NYC Real Estate: Should I rent or buy?

Question

I'm currently working in NYC and paying rent. If I could find a 1 bedroom or studio that is affordable, would it be worth it to buy? Or should I just try to find cheaper rent and focus on investing in real estate elsewhere? Ideally, I would use this property to live in for the next few years and eventually turn it into a rental or sell.

I'm wondering if NYC is worth the major capital I'd have to put in.

Mark Dolan · Answer

Where in NYC would you be looking? Manhattan varies a lot from somewhere like Sunnyside, Queens. It’s funny how normal it is to just pay rent in NYC. Been living here for almost a decade and I don’t know one person who actually owns the place they live.

Ronan Donnelly · Answer

@Vincent Sottile, I would echo what @Brandon Cohen said. There are deals to be had, especially since the market has been going down, and depending on the area it can be cheaper to buy than rent. The downside is that a NYC purchase requires significant capital which could be earning good returns elsewhere. I personally bought recently because the market has been very soft, by looking at a lot of deals we eventually found a good one, there are significant opportunities to add equity and it was cheaper than renting in my area. Happy to share specifics if you DM me. Good luck!

Brandon Cohen · Answer

@Vincent Sottile it all depends on your budget and goals.  I bought my apartment (coop) and my monthly costs are less than what I was paying in rent.  I just sold another coop to a friend who renovated and he added a ton of equity.  The down payment is the tough part, of course.  You could of Course continue to rent and buy in another market but I think NYC is always a safe buy when you buy right.

Raul R. · Answer

@Vincent Sottile

Only thing affordable in NYC are Coops, for ex in Riverdale next to Manhattan you can get a 1Br in 180k range or studio under 150k range in a 24 hour doorman building. Everyone situation is different I see nothing wrong in paying rent and investing

Jason Lee · Answer

The rent to buy math is out of whack here and so there really is no right or wrong answer. It really depends on your own specific numbers and goals. It's hard to give you a direction without knowing your specifics.

Do you really want to live in a cheaper rental or have a longer commute just so you can invest? If you're ok downgrading then go for it. Curious what kind of investing appeals to you?

It's a pretty good time to be a buyer... prices have softened, inventory has risen, money is still cheap. Meanwhile the rental market has gotten worse for tenants... there is a lot less vacancy and rents have been going up. Half of my landlord clients are accidental, meaning they moved out of their primary residence for whatever reason and have been renting out their places ever since. Whether they bought at a peak or at a bottom, they've pretty much all seen great appreciation. On top of that, they get good rent increases each turnover and have very easy A/B+ tenant class. These turn out to be very easy investments.

Jaron Walling · Answer

You could focus on out-of-state investing if you do the research and visit the market. It comes with headaches but if you find the right PM it could be a good investment. Studio apartments don't cost $150K in my market!

George Hermann · Answer

I would not recommend Riverdale if you work on the east side. An area like Concourse or others in the Bronx (think near the 6 train) would get you more for your money.

Scott Wolf · Answer

You should run the numbers to see what makes most sense for you.  Do you plan on investing in RE?  If so, it may be nice to have more capital to invest.  Or you can house hack in Westchester/the Bronx/Queens/Brooklyn (the last two might be too expensive).

Always happy to chat.

Raul R. · Answer

@Vincent Sottile

Riverdale is in the Bronx and most locals don’t like associating neighborhood w BX which I find to be funny. What I like most is having different options in getting to city, Express bus, metro north , city bus&train. My building has rentals 1br are in $1800-$2300 range depending on views includes electricity no wait list for indoor parking. PM if you’re interested in seeing rentals I can arrange a showing

Mark Dolan · Answer

That’s great, what about towns along the metro north around the Hudson valley? Some are only an hour or less to midtown by train. Beacon is one that comes to mind but that might be a little further up. Yeah the rent thing in NYC is pretty crazy alright. If you can invest in something then I would definitely break that wheel : )

NYC Real Estate: Should I rent or buy?

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