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Right now I live in a rent stabilized apartment in Queens, N.Y. where the landlord can get rent increases every two years. My banker has told me that I might qualify for a mortgage as long as I continue working albeit even part-time. What would you do: continue renting or buy a co-op apartment? The only drawbacks I see with co-ops is that is no limit on how much maintnenace can go year to year as well as unexpected "major improvements".
Well, consider the amount of the biannual increase, compared to mortgage and wether you can work till 99. Factor in the oven, fridge, wash/dryer croaking and replacement costs
Right now I live in a rent stabilized apartment in Queens, N.Y. where the landlord can get rent increases every two years. My banker has told me that I might qualify for a mortgage as long as I continue working albeit even part-time. What would you do: continue renting or buy a co-op apartment? The only drawbacks I see with co-ops is that is no limit on how much maintnenace can go year to year as well as unexpected "major improvements".
I would normally say to buy (because rents can increase tremendously over the course of remaining life in retirement), but if it is a rent-controlled apartment in NYC, then continue renting.
I would normally say to buy (because rents can increase tremendously over the course of remaining life in retirement), but if it is a rent-controlled apartment in NYC, then continue renting.
Right now I live in a rent stabilized apartment in Queens, N.Y. where the landlord can get rent increases every two years. My banker has told me that I might qualify for a mortgage as long as I continue working albeit even part-time. What would you do: continue renting or buy a co-op apartment? The only drawbacks I see with co-ops is that is no limit on how much maintnenace can go year to year as well as unexpected "major improvements".
You would need to put on paper what your mortgage costs would be compared to your current rental costs. Also buying , I assume, will require a substantial amount of cash as a down payment along with the yearly upkeep costs of the property. That adds up.
I've been a renter for most of my adult life, and know it is not easy to find a good rental apartment in many parts of the US. In NYC, I am assuming the OP lives in a "high-rise" type building that has thick concrete walls, floors & ceilings which often do a good job of blocking noise from neighbors.
My first question to the OP is: Do you like the location and the amenities of your current rental apartment? If the neighbors are OK, the apartment is reasonably quiet and the building is reasonably well maintained, I would be hesitant to move out. There is a risk of moving to a different apartment, regardless if a rental or a self-owned co-op, that the different apartment will have noisy neighbors or other negative issue that outweighs the financial advantage from moving.
ultimately over time the co-op will likely be a better deal .
when we bought our first co-op we to had a stabilized apartment …buying was way more then rent .
today my ex lives in it for about 700 a month …rents are 2k for a one bedroom in the building.
initially it is more to buy but rents catch up and equity in it grows .
you get. none of that renting.
most co-ops require 25% down unless you can find a sponsor selling it , but the bank has to agree if it’s less.
some buildings have flip taxes and may require more down then 25% .
the buildings don’t exempt a foreclosure from flip taxes so the banks want more down.
the situation would be different if it was a case of where you had the lump sum cash to buy out right vs investing it elsewhere and renting ..
then renting can be worth it .. but i don’t think that is your situation if i am guessing correctly.
your case is you don’t have the money to invest elsewhere while renting so buying is a better choice .
we are in the opposite camp since if we bought we would give up a minimum of 18k more in cash flow a year because the 450k we would spend on an apartment would no longer be generating cash flow for us and just be tied up in the apartment dead to us.
we are retired and cash flow is king …we couldn’t care less about it being apartment equity at this stage .
Last edited by mathjak107; 04-07-2023 at 01:41 AM..
yep , rent controlled apartments are just about a dinosaur….they are about 6-8% of rentals in nyc maybe less by now .
rent stabilized is close to 60% of the rental market here in nyc and it applies to most rental buildings 5 family. or more unless they are considered luxury buildings .
while no building had to be stabilized after 1974 there wasn’t one general rental building put up for decades that wasn’t some low income , affordable housing or luxury building .
only co-ops , and condos were put up for a long long time .
it wasn’t until developers started taking advantage of the lucrative perks offered through the j51 and 421a programs in exchange for being stabilized that we saw multi family rentals put up .
but being stabilized does not automatically mean cheap …many apartments are stabilized and at market .
we have stabilized apartments that rent for 4-5k a month .
they only agree to go by the increases the stabilization board allows going forward for as long as they take advantage of the programs.
some developers put up luxury buildings and agree to have a certain number of them fall under stabilized affordable housing rentals that are awarded via a lottery system.
if you know how to play the game an investor can make millions in the stabilized co-op market place but it is a game reserved usually for the pros.
we did amazingly well in that segment.
also asking the rest of the country what one should do is not going to draw informed answers since very few really understand stabization and co-op structure as it pertains to nyc.
there are loads of factors , like the protections renters have and situations unique to owning co-ops involved.
as well as the ops own financial situation and current rent
Last edited by mathjak107; 04-07-2023 at 04:26 AM..
Even though I owned a NY co-op for 26 years, I have always been more of a fan of renting. Since retiring, I have changed states twice, and will more than likely do so again in less than two years from now. I like the freedom of relocating on a whim with renting. I also like having everything taken care of by submitting a work order via an app, as well as all of the included amenities that I enjoy daily.
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