Rentals of the Day: Prospect Heights

#2 looks sweet but 35 hundo for a 2 bed in prospect heights? say what?

Posted by: guest at January 23, 2008 11:21 AM

The rent will be $0 once AY is built.

Posted by: guest at January 23, 2008 11:28 AM

#2 is pretty damn big and has a garden and closer to Carlton. I could see that pulling similar rents as north slope.

rest seem pretty decent.

Posted by: guest at January 23, 2008 11:31 AM

I like #2 best.

Best location of the bunch. And 1500 sf is HUGE!

Posted by: guest at January 23, 2008 11:34 AM

Prospect Heights has the best lot sizes in brownstone brooklyn. If you get a graden apt there you are blessed...

Posted by: guest at January 23, 2008 11:42 AM

#2 Is a duplex and has a private garden. It sounds like it is half of the brownstone so that would account for the high rent.

Posted by: guest at January 23, 2008 11:50 AM

But there's a spiral staircase in #2 which makes it less appealing for families. It would be a good unit for a couple, or a single who needs a large at-home work space.

Posted by: guest at January 23, 2008 11:57 AM

Interesting comparison to what the cost of buying would be.

If the total yearly rent is $24,000, then that's equal to the interest-only payment at 7% on a $350,000 loan -- not even including any common charges, taxes or maintence costs.

Accordingly, from a renting versus buying perspective, the maximum that you should spend is $350,000 for a 2-bedroom -- probably less, because of the common charge, taxes, and maintence costs.

So, the average 2 bedroom in Prospect Heights, priced accordingly, should be around $275-325K. Otherwise, renting is more economically sound than buying.

Posted by: guest at January 23, 2008 12:25 PM

there is some logic in comparing cost to own vs. cost to rent, though 12:25's math of comparing to a 7% interest only loan (and knocking off something for cc, tax, maint) is not a completely fair comparison. If you do use the oversimplified formula, then the nice one (only one that anyone likes -#2) for 3500/mo. correlates to a $600k price.

Posted by: guest at January 23, 2008 12:44 PM

and that 1500sqf apartment would sell for way over 600k. Buying is for suckers.

equity my ass

Posted by: guest at January 23, 2008 12:51 PM

I want to be a renter all my life and be subject to uncontrolable rent increases and be forced to move repeatedly throughout my lifetime. Doesn't that sound fun?!

Go one nabe over and save your money to buy.

Posted by: guest at January 23, 2008 1:03 PM

Yes, the calculation is simple and doesn't take maintenance, tax deductions, or the forgone interest on any downpayment into account, but the analysis is basically sound.

When I bought a coop apartment in P.S. in 1999, taking in the mortgage interest tax deduction, I was saving money every month by buying over continuing to rent. (I wasn't expecting the subsequent increase in value, I was just looking to reduce my monthly expenses.) My 10% downpayment was small, so the foregone interest earnings on that amount was negligible (and that small 10% downpayment did earn me a lot of equity I tapped into when I sold).

When I sold last year, I rented temporarily, as I couldn't buy a new place until I got my equity out of the old one. Now that I'm renting again (a really nice place, bigger than the large place I owned), it makes so much more financial sense to keep renting. I couldn't own what I rent without paying way more every month, even if I put down most of my equity from my old place (and forgoing the substantial interest earnings on that.)

Now,if you buy, you have to be counting on a sharp increase in value in the time you own a place (which you can never really count on) to offset the additional monthly expenses you take on - otherwise, it isn't worth it to own. Even though I'd like to have my own place again to do with exactly what I want and be able to stay indefinitely, the practical side of me can only justify buying in a place and a market where it also makes financial sense.

And renting has the added benefit of not having to worry about coop self-management or making repairs inside my apartment anymore.

- A Happy Renter (for now)

Posted by: guest at January 23, 2008 1:10 PM

We own, and I've always owned not rented starting in my late 20's, but I still say it only makes financial sense to buy unless you're staying in the place at least 7 or 8 years and it's big enough to grow into be comfortable long term. The whole flipping every two years thing was an odd phenomenon that's over now. You can't expect to do that all the time. I also think some people especially those with children, feel pressure to buy even when they can't really yet afford it. Because they feel like bad parents or whatever if they don't own their home. Which is a stigma that didn't used to exist in NYC, which used to be a city of affluent renters.

