Did you know that as of September 2017, renting a one-bedroom apartment in New York City will cost you nearly $33,000? That’s roughly the cost of a down payment for a house elsewhere in the US. According to Thrillist.com, economist Grant Long states…
The point in time in which the benefits of owning a home exceed the benefits of renting that same home,” Long explains, “[is] the tipping point.” And if you’ve been a renter in New York City for five years or more, you’ve probably already passed it. You need to stay in your home for a little over five and a half years for buying to make financial sense.
The takeaway being, if you can’t see yourself staying in your potential NYC living space long term—it may be best to simply rent. Naturally, purchasing a living space in Manhattan comes with upfront costs like down payments and closing costs—expenses that may be above budget for an already pricy NYC living space. However, for those of you with dreams to be a New York City homeowner, it may be attainable with plenty of research and a well-thought plan. Here’s what to keep in mind when looking to buy in NYC…
Decide on a limit
Start with StreetEasy’s Tipping Point Tool. Calculate whether you should continue with leasing or get started house shopping.
Talk to an expert
Talk to the professionals to put together a savings plan, fix up an unfavorable credit score, and make an informed decision.
Go for a lower down payment
Decrease your upfront costs by selecting lower down payment mortgages. Pro tip: low-income areas are common in NYC, and finding and buying a home in one means no limit on your income to qualify.
Cut your tipping point by changing neighborhoods
Boroughs like Brooklyn, Queens and the Bronx have significantly lower tipping points (under 5 years) than Manhattan (almost 8 years). Tipping point times decrease in neighborhoods with lower home purchase prices. According to Thrillist.com, “In less than a year and a half, for example, New Yorkers who go from paying rent in Chelsea to owning a house uptown in Washington Heights can break even.”
As always, whether you choose to lease or purchase your NYC living space, Shleppers is the go-to for moving and storage NYC. Contact us today to learn more!