BUYING VS. RENTING Part I (New York)
Deciding whether to buy or rent an apartment in New York City is not a decision that should be made lightly but should rather receive a great deal of consideration. You should weigh all the pros and cons, and closely examine your finances, your lifestyle, and what particular features you might possibly desire to have in your home. The following is meant to help guide you in your decision-making process by introducing you to options, advantages, and considerations for the New York City homeowner.
Personalizing Your New Home
Since a long-term financial commitment is required in order to purchase a New York home, you must take great care in making your decision. There are many reasons one may choose to move to New York City—new employment, proximity to family, a fondness for the area—but one must understand that buying property is much more stressful and time-consuming than renting. One cannot simply choose a home and move into it immediately. One has to deal with brokers, possibly co-op or condo boards, closings, etc etc, and one will also most likely not want to move into the new home as is. One will want to personalize it, through decoration or modifications/renovations, some of the most popular being remodeling the bathroom and upgrading the kitchen appliances.
Owning a New York City apartment provides a number of tax benefits, which arise from the ability one has to deduct property taxes and mortage interest from their income statements—benefits that are not afforded to renters in New York City. Due to these benefits, people can additionally save a great deal of money, which they can then reinvest, leading to far less monthly expenses being incurred. In other words, if one has enough money to buy, one can find oneself saving a great deal of money in the long-term.
With that said, a potential downside is the fact that renters also aren’t tying their capital down, as people who buy property that doesn’t earn income. But one can potentially later receive a large capital gain if he resells the property. Ask an accountant for further information.
Being the owner of an apartment in New York City doesn’t only bring with it the benefit of having an abode that is actually yours but also some important financial advantages, as well. The first and most simple is that no money is being wasted on rent. Instead, most money spent is going towards the long-term goal of owning the property, if a mortgage is required. At least, however, one is contributing towards something he or she will one day own, rather than rent, which one can pay for years and years and still have no more claim to the place than the day he or she moved in. Even if one later decides to move, he can rent the place out himself and earn some nice income that way. Also, when the real estate market is doing one, one can find oneself finally selling their property for significantly more money than they originally purchased it for. This option, of course, isn’t a guarantee but is certainly a nice incentive.
One of the top advantages to buying a co-op or condo unit is that these buildings generally have higher standards, such as better finishes, appliances, and amenities, as well as larger living spaces. Co-ops and condos are maintained with much greater care and pride than the general New York City rental building. Additionally, a condo or co-op homeowner can be actively involved in making the decisions that manage the building, if he or she so desires.
Co-op Associations and Condo Boards
Before one can purchase a unit in a co-op or condo, one must first be approved by the management, which tend to be associations or boards made up of the building’s residents. Condo rules tend to be less strict than co-ops and don’t tend to give people much difficult. Co-op boards, on the other hand, can have very unyielding requirements and also be run by people who are far more picky about who they allow into their community.