Posted by: guest at January 23, 2008 1:21 PM

I think owning vs renting is a psychological issue even more than a financial one. The renter is looking forward to the future -another city, a bigger apt, a marriage - whatever and values the freedom and lack of issues such as repairs. The owner has the lord or lady of the manor psyche - it is their piece of turf. Owning a BS can be a pain but the pride of ownership is tremendous. When you come down the staircase or look in the huge parlor floor mirror you feel great because it is your house. If you are talking about white box apartments in larger buildings this feeling may be somewhat diminished but is still present. So I think if you have money for either buying vs renting is not just dollars and cents.

Posted by: guest at January 23, 2008 1:27 PM

i prefer owning.

i don't want to keep moving like i used to...

from manhattan to park slope to prospect heights to bed stuy.

what was next, brownsville???

now i have the same monthly payment for the next 30 years and couldn't be happier about it.

Posted by: guest at January 23, 2008 1:31 PM

1:27 & 1:31: couldn't agree more. It's as much of a psychological benefit as it is a financial one.

Posted by: guest at January 23, 2008 1:37 PM

i guess I dont plan on staying in one city my entire life.

or even the same country.

maybe i'll by when im 40

Posted by: guest at January 23, 2008 1:47 PM

i don't necessarily know if i'll be in one city my entire life either, but i'm too nervous to wait till i'm 40 because if i don't start out with a small place now and work my way up, i'll never be able to jump into the market...even with a major price correction.

in all likelihood i do want to be in nyc for the majority of my life and want to make sure i'm not priced out completely.

that would be sad.

depite the economic woes, it is a very exciting time to be living in brooklyn, in my opinion.

just had a friend visiting from iceland this past weekend on her first nyc visit. she was blown away by brooklyn...said the spirit of culture felt like reykjavik.

and i know everyone likes to rag on it, but she really fell in love with park slope.

Posted by: guest at January 23, 2008 2:12 PM

2:12, your statement:

i'm too nervous to wait till i'm 40 because if i don't start out with a small place now and work my way up, i'll never be able to jump into the market

is really interesting. That's the sentiment which has actually driven the bubble -- buy now before it's too late! In two years, I wonder if the common statement is going to be: I don't want to buy now, because I'm too afraid that I'll lose too much money.

Only time will tell.

Posted by: guest at January 23, 2008 2:20 PM

2:20...

i would agree that the statement would be scary if we were in des moines, iowa.

but as a musician living in nyc, buying a home in nyc is not necessarily something i thought was a god given right.

i live in this city because to me it has the best of everything.

owning even a small slice of that would be great. just like i wouldn't expect to up and move to london and expect that i should be able to buy a 1 bedroom on my salary.

i knew all this going into my profession and i do it because i love it. i feel lucky, but it also probably means that i will never own a 3 million dollar house. and i am just fine with that.

i like small, efficient spaces, luckily.

Posted by: guest at January 23, 2008 2:27 PM

People who do plan to live in NYC their whole lives should be nervous about being 70 years old and renting. The world is not kind to the elderly being pushed out of rental apartments. I have a friend who never tried to buy when he was younger, he's single and single for life, now he's 50 years old and could never afford to make the jump to buying. When he could have done so 20 years ago when all his friends bought a place. Now what does he do?

Posted by: guest at January 23, 2008 2:31 PM

berlin has cheap rents. im moving there

Posted by: guest at January 23, 2008 2:39 PM

your friend moves to Tampa

Posted by: guest at January 23, 2008 2:45 PM

yes, that scares me too, 2:31.

and as i get older, i do think i'll want to be here in nyc.

i'm not the retire to florida type.

florida scares me.

