Oh, Inverted World: Renting Better Than Buying?
As prices for residential real estate were reaching all-time highs around the country back in 2005, the smart money decided to wait it out on the side lines in a rental, says the New York Times today. And even though purchase prices have fallen considerably since then and rents have ticked up, when you add…
As prices for residential real estate were reaching all-time highs around the country back in 2005, the smart money decided to wait it out on the side lines in a rental, says the New York Times today. And even though purchase prices have fallen considerably since then and rents have ticked up, when you add in all the expenses of owning (taxes, maintenance, mortgage), it’s still a better bet to rent in most markets. For buying to make sense, the article asserts, you have to believe that your local market will appreciate five percent a year for the next five years. Do you think Brooklyn, and New York City as a whole, can do that?
A Word of Advice During a Housing Slump: Rent [NY Times]
Photo by bondidwhat
12:49 said it very well, Rachel. There are parts in Brooklyn where you can still get good value by buying a coop or condo. It is hard to jump from renting to owning a brownstone, but if you research it a bit you can find good coops or condos as an interim step. That is how I bought a brownstone and how many “normal” people on this site bought brownstones. And you may find that before long you can afford to buy your own house – it might not be a fancy mansion in Brooklyn Heights, but there are many beautiful parts of Brooklyn where deals still exist. Good luck to you.
Rachel at 12:39, that’s another reason if there is any, to buy a condo instead of renting – when you know for sure you want to upgrade to a house in Brooklyn, in several years. The only way we were able to buy a house was because we had a Brooklyn apartment to sell that my husband had owned for a decade. Otherwise you’re right, it’s hard to jump from renting directly to buying an entire house.
“What I’d like to know is, how to normal people manage to save up the money you need for a down payment?”
The normal people that will tell you they’re not rich bought a long time ago. The rest probably either sold a crappy apartment for a bundle during the boom to buy the brownstone, work on Wall St. or got money from Mommy and Daddy. Because brownstone Brooklyn, unless you live in a very fringe area, is not for the normal people – rich only need apply. “Normal” people don’t buy million plus houses that need hundreds of thousands in work and survive, even with a tenant.
after tax savings and including maintenance, mortgage, repairs, etc. my studio purchased in 2006 costs me between 1000-1100 per month.
don’t find too many places for rent in that price range.
and life is about more than numbers, 12:29.
that way of thinking is what, for me has degraded life in the u.s. to a culture that values paris hilton more than paris, france.
12:24 said:
“i bought here because i love my home, my neighborhood, the people, etc.
the rest is gravy.”
THAT’S the way to debate this issue on this particular site.
So let’s pose the question this way: if you do know you plan to live in Brooklyn all your life, or at least 10-20 years, then which is better, buying or renting?
The whole 5-year investment doesn’t apply to most Brooklyn house and brownstone buyers. We don’t go through what we go through in renovating these old things to stay in them only 5 years. Save that debate for the Manhattan apartment buyers.
Regarding the guy who said property taxes on a $800K apartment were $15,000 a year – again, that’s Manhattan. Our $950K Brooklyn limestone has property taxes of less than $3,000 per year.
But thats money you wouldn’t of paid in the first place if you rented. You haven’t saved anything.
What I’d like to know is, how to normal people manage to save up the money you need for a down payment? I’ve been renting in Brooklyn for nearly 4 years (with a great landlord, so thankfully I have a stable and below market rent) and I would LOVE to own a historical home in my nabe (like the brownstone I live in), but it just seems so ridiculously out of reach for me! I don’t get how people do it. We are saving for a down payment but at the rate we are going now, we MIGHT be able to put money down on a small condo in three years. I never would have thought that homeownership would seem like such a dream, when I’m a college educated professional with a decent salary. How do people do it? ‘rant over’
once again, issues get cloudy when everything gets reduced to monetary value. owning has been worth it to me if only so i never again have to deal with the idiotic landlord from my last apartment. you can’t put a price on that!
I am getting an 18000 refund check in taxes which effectively makes my renovated Parlor and ground floor/garden duplex apartment cost me 1900 dollars net cost per month – this is with building maintenance costs, heat, repairs etc. I take care of my tenants, my apartment, nobody evicts me, I sell when I want. The cash flow works and I bought this place to live in it. It works for me whether the market goes up 5% or not. The recent appreciation has worked for me (gotten me better financing and some cash to complete the renovation) but nothing about this deal is dependant now upon additional market appreciation.
It’s about housing.