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I am a first time buyer also looking in this price range. Yes, 375-425 seems crazy, but when you crunch the numbers, its actually comparable, if not cheaper than paying rent.
= $3150 monthly .... not including yearly maintenance/yardwork/general house expenditures that add up.
One could pay rent for less than half of that and invest the excess.
(of course there is a significant tax deduction as well but not one that makes up for the difference). You can make money on house appreciation, but historically this has performed below the market, unless you get lucky and buy in LI on 1997 and sell in 2006
= $3150 monthly .... not including yearly maintenance/yardwork/general house expenditures that add up.
One could pay rent for less than half of that and invest the excess.
(of course there is a significant tax deduction as well but not one that makes up for the difference). You can make money on house appreciation, but historically this has performed below the market, unless you get lucky and buy in LI on 1997 and sell in 2006
= $3150 monthly .... not including yearly maintenance/yardwork/general house expenditures that add up.
One could pay rent for less than half of that and invest the excess.
(of course there is a significant tax deduction as well but not one that makes up for the difference). You can make money on house appreciation, but historically this has performed below the market, unless you get lucky and buy in LI on 1997 and sell in 2006
Fair point, but it depends on where you're renting...
Since you asked... Here's what what my decision is based on.
When I compared to rent, I compared it to our Manhattan rent. Right now, 3,100 for a nice one bedroom in a good doorman building. I still pay electricity and other utils on top of that (gas and hot water included).
Plus, every holiday, there's a list of 22 staff in my building to tip - figure 1,500 bucks each Christmas! I pay renters insurance (500-600 year) now.
Oh, and then there's the NYC resident taxes i pay - aprox 9-10K a year.
So, let's say your 3,100 a month house nut is correct - that's equal to my base rent.
I pick up some extra expenses - but also pick up two more bedrooms and room for storage. Can put my boat in my driveway or backyard instead of a boatyard, etc.
Lose City resident taxes (9-10K a year)
Lose holiday tips (1,500 year)
Pickup 6-700 a month in tax savings with deductions -
It will be cheaper than what it's costing me to live now... plus I pay into principle over time.
= $3150 monthly .... not including yearly maintenance/yardwork/general house expenditures that add up.
One could pay rent for less than half of that and invest the excess.
(of course there is a significant tax deduction as well but not one that makes up for the difference). You can make money on house appreciation, but historically this has performed below the market, unless you get lucky and buy in LI on 1997 and sell in 2006
I live in a 3 bedroom in Queens and pay more in rent than what you listed for a mortgage. I also pay utilities (granted, no insurance) so that really isn't an added expense to me. Also, since I live in Queens, I have the privelege of paying city tax where I wouldn't in LI.
So my rent + city tax is about the same as a mortgage + taxes. Add in the tax benefit I get buy owning and I'm making out. Now add to the fact that I pay for private school for both my kids in Queens, but won't in LI, and I'm way ahead of the game.
You can't compare renting in queens/manhattan .. to buying a house in LI, its not a fair comparison and you are not comparing the same thing. You have to compare what you would pay in rent in a long island apt vs buying a long island house otherwise its a flawed comparison.
You might be saving in your current personal situation, but nothing is stopping you from also being a renter in LI and a "renting vs buying" consideration should be based on an equal market. If you would consider living in long island anyhow, you might as well be renting there for 1200-1500 with no other expenses, and save a massive amount of cash.
You can't compare renting in queens/manhattan .. to buying a house in LI, its not a fair comparison and you are not comparing the same thing. You have to compare what you would pay in rent in a long island apt vs buying a long island house otherwise its a flawed comparison..
Is comparing what's likely to be a 2 bedroom apartment somewhere with a parking space to a 3 bedroom house with a yard/basement/attic/garage really a comparison of the same thing?
Is comparing what's likely to be a 2 bedroom apartment somewhere with a parking space to a 3 bedroom house with a yard/basement/attic/garage really a comparison of the same thing?
depends on where you rent.
I rent an 1100 sq ft first level of a house on a 1/2 acre plot, with parking, laundry, fireplace, everything included for $1500 in babylon, legal rental that hasnt gone up in 5 years, and I bank serious cash each month. The only thing lacking is repair bills and the ability to do what i want with the house.
Plus the discussion is one of monetary savings, housing should be looked at as shelter in a desirable area as that is its main purpose. The rest is bells and whistles but both keep you warm and dry, and renters or owners get the same community services of schools and the rest. Not to mention, the desires of one person is not the same as another, some people like simplicity. Comparing most of the houses I have seen in the sub 400K market, I would much rather live in my apt as it is actually much nicer.
depends on where you rent.
I rent an 1100 sq ft first level of a house on a 1/2 acre plot, with parking, laundry, fireplace, everything included for $1500 in babylon, legal rental that hasnt gone up in 5 years, and I bank serious cash each month. The only thing lacking is repair bills and the ability to do what i want with the house.
Plus the discussion is one of monetary savings, housing should be looked at as shelter in a desirable area as that is its main purpose. The rest is bells and whistles but both keep you warm and dry, and renters or owners get the same community services of schools and the rest. Not to mention, the desires of one person is not the same as another, some people like simplicity. Comparing most of the houses I have seen in the sub 400K market, I would much rather live in my apt as it is actually much nicer.
so you're a renter? I never would have guessed....lol.
Good for you that your situation is working for you....but your place that is "much nicer" is actually also much smaller than the average 400k house on LI making your comparison invalid. A better comparison would be renting your 1100 sf place vs. buying a condo/co-op in of a similar size in similar area.
I commend you for be able to live without "bells and whistles" and preferring "simplicity". However, others do prefer those added features and the reality is that they cost money. Comparing housing that has those features to your situation is unfair.
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