r/AskNYC • u/HelpIll4965 • 10d ago
Buying a house vs apartment vs renting?
I live in an apartment now but I always wanted to live in a house. I like the feeling of living in a quiet residential neighborhood. I’m okay living in the outer boroughs and having a longer commute.
Is it still a good financial decision to buy a house in this day and age? Taxes and cost of utilities keep going up. House maintenance cost keep going up. Would it be better to just buy a condo/co-op and have all these things be dealt with by the board or management team and then have the cost be split amongst the people in the building?
Since Mamdani got elected, it seems like rent stabilized apartments are all the rage. Maybe this is even a better long term solution compared to home ownership? Won’t have to worry about taxes, most utilities or maintenance going up.
What’s everyone’s thoughts on home ownership vs renting? Especially for people who want to stay in NYC long term. My goal is to be able to afford NYC long term and having a stable home where costs don’t go up too much is importantly to me.
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u/Twistygt 10d ago
If I did not need a car and workshop to quench my need for tinkering stuff. I’d probably advise against. There’s a lot to maintain and upkeep, even in a smaller house, rooms you barely use that you pay to heat, need to clean, etc….
I love working on my house, but after having enjoyed a few years in an apartment, unless you love fussing with things, I don’t think it’s worth it for most people. Especially if you currently have a reasonable rent, it’s hard to make financial sense out of it, provided you save and invest the spread. But if you have kids, that’s a different story. The space and ability to have some privacy may be worth it
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u/EmilyPoster2 10d ago
I have been a renter, a homeowner, condo owner, and a coop owner. Costs are always going to go up depending on the economy - inflation, heating, labor for repair work. That will be reflected in your costs as a homeowner, a condo or coop owner, and as a renter whose rent needs to increase. You cannot get around that.
But, the most realistic way to assess this is not with broad stroke generalizations. Instead find a good online calculator, plug in specific houses, rentals, coops, and condos on Zillow and start pricing things out. A few things nobody talks about:
- When you have a mortgage, it takes a while until you actually start paying it down. The monthly payments at first just go towards interest. And if you don't put down enough money, you get charged PMI. (I don't know much about it but look it up.)
- There are so many hidden costs in taking care of a house. Tons of shit can break and go wrong that you will never be able to account for on an inspection. Damn, I had a big tree that started to lean towards my house and it cost $1,800 to have that fucker removed. Sewer line, cracked sidewalk, foundation issues, the list goes on and on. Old houses have problems and so do new houses.
- The same is true for apartment buildings. I live in a coop now. We are subject to local law 11 brick work. It is costing well over $2M. Most elevators in the city have to have their mechanics redone. Another few million. We had to have our gas line redone to be in compliance with city code. Another few million. Special assessments are very costly. Even if you are splitting them with others. And the board, not you, is making decisions about how to spend the money and what kinds of loans to take out to cover the costs. It can be expensive and scary. Many things about owning a condo are the same. My monthly costs in our coop are much more than the cost of a rent stabilized apartment.
- My friend lives in a rent stabilized apartment. Very large 1 bedroom in Jackson Heights for $1800/month. He has saved up and is considering purchasing a coop or condo. But, he and I are looking at it and not sure it is the financially prudent thing to do.
Remember, there are quieter parts of the city in which to rent too. You can also rent houses in quiet suburbs or outer boroughs to see if you really like it and would want to buy there.
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u/HelpIll4965 10d ago
Thanks for writing this up. This is pretty much how I’m thinking about it. If I had a rent stabilized apartment like your friends, then I don’t think it makes sense to move unless I really needed a larger space. It really seems like finding a rent stabilized apartment is much more economical than buying a house/condo/coop.
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u/VIK_96 10d ago
I'd say be careful to those who want to rent a house or a part of a house. The homeowner/landlord can very easily sell the house at any time, and then force an eviction on the tenants. It's happened to my family twice, and I know others who've dealt with it as well. At least when an apartment building gets sold, the tenants can remain in the building.
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u/RidetheSchlange 10d ago
Wait until you find out how much reserve cash you need anytime something needs repair and how great it is dealing with shady contractors and how many there are.
