint, and ideally from a bit of both. a good cost-benefit analysis, and learning to attempt to do one, although variables obviously can change, sometimes rather whimsically, is a very valuable skill.

but buying a home makes absolutely no sense for many, i don't care how much some say it provides satisfaction, etc. living on the edge, stretched beyond your means, is no way to live. banks encouraged that during this bubble. were people dumb? absofuckinglutely, but you have people who can put together a sentence here who religiously believe that owning is the only way to go. and i'll repeat, commercial banks had a long-standing reputation for being conservative, and not giving loans that people couldn't afford. there was almost no press about this issue, and when I found out about the piggy-back HELOCs that were VASTLY used in 2005-07 or 08, I was stunned. If you don't think that there are some issues, particularly in the 2006-09 closings, that could reverberate rather nastily, at least in certain buildings, you're truly naive.

HB, give me a f'ng break. I wasn't talking about this one scenario, I was talking about subsequent comments by dealboy.

"ou're both right. A 'real' return of 0 means that you've successfully protected yourself from inflation, which would otherwise destroy your savings and leave a renter scrambling for a salary raise every time the rent went up. I'll happily take a "real return of zero" any time."

So stupid. All of the articles I reference above assume that the money one does NOT spend on a down payment, insurance, maintenance etc. - net the tax savings - are invested in some combination of the S&P and bonds.

See NYC1234's post above - if you put 20% of the home price in such investments that is the 0.5% right there. If in ADDITION you save money net-net for the first 3-7 years because rent is cheaper for an equvalent place than ALL costs associated with owning, even better.

Yes, owning in NEW YORK or SAN FRANCISCO has been better than the average nyc1234 cites above. But so too has investing in AAPL or EMC. Or for the last decade, good old USTs.

>absofuckinglutely,

Why do you write like that? It doesnt make you seem smarter. It doesn't make you easier to relate to. It doesn't emphasize your point any better than actual words in the English language.

why do you exist?

>Or for the last decade, good old USTs.

Ah, U.S. Tobacco. Good divident producing stock.

>But so too has investing in AAPL or EMC.

After the year 2000, people were tired of losing money in stocks, including AAPL, EMC, and Cisco, Intel, ... so they put their money into real estate. We've had recent 10 year stretches where broad baskets of stocks had zero appreciation, and significant volatility. This year, they are up. Last year, they were flat.

>why do you exist?

That's an interesting question.

hb, i don't care what you think about my writing. why do you bait people endlessly, and repeat things incessantly that were written years ago? it doesn't make you seem more clever, or more interesting, or more intelligent (although maybe more anally retentive). do you care what I think?

in real life I would say what I write. if you would say what you write it would sound like have a stick up your ass.

i missed the you in my sentence. but you get my drift.

>if you would say what you write it would sound like have a stick up your ass.

Is that kind of like what you'd sound like if you inhaled helium from a balloon?

>i missed the you in my sentence. but you get my drift.

Oh I do, I do.

Nice try, hb. but you really didn't answer, did you?

Which question?
This one, "do you care what I think?"

The answer to that question, by the way, is yes, I do care what you think.

hunters burg is always so proficient with words when it suits him. others, beware.

columbiacounty, cheated his partners, customers, and family.

Any evidence?

That's your defense?

I'm on trial?

Who the fuck are you?

You answer my question with two questions?

the meds are coming soon.

it will be ok.

Is there a theme song for Columbia County? Maybe I could hum it.

not until you get the meds. it will tire you out. you'll sleep well. watch. it will be ok.

Columbia County and you, perfect together.

that makes no sense but its all ok. don't worry. any time now.

Columbia County, I'll say it twice. Columbia County, Columbia County.

sounds like sleepy time for you, big guy. tomorrow's another day. another chance to torture and distort. sleep tight, mother fucker.

Did you just threaten me?

get a staff member immediately. you must take these delusions seriously.

This is no longer about the staff.

You made a threat on this thread and on another thread.

i guess your therapy isn't working. oh well.

Are you revoking your threat or just changing the subject?

We can't just ignore your threat.

We don't anticipate any investment like returns from buying, but all the people we know in our age category have bought, are buying, or will buy in the next year our so. Its about getting on with family and life. You can't move to the suburbs and be a renter.

"So stupid. All of the articles I reference above assume that the money one does NOT spend on a down payment, insurance, maintenance etc. - net the tax savings - are invested in some combination of the S&P and bonds. See NYC1234's post above - if you put 20% of the home price in such investments that is the 0.5% right there. If in ADDITION you save money net-net for the first 3-7 years because rent is cheaper for an equvalent place than ALL costs associated with owning, even better."

And yet again, the folly of comparing apples to oranges.