2:39...berlin does indeed have cheap rents. nice city, but VERY different from nyc. do some research before you move. i considered it also, and found it a nice place to visit, but not somewhere i'd like to live.

you have to have an incredibly good sense of humor to enjoy living in berlin. you can never quite escape its past.

we are all lucky...for all of its quirks...new york city really is an amazing place to live. once you leave this country it really rings true when i encounter people in europe or in argentina or in dubai...EVERYONE wants to live in nyc.

we already do. let's be thankful and not let all this economic news ruin that for us.

start saving some money and enjoy what this city has to offer.

Posted by: guest at January 23, 2008 2:46 PM

NYC would be perfect for me in every way were it not for noise as a quality of life issue. Our melting pot experience means too many people who do not value the concepts of peace and reflection and consideration of others. Plus there's the construction noise and traffic. I really hope the city keeps working on noise control for its residents. Every single person I know has or has had a serious noise issue in NYC whether at home or the office. It's really terrible.

Posted by: guest at January 23, 2008 3:07 PM

^ are you serious?

8 million people live in a very small area which causes noise.

Posted by: guest at January 23, 2008 3:18 PM

I live on a North Slope block and it is quite quiet. Enough for me, anyway. Almost too quiet. I have to sleep with a humidifier on to create a little white noise. Certainly parts of this city are unbearably noisy. I just saw a cop the other day behind a car who was honking, in the distance seeing the sign that said there was a $300 fine for honking. I don't get it. The city needs more money? They could probably pay for the 2nd Avenue subway with the amount they could collect on honking fines alone!!

I just heard that the mayor is really going to try to crack down on noise and emphasized that in his new iniative to start having 311 accessible via the internet.

Posted by: guest at January 23, 2008 3:21 PM

north slope is very quite. The only noise is my damn radiator.

Posted by: guest at January 23, 2008 3:32 PM

We lived in North Slope and had a loud TV next door; next building mind you, not just the next apartment, and we could still hear it clearly. On the street outside the traffic noise was terrible with all the honking and music coming out of windows. Oh and our favorite, the guy up the block who has the loudest motorcycle you've ever heard, which he'd ride up and down the street. Probably removed the muffler. To be cool. Like Fonzie. Motorcycles are so dorky.

Posted by: guest at January 23, 2008 5:27 PM

vespas are cool, though.

would love a baby blue one, myself.

Posted by: guest at January 23, 2008 5:38 PM

Vespas are cool (and quiet). But motorcycles are total mid-life crisis vehicles. Think Jay Leno. gag.

Posted by: guest at January 23, 2008 5:56 PM

Over the long-term, rents always increase but your mortage payment will not - if you have a traditional mortgage. Even if your mortgage payments are higher then an equivalent rental now, in the long run, you are better off owning and paying a mortgage than renting becasue, eventually, the rent will be more expensive.

Posted by: guest at January 23, 2008 6:10 PM

"rents always increase but your mortage payment will not"

But your taxes, co-op maintenance and/or condo fees will go up. Or your upkeep expenses if you own a whole house. I'm not recommending that people rent. Just pointing out that your expenses do NOT stay flat even if you own.

Posted by: guest at January 23, 2008 6:23 PM

Noted, 6:23, but - excluding the tax benefits of owning a home vs. renting - your mortage payment each month will not change. Rents will increase, not only to cover the underlying increase in taxes and other costs - which all owners of property must incur - but the owner of the rental property will want an additional increase to cover a rate of return on his or her investment and offset the effects of inflation on basic services which is not even a part of the equation for someone with a mortgage.

Of course, this does not even consider the supply/demand effect on rents which a home owner is no longer subject to as they are out of the market in that respect.

Posted by: guest at January 23, 2008 7:20 PM

the rent vs buy equation has gone completely bonkers in much of Brooklyn.

buying is MUCH more expensive than renting, even with interest deductions taken into account. it would take several years of continued high price growth in rentals for it to balance out.

the rent vs buy equation still works in much of manhattan, however.

Posted by: guest at January 24, 2008 10:41 AM

i bought in brooklyn in 2006 and my mortgage and maint are definitely less than any comparable rental.

with tax deductions, it's a relative steal!

Posted by: guest at January 24, 2008 10:48 AM