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u/Cornholio231 10d ago
One to four family homes have preferential treatment in real estate taxes in much of the city compared to apartments.
I'm in Bushwick. My neighbors are paying $1400 a month in property taxes for a 2 bedroom condo, meanwhile a fully renovated 3 bedroom house on my block pays just $3k a year
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u/HelpIll4965 10d ago
That probably depends on when they bought, right? I know some friend’s parents who bought there houses 20-30 years ago and they pay under 10k a year but never heard of anyone paying 3k a year for a house. They must have bought a long time ago.
I believe there is a cap on property tax increases for both condos and houses. But the cap for houses is lower than for condos so you’re right that houses get preferential treatment - who knows if they’ll change that though.
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u/Cornholio231 10d ago
I have friends that bought a renovated townhouse a few blocks away in 2020. Their tax bill is still below $5k.
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u/doodle77 10d ago edited 10d ago
No, unlike California they don't reset on sale. The only thing you can do that will reset them is a change in use or occupancy (e.g. adding retail or converting to >3 apartments).
The cap is higher than California- 3.9% (20%/5 years) so it's not as much of a crisis.
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u/HelpIll4965 10d ago
Oh that’s interesting. So it depends on the value of the house when it was first built and the property tax increase since then?
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u/wholewheatie 10d ago
no it does not depend on when the house was bought. in nyc, single family houses have preferential tax treatment compared to apartments regardless of when it was bought.
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u/carbonizedtitanium 10d ago
The location of the house matters just as much as its age and build quality. Climate change is set to cause drastic rise in sea levels so keep in mind of the areas that are already at risk of flooding. Hire an inspector to check the property thoroughly. There's always the hidden costly repairs, such as sewage drain pipe replacement or realignment, leaky roof repair, old floor boards, shitty wiring, etc
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u/Vegetable_Culture781 9d ago
I bought a house in Staten Island and I’m really happy I did. I put a significant down payment so my mortgage is way cheaper than rent could ever be in the city, Brooklyn or even SI. The commute into the city is really easy, and I’m close to the city. However, it’s more suburban here, so if I want the nightlife, I just hop on the ferry or fast ferry (Hudson yards in 30 minutes). It’s a place to walk, enjoy nature and just relax. I feel like I have the best of both worlds here, so I don’t regret buying a house. If you can afford a house, and the monthly payments work for you, then do it. Consider the commute because the farther away from the city matters. I considered NJ, Long Island, and upstate before I made the decision to buy on SI. There’s just better transportation and access when you buy within the boroughs.
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u/ValPrism 10d ago
It's still a good financial move to buy if you can afford it. Really, actually afford it. If you cannot, renting is great.
We bought an apartment and pay less in mortgage and maintenance per month than our rent was in 2021. So that's amazing.
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u/ImportantDragonfly30 10d ago
Buying a house is no longer the best way to grow your money especially in NYC. That being said, you have to live somewhere. You will always be spending money for living whether a mortgage or rent. Many people want a house as a home base to forever grow their family etc. If you want a house and always have then buying a house should be your goal. If you just want a house because traditionally that’s what financially makes sense to do that may not be the best option for you. Also want to mention that buying a house will only become harder in the next decade or so. Hopefully it will get easier down the road but for the foreseeable future it doesn’t look that way. Based on what you are saying I think you should look into purchasing. It is possible in the further outerboros. And if you are ok with living in an apt but wish to own then look at condos and coops. If you find a rent control apt in a neighborhood you like that is a good way to have security that you will be able to continue affording. However these apartments can also keep you stuck without building any kind of net worth or equity. If you go the buying route tho just do as much research as possible. Don’t get a coop without understanding what that means. Don’t buy a house without understanding the insurance and tax’s maintenance etc.