HOUSING dollars are not INVESTMENT dollars.

Ever.

Scary that NYCMatt is the one who articulates it best.

"http://www.multpl.com/case-shiller-home-price-index-inflation-adjusted/

As you can see from 1890 to 2012, home prices have increased by a total of 27.98%; feel free to calculate the annualized rate if your calculator is able to calculate the 122nd root of 27.98%. I'll help you out, it is well under 0.5% which is less than what a high-yield interest savings account offers."

NYC1234, I think you're missing something. Home prices as measured by the Case-Shiller index have increased 27.98% *after correcting for inflation*. That small gain per year (it's 0.202% per year; Google can solve it easily enough: http://www.google.com/search?hl=en&q=1.2798%5E%281%2F122%29 ) is what you get *after* home ownership has successfully protected you from the inflation that would have eroded your savings.

Will the stock market beat that? Maybe, maybe not. If you put all your cash in an index fund in 1929, you lost your shirt in the coming years and didn't get back to even until 1954. From 1965 to 1981 the Dow basically went nowhere -- and the nominal value of those stocks were being torn to shreds by inflation. Just last year we had a Dow that was lower than it was in 2000 -- and consumer prices and rents that are a lot higher.

I have little tolerance for that much risk. And I hate seeing inflation steal the value of my money. Give me real estate, and the safe, steady return that it brings in, any time.

"HOUSING dollars are not INVESTMENT dollars."

They most certainly are. Step One in retirement planning is making sure you have a roof over your head when you're old. What better way to do that than to own that home free and clear many years in advance?

Triple, I agree with you in terms of retirement planning, but it's still a stretch.

Doing a straight-line comparison between the $2000 I'm spending on mortgage/maintenance versus what the $2,000 could be doing in the market is stupid (including any down payment I've made), since I still need a place to LIVE, regardless.

And I've long maintained that the only way to have a decent retirement in this city is to OWN your apartment outright, paying only maintenance. It's insane retirement planning to assume you can retire on 1/4 of your working income and still be able to afford any kind of market-rate rent.

"And I've long maintained that the only way to have a decent retirement in this city is to OWN your apartment outright, paying only maintenance. It's insane retirement planning to assume you can retire on 1/4 of your working income and still be able to afford any kind of market-rate rent."

+1; I could not have said it better myself.

"HOUSING dollars are not INVESTMENT dollars."

"They most certainly are. Step One in retirement planning is making sure you have a roof over your head when you're old."

Sorry, but no. So is eating food. Doesn't make it anything other than CONSUMPTION. That is the opposite of investment.

"And I've long maintained that the only way to have a decent retirement in this city is to OWN your apartment outright, paying only maintenance. It's insane retirement planning to assume you can retire on 1/4 of your working income and still be able to afford any kind of market-rate rent."

Of course, since the latter has been cheaper for years, the logic just doesn't hold... if it is cheaper to rent, it is cheaper to rent.

If they could expand the rent control laws, even at current prices, it world benefit families as well as retirees. Obviouslythere would have to be sensible starting prices, and as a result much better condition places than the current places which look like they are inestate condition.

"if it is cheaper to rent, it is cheaper to rent."

Rent is not, and has never been, cheaper than monthly maintenance.

"If they could expand the rent control laws, even at current prices, it world benefit families as well as retirees. Obviouslythere would have to be sensible starting prices, and as a result much better condition places than the current places which look like they are inestate condition."

That's cute.

Maybe they should plant money trees in Central Park, too! And the squirrels will poop out lollipops! And all will be right with the world!

*ahem*

Back to reality.

Rent control laws are what got those places into "estate condition" in the first place.

You think (zero-rent-control) Detroit and Baltimore and the like have a shortage of estate-condition homes? I don't know about Pittsburgh ... no one does.

What would help would be Coop City type middle-income complexes all over southeast Queens, along with bus rapid transit to connect them to New York.

> "if it is cheaper to rent, it is cheaper to rent."
> Rent is not, and has never been, cheaper than monthly maintenance.

Yes, because apartments are free! If THAT is the premise of your argument, you already lost.
Plus, I have seen situations where it was.

Have to say, it has been SO much cheaper to rent in the last few years.

As discussed before the co-op fees in manhattan are half of the rental price. add upkeep and you are at about 75% of rental cost. keep in mind those fees are inflation based as are the rental costs.

i agree you have to factor in price of living. but ultimately the whole concept is based upon your discount cash-flow rate. if you use 8% as a hurdle for your money, buying is not a good investment. if you use 0% of course, buying is not horrible but if growth of your money at the inflation rate is your ideal...!

i would rather have a large pile of cold hard cash over time. with reasonable growth rates you can easily beat the housing market where it is currently and buy cash down if needed once you have met your retirement goals.

i could point to all the long-term data showing the rate of return of stocks & bonds beats real estate over time (especially the long run) but i think that everyone is aware of this by now.

the mistake everyone is making is assuming this (buying a property in manhattan or prime bk) is the best deal you will get. if you think stocks, bonds, or real estate in the US at current prices is the "best" investment deal of all time you will not have dry powder left when the time is right. i buy investments based upon yield. the yield right now is crap.

