lic

The New York Times has a great rent v buy calculator. It works best with your crystal ball ;) you do have one, don't you? :)

There are a lot of benefits to buying real estate (capping most of your monthly costs at historically low interest rates, the mortgage interest deduction, and building equity are just a few). There is also a lot that goes into determining whether it makes sense to buy v. rent, and unfortunately, there is rarely a clear-cut answer because, as Flutistic suggests, you don’t have a crystal ball (and neither do I). Buying typically pays off for most people in the long run in NYC unless you are forced to sell during a down cycle. Since real estate is cyclical and we are now appx. 5 years into a bull market in NYC real estate, you have to start thinking about when that next down cycle will come. Thus, in my opinion, the most important assessment you need to make is your targeted holding period. If you are looking to live in a condo for a few years and then rent it out, then I think that it absolutely makes sense to buy now because you can lock in a ridiculously low mortgage rate now, and in the future watch your equity grow as your tenants pay it off for you. If you tell me that you’re planning on flipping it in 3 years, then I would advise caution, given where the market currently is and the transaction costs involved in selling real estate in NYC.

There is a lot more to think about, as well. I probably have this conversation with a client and/or potential client at least once a week and would be happy to chat with you offline about this. Feel free to reach out.

Dan Gotlieb
Digs Realty Group
(917) 675-0037
dan@digsrealtynyc.com
www.digsrealtynyc.com