Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I don't know that most New Yorkers don't own. People that I know who are at least middle class do own (teachers, doctors, cops, laywers, firemen, professors, etc). And of course wealthy are owners.
Poor people don't own, but the problem with that is rent always goes up in NYC. Poor people in old age may have to leave NYC or go homeless if they are still renters when they retire (among the truly poor many don't have pensions or savings).
A lot of the young people who move here after college and don't make much money end up leaving if they don't get established in something that pays well. The city has always had a big transient population of people who come here for a few years, take their shot at making it and if it doesn't go well leave. That's why the saying is if you can make it in NYC you can make it anywhere.
many adapt without owning and do fine. a family who has a 3 bedroom apartment when all the kids live there can move to a 1 bedroom once the kids are out and likely see better cash flow than an owner with the same size house they raised the family in.
the problem comes when you can't cut back anymore .
renters are such a mixed group unlike owners. owners buy because they have the resources to buy.
generally owners are a wealthier group because they had more money to buy and were wealthier and had better resources to start with . some think it is the home that makes buyers wealthier but no it is the wealthier tend to buy homes,.
renters contain very poor and very wealthy all lumped together and it is a hard group to make any general comments about because it varies so much.
many adapt without owning and do fine. a family who has a 3 bedroom apartment when all the kids live there can move to a 1 bedroom once the kids are out and likely see better cash flow than an owner with the same size house they raised the family in.
the problem comes when you can't cut back anymore .
renters are such a mixed group unlike owners. owners buy because they have the resources to buy.
generally owners are a wealthier group because they had more money to buy and were wealthier and had better resources to start with . some think it is the home that makes buyers wealthier but no it is the wealthier tend to buy homes,.
renters contain very poor and very wealthy all lumped together and it is a hard group to make any general comments about because it varies so much.
Your first comment may not necessarily be true due to the weirdness of NYC's rent stabilization laws. If the 3 bedroom apartment was rent stabilized, if after the kids are gone the older couple has to move an one bedroom apartment could be more expensive than the apartment they left.
It will all depend on what kind of income the older couple has. Do they have pensions? If their pensions plus social security allow them to rent a decent place they are fine.
If however all they have is social security, they are screwed. Rent would bleed through and wipe out any savings unless one is fantastically rich. There's a lot of poverty among senior citizens who are renters.
Obviously wealthier people tend to buy homes, but homes (assuming prices appreciate or one inherits) are are valuable assets and are a form of wealth.
As for the wealthy and the superwealthy, at a certain point they buy property somewhere. Why on earth would someone pay $6,000 a month in rent for 20 years indefinitely? At a certain point it becomes economical to buy.
i am in a rent stabilized 2 bedroom -2 bathroom apartment where my wife lived for 35 years. i can tell you we can take an unstabilized 1 bedroom apartment for less money and a studio even less if cash flow was a problem..
the key to retiring is descretionary income in your budget. living hand to mouth ,sweating every bill and not being able to cut back on anything if a budget killer hits you is an awful way to live.
in fact if you have a decent amount of descretionary income spending in your budget even inflation can have a small effect by retirement .
studies show we tend to spend in a smile shape. ewarly on if we have some descretionary money we spend more and do more in the early years. by 75 or so spending falls off a cliff.
we do not do ,buy or go as much and all the things we do not spend money on has been shown to offset much of inflation on what we still do.
by the 80's we ramp up again with healthcare costs, gifting and charitable giving looking smile shapped over 30 years of retirement.
the issue is with no descretionary income there is nothing to stop doing and everything stays a need and then you will be hurt bad by inflation.
it isn't so much what your income is , it all boils down to the descretionary part of it.
to little can make things tougher and tougher.
Last edited by mathjak107; 01-06-2015 at 03:08 AM..
Your first comment may not necessarily be true due to the weirdness of NYC's rent stabilization laws. If the 3 bedroom apartment was rent stabilized, if after the kids are gone the older couple has to move an one bedroom apartment could be more expensive than the apartment they left.