"As discussed before the co-op fees in manhattan are half of the rental price. add upkeep and you are at about 75% of rental cost. keep in mind those fees are inflation based as are the rental costs."

Wrong.

Maintenance fees INCLUDE "upkeep" (unless you're counting the cost of a maid, for which you'd be paying yourself in a rental anyway).

And unless you're comparing apples with oranges (maintenance on a Classic Six on Fifth versus a rental in Hell's Kitchen), you're way off.

***
"i would rather have a large pile of cold hard cash over time."

Good luck accumulating that large pile of cash paying market rents.

***

"the mistake everyone is making is assuming this (buying a property in manhattan or prime bk) is the best deal you will get. if you think stocks, bonds, or real estate in the US at current prices is the "best" investment deal of all time you will not have dry powder left when the time is right. i buy investments based upon yield. the yield right now is crap."

And yet AGAIN, housing dollars are not investment dollars.

maintenance fees are suppose to include upkeep of the building, but you know that almost all building assess once large 'upkeep' items pop up. So you have to take that into account. In addition, you have to pay for upkeep of your apartment which certainly is not included in the maintenance fee.

I think in our demographic, you rent for a while when you need flex, then you settle down. You can add some timing components based on the rent to buy ratio.

so if 30 yrs down the road, ur kitchen looks like total crap and the bathroom is rotting, the co-op fees are going to cover your internal wear and tear? the co-op fees are for shared space not internal space. second the fees are $2 per sq ft on average. if u feel that u need to do no repairs u r still at half the cost of renting. i am talking only about manhattan below 96th st btw, obviously in other areas the rate is different. if u think that $2 is way off, please show me, i genuinely would like to be wrong about this.

market rent is not the problem for accumulating cash. rent is simply an expense of living. it is a pretty bad investment for your dollars if you pay so much rent that you cannot reasonably save 10-20-30-40% or more of your salary. pay urself first, ie save, and then make expenses. u r naive if u think people are unable to save at current market rates!

u can call whatever u want an investment. doesn't matter. money is fungible. if it is gone due to a bad investment/purchase in an overpriced apartment, the bank is not going to fork the cash back to u. u will face opportunity cost & lost $ whether u like it or not. second, if u r buying with a mortgage and not cash, u r simply buying a noose for ur neck. make sure it is loose enough. buying with a 30yr mortgage is like renting for 30 yrs except ur landlord is the bank!

it is not by chance that some of the savviest business people choose to rent instead of buy when the price is not right. when it comes to stocks, bonds, or real estate, you should learn how to figure out what a good price is for u, ur budget, and ur future expected net worth and let the price come to u. following idiots off of a cliff is not a good strategy!

Nyc1234 speaks the truth

what about your Truth?

http://streeteasy.com/nyc/talk/discussion/23233-columbiacounty-im-no-slave-to-truth

brooksie....who speaks for you?

I answered you on the other thread. It was a typo. It should have been dope.

don't bother. i get it.

i made and banked 7x my initial investment on my previous sale and only owned 5 years. That is not necessarily duplicated - a lot depends on the usual - buying low and selling high. If you can find deals to buy in areas that you think you will see an upside AND be happy living there to wait it out, then owning brings you far ahead.

I am not an astute stock market investor, I have already made and lost too much in the market, and will just sit on my current investments, but because I'm a better real estate investor, I trust that my current property (which on paper, via comps and an appraisal is up), I think that this place will fund kids college and retirement. One huge bonus of owning in NYC is that if you can cash out up, you're taking NYC dollars to somewhere else for retirement. Lots of great weather places to move in the US that have cheap real estate.
Also, for my monthly mortgage payment + common charges and expenses, there is no rental available in my neighborhood at that monthly price that's as big or as nice. and, that's before the mortgage deduction. Taking in the deduction, really far ahead of renting.

I didn't worry too much about schools. Once you live somewhere, you figure it out. All the data on schools that's out there about NYC publics is messed up - frequently it doesn't provide the real picture. Your neighbors with kids will show you your options. You have to just settle in with your property and then you make it work.

Additionally, it's extremely important to me to have my space renovated and decorated well. It's a money loser to do that in a rental because you'll move too much.

How about an example or some numbers or a neighborhood at least

There were two numbers in his first sentence.

Talking to yourself is a bad sign