To Own or to Rent?
Over the weekend The New York Times profiled a series of co-op or condo owners who became renters either due to the market downturn, size requirements, or both. The article begins, for example, with a family of four that moves from an 850-square-foot Upper East Side two-bedroom, one-bathroom co-op to an Upper East Side rental—three…
Over the weekend The New York Times profiled a series of co-op or condo owners who became renters either due to the market downturn, size requirements, or both. The article begins, for example, with a family of four that moves from an 850-square-foot Upper East Side two-bedroom, one-bathroom co-op to an Upper East Side rental—three bedrooms, three bathrooms, and 1,400 square feet for $5,200 per month. The praises sung for renterhood include: freedom from responsibility and anxiety, fewer financial requirements, more space, and sometimes more amenities. Some of those profiled in the article, however, miss ownership: the camaraderie in the building, the freedom to renovate and customize, the autonomy of ownership. Those profiled are primarily individuals, couples, or families who live in expensive Manhattan neighborhoods like the Upper East Side, the Upper West, or Greenwich Village—people who can afford rents of $5,000. It would be interesting to hear from readers with a wider range of incomes and locations. For example, has anyone out there had a similar experience in Brooklyn, where you have recently sold a house or apartment (either by choice or necessity) in order to become a renter?
Owners No More [NY Times]
Image by Mark Ovaska
BHO, but even in perfect supply/demand market where economy is stable, Owning should be more to renting since there are added benefits, whether they are personal preferences, emotional safety, etc. The real question is whether the % difference between renting and owning makes sense. Also, I know what you preach but Wasder is right that none of us can predict it.
Personally for me, owning makes sense even when I bought at the height of the market. My mort+maint is MUCH less then comp. rents in my neighborhood for the apartment same size and I renovated the way I like it and not someone else. I will always be able to cash out and recoup what I spent for reno and downpayment even if my apartment falls another 35% or so.
Hmmm, witchdoctor. You did voodoo and made your downpayment 50% or more (subtract that from your future resale price after inflation – you’ll need voodoo again!). Otherwise, you bought your brownstone for half off peak comps before the run-up, without refi, or after the crash. Or you don’t really live in Clinton Hill (east of Classon). Bad comparison.
Regarding exterminators, let’s be fair. In a brownstone, you effectively live in a high rise turned on it’s side. You don’t eliminate bugs and rodents in NYC, you manage them.
***Bill Thompson for Mayor***
my mortgage is $2,500 a month, i have a tenant who pays $1.500 and i live in a 1873 RENOVATED brownstone in clinton hill on three floors each over 950sf? what makes more sense? renting in a building where exterminators come around spraying each month or owning and deducting my mortgage, hmmm….
Thanks, wasder. Do I have that much power to sway people? I think people know that what I say about the future are just predictions no matter my conifidence. It’s just the human way to express them.
***Bill Thompson for Mayor***
“I’ve been reading everyones comments (and maybe I missed something) but I failed to see anyone comment on the false security you have renting.”
I moved to Brooklyn after getting a 38% rent increase on my Manhattan 2 bedroom. I was coming off a 2 year lease signed in 2005, so, yeah, prices had gone up a lot in the last 2 years, and I was braced for a 15% or even 20% rent increase.
But the 38% was too much. Landlord refused to negotiate. We moved.
Landlord was one of the first to start offering “1 month free!!!” for new leases. Then “2 month free!!!!”. Then they cut prices.
I got priced out of my home even though my landlord was wrong about how much they could rent the place for and would probably have happily negotiated with me 6 months later.
But that does me no good.
So, yeah, there is a definite risk to renting.
“I’m no financial guru, but I’m pretty sure fresh loaves of bread are depreciating assets, especially if I’m hungry.”
LOL! I’m pretty sure you know I meant steady supply.
***Bill Thompson for Mayor***
I’ve been reading everyones comments (and maybe I missed something) but I failed to see anyone comment on the false security you have renting. My wife and I lived in a great rental in the lower east side, paying a fair rent for a large place and the owner decided to move back. You have no control in rentals. I’ve also been in other rentals in Manhattan where from one year to the next, my rent was jacked up by large amounts.
We recently purchased in Brooklyn and we are happy with the security we are provided and knowing that we will be staying there for as long as we wish (obviously job security is an issue for both).
My empathies here for all those on this thread having to find a larger place due to having families. The kids aren’t that expensive themselves, but the third bedroom surely is.
I agree, it is personal. And I admit not logical.