Renting v. Buying in NYC

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nealric

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Re: Renting v. Buying in NYC

Postby nealric » Mon Dec 12, 2016 10:59 am

Most lenders want to see at least 2 years employment history before writing a mortgage. Also, keep in mind that in NYC maintenance fees can be as much as rent in some parts of the country.

Long story short, I didn't know of a single associate at my firm that owned a place in Manhattan.

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bretby

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Re: Renting v. Buying in NYC

Postby bretby » Tue Dec 13, 2016 12:25 pm

nealric wrote:Most lenders want to see at least 2 years employment history before writing a mortgage. Also, keep in mind that in NYC maintenance fees can be as much as rent in some parts of the country.

Long story short, I didn't know of a single associate at my firm that owned a place in Manhattan.



Buying is actually a pretty good option, and I know people that have done it, but there are a lot of boxes that need to be checked:

Coops are probably out of the question especially:
a. If you have no work history, or no work history at a position making comparable to big law (ie: you were in finance or consulting) -- they just won't take a risk on you.
b. If you have sizeable loans

You might be able to buy an apartment if:
a. You have at least 100k in cash that you can spend without completely depleting your coffers. You will still need to make monthly payments, but these will likely be far less than rent would be, especially if you don't buy in a new building with amenities and so high common charges.
b. You get a guarantor who will co-sign the mortgage.
c. You plan on being in NYC for at least 3 years. NYC real estate is almost always a good investment, but you need some time to recoup some of the upfront expenses for it to make sense to sell.

All that being said, you will likely not be able to buy in Midtown, nor would you want to. The housing stock there is not particularly nice, and so would not be the kind of thing to spend yourself into the poorhouse for. Of the people I know that work for investment banks/hedge funds/consulting firms (and have been doing so for several years, making more money than an associate) none live in Midtown. They either live in Lower Manhattan, Harlem or the Upper East Side.

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elendinel

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Re: Renting v. Buying in NYC

Postby elendinel » Wed Dec 14, 2016 5:22 pm

I wouldn't buy anything in NYC until your career is relatively stable. You don't want to buy property in Manhattan and then figure out in 4 years that you want to be an AUSA/you want to go back to grad school and get an MBA.

Even assuming you have the capital to purchase in NYC, in addition to being able to find a place that is more cost-efficient once maintenance/HOH fees/etc. are factored in. Being a landlord here also sucks eggs (for good reason, with all the sleazes in the city, but still). Sidenote: be prepared for any Midtown property that is selling for less than a million dollars to have numerous issues. I know someone who did want to buy a studio apartment (I don't know why), and it turned out the "studio" wasn't up to code (no kitchen, some other things were missing) and the person had to pay upwards of $70k, on top of the list price, before they could even close (and I think they had to pay more for other things, but this was the price for just putting in kitchen appliances/etc.). So the listing may be $500k, but there may be $100k+ in extra hidden fees once you actually start to get into things.

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Re: Renting v. Buying in NYC

Postby favabeansoup » Wed Dec 14, 2016 5:38 pm

bretby wrote:
You might be able to buy an apartment if:
a. You have at least 100k in cash that you can spend without completely depleting your coffers. You will still need to make monthly payments, but these will likely be far less than rent would be, especially if you don't buy in a new building with amenities and so high common charges.
b. You get a guarantor who will co-sign the mortgage.
.



Paraphrased: You can buy an apartment in NYC if you already come from wealth.

For normal people: Spend the extra $$ per month on rent somewhere. Build your savings and pay down debt until you lateral out of biglaw. After you land somewhere more stable than biglaw, use yournow much bigger savings to start considering buying something.



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