Monday, October 03, 2005

Better to Rent Now Than to Buy

Last week, The New York Times did an analysis of renting versus buying a similar apartment or house in various metroplitan markets. With respect to New York City, it seems like it is clearly better to rent unless either (a) you are very bullish on continued price appreciation or (b) plan on staying in the purchased unit for a long time.

"After five years in which rents have barely budged while house prices in New York, Washington, Los Angeles and elsewhere have doubled, renting has become a surprisingly smart option for many people who never would have considered it before.

. . .

[O]wning a home today is more expensive than renting in much of the Northeast, Florida and California. Only if prices rise well above their already lofty levels will home ownership turn out to be the good deal that it is widely assumed to be.

In Manhattan, 1,000-square-foot, two-bedroom apartments on the Upper East Side now rent for about $3,700 a month. Buying a similar apartment costs around $1.1 million, which can translate into monthly payments of $6,000 or so.

. . .

[W]hen owning is more expensive every month, buyers are betting entirely on price appreciation.

For new home buyers, prices in New York would need to rise roughly another 13 percent over the next five years for the average buyer to do better than the average renter over that span. . . . Over the next decade, the break-even increase is about 25 percent in New York . . . ."


Is It Better to Rent or Buy


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Blogger Dave Velasco said...

I think both renting and buying a house has their own advantage and disadvantage. In this case, it actually depends on the current capabilities of the person whether they should rent or not. You cannot always push someone to buy their own property, nor to push someone to rent.

New York Real Estate CE

1:06 AM  
Blogger Dave Velasco said...

Renting over buying has been one of the debates even for those new york real estate ce professional as to what is mostly or the best option - to own a house or to rent a property instead. With a lot of people having different preferences on either owning or renting out, what matters is the everyone's interest is protected and given their chances to live a safe and sound life having a shelter to stay with.

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