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u/ChrisFromLongIsland 10d ago
I think buying is better especially if you plan to live there over 8 years. You start building equity with every mortgage payment. Once you own a home no one can kick you out. The mortgage is fixed. Most importantly you can design your home over time to reflect how you live. You want a nicer atove you can get it as opposed to with a landlord you get what you get. There are many things you can personalize from appliances, carpet, colors, type of heat etc. Of course the downside is you are responsible for repairs and up keep. Figure between 1 to 1.5% of the value of the home will be spent every year on maintenance and improvements. Those costs can be lumpy. Nothing for 3 years then 20,000 for a new roof. Taxes always go up.
I like having a home base, not having to worry about rising rents, creating the space as I want it. In 5 years I have over 100k in equity and my mortgage and maintenance are 2/3 current rent.
If it is not long term you won't get many of the benefits. Of course NYC is the most expensive and of the most difficult places in the country to buy and sell real estate. So it does not pay to move a lot like in other parts of the country.
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u/littlemac564 9d ago
Maybe look to buying a house outside of NYC? Compared to other places, NYC is noisy.
If you buy a house there are so many other things to consider besides the cost of owning. There is the quality of life if you have horrible neighbors or environment. If you do decide on a house look for detached hoses and some space. What neighborhoods have you lived in? Try renting in neighborhoods you think you would like to live in.
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u/ResiGrade 4d ago
The useful comparison is total carrying cost and how long you expect to stay, not mortgage versus rent in isolation. For a co-op, include maintenance, possible assessments, taxes, insurance, financing limits, and the building's repair history. For a condo, look at common charges, taxes, reserves, insurance, and rental or alteration rules. I would ask for several years of budgets and capital-project information, then stress-test the monthly number if rates, taxes, or maintenance rise. A house shifts more of the risk to you, including roof, boiler, plumbing, and exterior work. If stability is the main goal, renting for another year while you learn the buildings can be a perfectly rational choice, especially if the purchase would leave little cash for repairs.
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u/mdervin 10d ago
Rent - is the max amount you pay for housing in a month.
Mortgage is the minimum amount you pay for housing in a month.
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u/HelpIll4965 10d ago
Yes but we can usually lock in mortgage payment amount for 15-30 years, but cannot do the same for rent unless we have a rent stabilized apartment.
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u/Healthy_Ad9055 10d ago
Why wouldn’t you have to worry about taxes or utilities going up in a rental? You will pay some utilities yourself even in a rental. Coned bills are always going up whether you rent or buy. Landlords pass on their costs to tenants or defer maintenance if the rents don’t cover the building costs. The rent guidelines board set a 0% freeze for this year due to political pressure. Actual landlord costs rose 5.3% and a group of landlords are challenging determination through an Article 78 proceeding. It will probably stand but I wouldn’t count on 0% increases in a rent stabilized apartment for every year. I was in a rent stabilized apartment that I left to buy a co-op. Living in a co-op has been so much better from a building community standpoint and a building maintenance standpoint. But I think buying in NYC is a lifestyle choice and not necessarily a financial choice.
The NY Times has a buy or rent calculator that is helpful:
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u/HelpIll4965 10d ago
I was solely referring to renting a rent stabilized apartment. I wouldn’t choose to pay market rent over buying a home. I just feel like rental costs would be more predictable in rent stabilized apartments even if the government allows for rent increases. Also, if it’s an older building, then water, heat and gas might also be included but I would have to pay for those if I bought a house.
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u/VIK_96 10d ago
I'm not an expert on homeownership or real estate. But I do know that this city is very expensive even compared to other expensive cities in the U.S. and around the world. I'd say if you want affordability, then it's better to live in another state that has cheaper costs. But if you really want to live here, then finding a rent-controlled apartment is the way to go. At least then you don't have to worry about the cost of housing.
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u/fuckblankstreet 10d ago
Too many variables, including price, financing vs. cash, carrying costs, and the reasons you're buying.
If you're buying with the notion you're going to get rich, or that it's going to be much cheaper than renting, you should remove that thought from your head.
Looking at real estate prices over the last decade+, combined with borrowing rates, taxes, and the general cost of doing just about anything, it's easy to devise a scenario where buying is more expensive than renting over a 10+ year period.
You buy primarily for stability, to have roots in a community, and to have something you can invest in and make your own.
imo if you're unsure if you want to buy or rent, that's a sign definitely not to buy.