LI down 23% in home value in 2009? (renting, buying a home, buying)

[djdairyp]

Originally Posted by rizza78

My wife and I got married in July 2007 and were able to find places under 2k in south western nassau (Lynbrook, ERock). To be honest, we never found any 2 bedrooms over 2k. We wound up with a 2 bedroom for 1600.

I agree, go to craigslist and choose 2bdrm, 1500 max, and you will find places all over nassau, wantagh, bellmore, east meadow, long beach, port, hicksville, etc.

[glags11]

WE found a 3 bed for 2100 in hewlett..beautiful home all updated...

[thepokerdepot]

Originally Posted by djdairyp

Where does the "possible rental income" number come from?

Possible rental income is what the home may get if you where to rent it out presently, in todays market.
It's much easier to figure this out with a smaller home. Like a condo or co-op,... you just look up the stats with your REA or I recommend you do some homework and look @ advetisements in Newsday or MLS to see what people are getting to rent a similiar home in the area your looking to buy.

Larger homes are a little tricky,..If your looking in Mill Neck, Centre Island, or Lloyd Neck, rental comps are harder to find.

But it's not as much work as you think,...do it enough times and you kinda get your own rule of thumb.

Like a split in a good part of Bethpage: Upstairs may get 1500 and Downstairs 1300.
Total Rental income 2800
Taxes 900/m
1900 left
1900 pays 380k
380k plus 10%
418k is Value
If you have any problems with anything your looking @ email me @ thepokerdepot @ yahoo . com or just post it here and I'll check day to day.

[Mantaray14]

Originally Posted by dman72

What percentage are you putting down?

I'm putting about 30% down (125k). If I had more time to think about it maybe I would have done 25% and kept some more cash in hand.

[CleanCutHippie]

Originally Posted by WJFM

While the article does paint a picture, it has plenty of flaws.

It does not take into account that rents are still high in the NY area. At current house prices, it seems like it will be cheaper to own than to rent.. provided you can get a loan and come up with a down-payment. 2-bed apts in Nassau county are still renting for 1600-2k a month, while buying a 4bed house for 420k will put your mortgage and taxes at about 3k a month.. and with tax deductions, its almost the same as renting. The fact that there is less construction in NY could also mean that there is less land available and its more expensive to construct here.

The article does not account for immigrants from places like India, China and Korea. They are usually highly educated, upper-middle class and I see many of them buying houses in good school districts. There are millions of them, and depending on US immigration policy in the future, there could be millions more.

I agree 100% with this. I think the Island is going through a demographic shift where Asians will be replacing the whites that leave. Long Island will be mostly Asian and Hispanic in the next 20 yrs. The rest of the country will also see huge surges in these two groups as well.

[alexei27]

I enjoy the comic relief notifications I get from Zillow...it says my 1800 sq ft cape in Sound Beach has dropped 2%...and is now "only" worth 365K. Very entertaining.

[WJFM]

I was looking only in Mineola, Albertson ( and the entire Herricks area), Garden City, Port Wash, Great Neck, and Roslyn. 2 bed/2 bath were around 1700 to 2400 in 2007.. and it is probably the same price in 2009. I found a few apts for 1500 in places like Hempstead, but I did not want to be there. The idea was to buy in Herricks, Great Neck or Garden city. I ended up buying in Jericho.. so my plan was not executed as expected, but I still remember looking at some pretty bad places priced for 2k 2 years ago.

Originally Posted by djdairyp

I agree, go to craigslist and choose 2bdrm, 1500 max, and you will find places all over nassau, wantagh, bellmore, east meadow, long beach, port, hicksville, etc.

[WJFM]

Your logic suggests that a person should expect to pay the same out-of-pocket per month whether he is renting or owning ( after a 10% down-payment). But owning should be more expensive per month than renting because of these points.
1) Tax deductions for mortgage is not taken into consideration
2) The monthly mortgage will remain unchanged ( for fixed rate loans) while rents will increase every year.
3) The benefits of ownership.

I see a 2 acre house in Brookville for rent for 5000 per month. Does it mean that its worth 750k??

