Private school but rent?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Renting has been more beneficial for so many years now. We sold three properties to become renters. Should have never bought them.

Owning can be beneficial. The outer borough and suburbs have appreciated over time. It forces people with bad spending habits to save.


In addition, the math isn’t straightforward. If are wealthy enough to own a place that can host and impress guest with the view (increase networking opportunity), privacy / security of knowing everyone in the building, etc…

We rent in a family friendly building on UES. Lots of people know each other, people have been here 10 plus years.

While that might be true, I know plenty of people who regret not buying (especially outside of Manhattan). Since the 90’s the wealth gap continues to grow due to the inflationary environment we live in. Real estate is one of the few investment vehicles you are allowed to be over leverage and have the debt depreciate over time due to inflation and tax deductions in mortgage interest payments.

It’s pretty obvious you’re kind of screwed if you’re in your 40s in Manhattan with kids and still renting.

It’s not like it’s cheap to rent in NY. Many families paying $10-12k a month to rent a decent apartment. Even if you make a million a year, by the time you pay nannies, 2 in private school, taxes, retirement accounts etc there isn’t much leftover.

Our friends still renting say it’s a better deal but when they move out, all they get back is a security deposit. When I move out, I’ll get a check for over a million dollars. I highly doubt they’ve saved that much more renting that it makes up for a levered investment.

For us, renting a $15k apartment is about 3 percent of our annual net income and worth the flexibility. Also in our 40s with 2 kids at independent schools. You get better returns on S&P.

How much are you actually saving out of your $5 million salary though? At least a million a year?

I know a few families in the $2-3 million range who rent and spend every penny. If you’re in the NY scene you can spend $200k alone on private clubs. It goes fast.

I do think there are wealthy individuals in Manhattan who rent but big spenders are way more common

Repeat - you need to find other families.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lot of the benefit of buying is non-financial. In some instances it’s just a different product not available on rental market. Can’t really rent on Park or 5th. Co-op rules create a better environment - people who actually live there as their primary home, some element of screening, strong community where you know your neighbors. Obviously, there are dysfunctional co-ops too but the good ones are worth it.

This. Buying is a consumption and lifestyle decision. Buying in Manhattan hasn’t been a good financial decision for over a decade and your property won’t keep up with inflation. It doesn’t matter if it’s a townhouse, coop, or condo. If you’re looking at areas flush with luxury rentals, you’re a fool to buy thinking it’s an investment.

Except buying can lock in housing costs.

Not in NYC. You have monthly maintenance and insurance. Monthlies have outpaced inflation by a good deal and this went on pre COVID. Health insurance, doorman unions, and deferred capex have gotten out of hand. If you want predictable property taxes then move to a state that limits annnual increases.

1-3 family houses have preferential property tax and you have control over maintenance. Many civil servants are millionaires in the outer borough.

People posting here aren’t working for the city and living in bay ridge or Whitestone. Almost all will live in apartments in Manhattan or BK, with a handful who are rich and buy townhouses.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Renting has been more beneficial for so many years now. We sold three properties to become renters. Should have never bought them.

Owning can be beneficial. The outer borough and suburbs have appreciated over time. It forces people with bad spending habits to save.


In addition, the math isn’t straightforward. If are wealthy enough to own a place that can host and impress guest with the view (increase networking opportunity), privacy / security of knowing everyone in the building, etc…

We rent in a family friendly building on UES. Lots of people know each other, people have been here 10 plus years.

While that might be true, I know plenty of people who regret not buying (especially outside of Manhattan). Since the 90’s the wealth gap continues to grow due to the inflationary environment we live in. Real estate is one of the few investment vehicles you are allowed to be over leverage and have the debt depreciate over time due to inflation and tax deductions in mortgage interest payments.

It’s pretty obvious you’re kind of screwed if you’re in your 40s in Manhattan with kids and still renting.

It’s not like it’s cheap to rent in NY. Many families paying $10-12k a month to rent a decent apartment. Even if you make a million a year, by the time you pay nannies, 2 in private school, taxes, retirement accounts etc there isn’t much leftover.

Our friends still renting say it’s a better deal but when they move out, all they get back is a security deposit. When I move out, I’ll get a check for over a million dollars. I highly doubt they’ve saved that much more renting that it makes up for a levered investment.

lots of co-ops have had minimal price appreciation in the last decade.

Getting a similar apartment to a 10k rental costs a ton more, probably like 15-18k a month. So even if you bought a decade ago, you are barely ahead by buying and that doesn't include the return on the downpayment.

You are probably behind if you bought unless you bought pre 2010. The downpayment would have went sky high in the market.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lot of the benefit of buying is non-financial. In some instances it’s just a different product not available on rental market. Can’t really rent on Park or 5th. Co-op rules create a better environment - people who actually live there as their primary home, some element of screening, strong community where you know your neighbors. Obviously, there are dysfunctional co-ops too but the good ones are worth it.

This. Buying is a consumption and lifestyle decision. Buying in Manhattan hasn’t been a good financial decision for over a decade and your property won’t keep up with inflation. It doesn’t matter if it’s a townhouse, coop, or condo. If you’re looking at areas flush with luxury rentals, you’re a fool to buy thinking it’s an investment.

Except buying can lock in housing costs.

Not in NYC. You have monthly maintenance and insurance. Monthlies have outpaced inflation by a good deal and this went on pre COVID. