If you are deliberating whether you should rent or buy in NYC right now, the good news is there are many options for both. Many residents have left the city due to the pandemic, which means there are numerous renting options with landlords willing to settle for an acceptable price. Also, mortgage rates are currently at their lowest. Living in uncertain times, home buyers are in a strong position when it comes to negotiating with sellers.
Owning vs. Renting
The dilemma you are having is legitimate. Buying a house or an apartment is one of the most significant financial decisions in a person's life, so it is crucial to get it right. This guide will help you decide between the two options. First, let's take a look at the pros and cons of both.
Pros of owning
- The money you spend investing in your property increases its value.
- Once you pay off the mortgage, you will have your own place and a more peaceful future.
- If you decide to sell it, you will undoubtedly get decent equity which could help you move to a bigger home or invest in your future business plans.
Depending on your lifestyle, owning a home could be a better option.
Cons of owning
- It is a significant obligation, and you need to be sure you can afford it. Along with that, be prepared for fluctuations in interest rates. If they rise, your payments will go up too.
- Maintenance costs can add up.
- Selling your home might not always go as easily and quickly as planned.
- You might need to put eating out and going on vacations on hold if you stretch your budget to buy a property.
Pros of renting
- No maintenance costs and repair bills to pay.
- There are no down payments or real estate taxes.
- Renting offers more flexibility, especially if your lifestyle and your job change.
- Insurance costs are considerably lower for renters than for homeowners.
Cons of renting
- Rents will most probably keep rising.
- There are no tax benefits.
- You won't be creating your future wealth.
- A lot of things depend on the landlord, and you will need to follow more rules.
What's the right choice for me in NYC?
Whether you decide to rent or buy in NYC, your decision will be based on your specific situation. The best option depends on your lifestyle and financial health. We've made a list of reasons to help you select the best alternative.
Reasons to choose to rent in NYC
NYC prices are higher than other markets
The current median rent for a one-bedroom apartment is 2600$. Keeping in mind that the median home price in Manhattan is 917,000$, renting is undoubtedly more affordable.
NYC has a broadly diverse rental market
Being the most desired part of the Big Apple, Manhattan gets the spotlight when it comes to prices. The good thing is that rentals in the outer parts of the city are far less expensive. Within each NY borough, you can find a variety of rentals with great variability in prices.
Renting means no maintenance costs and no real estate taxes
Buying a property might sound exciting, but it includes many unexpected expenses such as renovations, maintenance, and repairs. When you add those to your monthly mortgage payments, renting might sound more appealing.
Moving to a rental offers more freedom and flexibility.
Flexibility is the most significant advantage
Millennials value flexibility highly, as many are at the start of their careers. As your salary grows, you can easily move to a more comfortable place. Also, renters can decide to relocate within a month or two, which is not as easy for homeowners.
If you decide to rent, you can practically live anywhere. Living in NYC is somewhat easier for renters than for home buyers. NYC is made up of 5 boroughs and within each one is a distinct neighborhood with its own vibe and energy. Once you've found 'the neighborhood' and the apartment with rent in line with your lifestyle, you can simply pack your bags and enjoy the ultimate experience of NYC life. But, being such a busy city as it is, relocating can be a big hassle. If you plan your move thoroughly and in advance and hire reputable local movers to help you have a seamless experience, your move within New York will become significantly more manageable.
Reasons to choose to buy in NYC
Remember that NYC is not just Manhattan
On the other hand, if you are leaning towards owning a property, there are undoubtedly numerous benefits. The most important one is that houses gain value, and you are building equity by paying your monthly mortgage.
Recently, due to coronavirus, many NYC residents have decided to move to the suburbs. Many of them work from home, and their children still attend schools remotely.
If Manhattan is out of your financial reach, cheaper deals can be found in outer boroughs. The average median price in Old Mill Basin in Southern Brooklyn is 231,500$, or 247,500$ in Pelham Parkway in the Bronx.
Mortgage rates are at their lowest
Owning a home is a part of the American dream, and, as mentioned before, there are many advantages to it. Experts say that the real estate market in New York is not always favorable for buyers. However, right now, it is. The mortgage rates are currently at their lowest. The rates are expected to rise once the country recovers from the coronavirus effects.
So, if you are fond of good deals, now is the time to buy an apartment, pack your belongings and call Movage Moving to help you relocate and settle into your new home.
Deciding on whether to buy or to rent in NYC is a big decision to make, but nothing beats the feeling of safety and security when owning a home.
There are tax benefits to owning
There are plenty of tax benefits for homeowners. The mortgage interest tax deduction makes buying a home more affordable by reducing the tax bill. You can reduce your taxable income up to 10,000$ in deductible property taxes and local and state income taxes that you pay.
According to the IRS, interest paid on home equity debt can be deducted if that money is used to buy, build or improve the taxpayer's home.
Buying is a long-term investment
Real estate is almost always a good investment, mainly because home prices generally rise faster than rents. Even if you don't decide to sell, you will no longer have monthly housing payments once you pay off your mortgage. This means you will have more money in your pocket for your other needs.
The emotional benefits also count
Owning a home provides a sense of stability, accomplishment, pride, and belonging to a community. Buying a home means you can provide shelter for yourself and your family and gives you a sense of control.
Final thoughts
There isn't a fixed answer to whether you should rent or buy in NYC right now. The answer might change over time, depending on your life situation and finances. But no matter which option you choose, it is crucial to be well informed and advised based on your particular situation. Good luck!
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