Originally Posted by thepokerdepot

Possible rental income is what the home may get if you where to rent it out presently, in todays market.
It's much easier to figure this out with a smaller home. Like a condo or co-op,... you just look up the stats with your REA or I recommend you do some homework and look @ advetisements in Newsday or MLS to see what people are getting to rent a similiar home in the area your looking to buy.

Larger homes are a little tricky,..If your looking in Mill Neck, Centre Island, or Lloyd Neck, rental comps are harder to find.

But it's not as much work as you think,...do it enough times and you kinda get your own rule of thumb.

Like a split in a good part of Bethpage: Upstairs may get 1500 and Downstairs 1300.
Total Rental income 2800
Taxes 900/m
1900 left
1900 pays 380k
380k plus 10%
418k is Value
If you have any problems with anything your looking @ email me @ thepokerdepot @ yahoo . com or just post it here and I'll check day to day.

[thepokerdepot]

Originally Posted by WJFM

Your logic suggests that a person should expect to pay the same out-of-pocket per month whether he is renting or owning ( after a 10% down-payment). But owning should be more expensive per month than renting because of these points.
1) Tax deductions for mortgage is not taken into consideration
2) The monthly mortgage will remain unchanged ( for fixed rate loans) while rents will increase every year.
3) The benefits of ownership.

I see a 2 acre house in Brookville for rent for 5000 per month. Does it mean that its worth 750k??

I live in Brookville so I'll answer you the best I can.
When you deal with bigger homes over a Million,..like I said it gets a bit tricky.
LIMLS Brookvile

Theirs one for 5000k/m
Another for 6000k/m
and another for 15,000k/m but seasnoal.
Taxes vary from 17k to 48k per year on all home in Brookville, an average home like mine is 20k per year.

People around here are hurting for money beleive it or not,..my neighbor is renting his home for 8k per month to a New York Met so he could pay his taxes,...many homes here if rented are rented to either Sport Pros or CEO's.

Not many are listed in MLS or Newsday unless their desperate for cash. My best advise is to go to a Brookville REA and get comps from them.

Below is a Home Sold in Brookville:

Property Details for ML# 2148272

Sold Price: $1,095,000

Sold Date: 4/23/2009

9 Glenby Ln, Brookville, NY 11545

Taxes: $16,311

If this house rented for 6k
-1200
Left with 4800
4800 @ 4.6% is around a 935k mortgage
Plus 10%
1,028,000

Thank You very Much

Appreciation is the reward of buying a home,..not a gift.( It may also work against you)
Your tax back at end of year is part of 10%
You may have compared things from 10 years ago,..when I was young (maybe 40 years ago) interest rates were 22%!
It was cheaper to buy a home,...you could've bought a home with 1 years salary. Try that now.
Look,..the housing market went out of control,..nobody I knew bought a home in the last five years,..but we where all in the market before then. 8 years ago was the best,..(in generation x era).a bought a coop in Long Beach for 50K (waterfront studio),..2 years ago it sold for 290K! ( I could've got more, but knew this was all coming to an end).

This is how you don't lose your hard earned money,..this is a wake up call,..It's a great time to buy if your in the long haul,..it'll take awhile before you'll see prices of last years sell. My best advise, if your not into crunching numbers like me,..wait til the the end of the year,..the market will mostly be well priced homes. Not like now where you have 90% of listings overpriced.



Look,..I gave you my advise

[WJFM]

I see your point of view. You are looking at a house as an investment perspective.. you buy it.. and you want to rent it out, and you want to atleast break even every month. In this environment, your calculations might work. If you want to sell your house in 2 years.. you want to break even atleast.

Here is Rent-Vs-Buy calculator from NY times. http://www.nytimes.com/2007/04/10/bu...T_GRAPHIC.html

Put in 3000 as monthly rent, 540000 as value of home, and 20% downpayment + 1.5% taxes. Interest rate is about 4.75% now. With a anticipated house appreciation of 1% ( which is pretty low.. though we are in -ve now, it will reverse in 2010). Also change the tax to 35%. You will see the break even is 5 years. With 420000, you will break even in 2 years. In this economy, 420k might make sense.. but in a stable environment, 5 years break even is the norm.