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Should You Rent a Home or Buy in New York?

Should You Rent a Home or Buy in New York?

Should You Rent a Home or Buy in New York?

November 26th, 2022

Making the decision to buy or rent a home is always a major deal wherever your locale. But this decision can seem even more mentally taxing when you live in a real estate hot spot like Miami or Los Angeles County. In New York, the decision is quite the daunting task. With the average rent hovering near $3500 and the average cost of buying nearing $1 million, there is no wonder why this is such a huge decision. If this is your current dilemma, we might be able to give you some factors to consider that will hopefully make your decision a little easier to make.

Your Finances

It helps to be really clear on what your financial landscape is. When considering condos NYC for sale, you will need to have an understanding of everything that home buying in New York entails. Although both renting and buying require money up front, buying requires significantly more money up front than renting. Typically a downpayment on a home is about 20% of the cost, closing costs are around 10% of the home’s cost, and the $500 or less appraisal fee is needed. This is considerably more than the average $4000 to $8000 it takes to secure a rental property. If you’re going to purchase your apartment, you’re going to need to factor in property taxes, mortgage, homeowner’s insurance and repairs and maintenance.

Your Future 5

Take a moment to consider where you see yourself in five years. Do you have plans on climbing a career ladder? Maybe you want to start a family. Perhaps you want to downsize and retire. Whatever your plans are, you will need to take them into consideration. Although buying a home builds equity and is a major investment, flipping a home in NYC isn’t guaranteed to be a substantial money grab. Keep in mind that there is a 10% transaction cost that comes with selling a home in New York. If you think you’ll want to move again, it will most likely be in your best interest to stay put for at least five years so that you can break even or better when you do decide to sell.

Renting vs. Buying

One of the greatest things about renting in New York City is flexibility. Leases are usually for a year, but they can also be less than that–even month-to-month leases are common. If you’re just getting established or trying out life in the city, renting is a great option. Although there are up front costs associated with renting, it’s still considerably less than that of buying and you don’t have to worry about maintenance and repair costs. The biggest advantage to buying is building equity. Other pluses to buying is not having to endure fluctuating rent prices and tax benefits.

Ultimately, the choice is yours. Only you know your financial landscape and only you have the blueprint for your future. Consider both your current circumstances and your goals for the foreseeable future. There are taxes, down payments and more to plan for when thinking about buying a home in New York City.

Laura Bartlett

Laura Bartlett

Northern girl Laura is the epitome of a true entrepreneur. Laura’s spirit for adventure and passion for people blaze through House of Coco. She founded House of Coco in 2014 and has grown it in to an internationally recognised brand whilst having a lot of fun along the way. Travel is in her DNA and she is a true visionary and a global citizen.