It will all depend on what kind of income the older couple has. Do they have pensions? If their pensions plus social security allow them to rent a decent place they are fine.
If however all they have is social security, they are screwed. Rent would bleed through and wipe out any savings unless one is fantastically rich. There's a lot of poverty among senior citizens who are renters.
Obviously wealthier people tend to buy homes, but homes (assuming prices appreciate or one inherits) are are valuable assets and are a form of wealth.
As for the wealthy and the superwealthy, at a certain point they buy property somewhere. Why on earth would someone pay $6,000 a month in rent for 20 years indefinitely? At a certain point it becomes economical to buy.
why pay 6k a month indefinetly? because they are making 12k in investments or even more elsewhere with the money it would cost them to buy . i don't spend 6k a month but i can tell you if i was not renting and had that money tied up in a house i could never have taken advantage of the investments i did.
i would never take an equity loan on an open ended time frame like these investments , so i couldn't afford to pay an equity loan.
right now we are watching our rent increases carefully evaluating them
we can buy a co-op like our apartment for 300k but that means giving up 14-15k in income conservatively on that investment. when i was a more aggressive investor it would have been alot more.
buy buying will drop our housing costs to about 8k a year.
it may reach a point soon that cutting costs may be a better deal than that income since i am no longer doing those investments now that i am retiring.
Last edited by mathjak107; 01-06-2015 at 03:10 AM..
why pay 6k a month indefinetly? because they are making 12k in investments or even more elsewhere with the money it would cost them to buy . i don't spend 6k a month but i can tell you if i was not renting and had that money tied up in a house i could never have taken advantage of the investments i did.
it may reach a point soon that cutting costs may be a better deal than that income since i am no longer doing those investments now that i am retiring.
You're in a rent stabilized apartment, so the 6k a month indefinitely doesn't apply to you.
There would not be a rapid growth in condos and co op conversions if people were interested in spending 6k a month on rentals indefinitely. Most people with that kind of money ultimately prefer to buy and there is no point in arguing otherwise.
i am in a rent stabilized 2 bedroom -2 bathroom apartment where my wife lived for 35 years. i can tell you we can take an unstabilized 1 bedroom apartment for less money and a studio even less if cash flow was a problem..
it isn't so much what your income is , it all boils down to the descretionary part of it.
to little can make things tougher and tougher.
If someone has been living in Manhattan in a two bedroom rent stabilized apartment for 35 years, downsizing to a new one bedroom apartment (rent stabilized) is going to cost them a lot more. When people move out of rent stabilized apartments landlords upgrade and raise rents. I'd say ditto for Western Brooklyn and Western Queens.
It's why a lot of older people without sufficient income are forced to leave NYC altogether, or access social services. High rents don't work out well in old age, and just a studio in a bad part of the Bronx is going to cost 1k. No amount of cutting can make living off of only social security (with no savings or assets) viable.
with an average monthly benefit for retirees of 1300 a month and a median retiree income of about 38k in the country most fdolks are not to me not actually living just on social security alone although the press likes to publish all kinds of bad news whether true or not.
i think about 1/3 of retirees get 90% of their income from ss so the almost 70% of the rest of the folks seem to be doing better.
i wouldn't want to try living on 38k in ny but i guess it is better than 16k from ss alone.
Not in Manhattan but the surrounding cities yes. NYC is one of the most expensive cities to live in so be prepared. Remember that money management and interests pay a huge part. You can create a great life on 60k if your smart and you also can have a train wreck on 150k. Money is not the key to happiness and you can manage without looking for your next check. Just be smart and think through every decision carefully
Not in Manhattan but the surrounding cities yes. NYC is one of the most expensive cities to live in so be prepared. Remember that money management and interests pay a huge part. You can create a great life on 60k if your smart and you also can have a train wreck on 150k. Money is not the key to happiness and you can manage without looking for your next check. Just be smart and think through every decision carefully
money may not be the key to happiness but it sure makes misery better.
it really is all about your cash flow .
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
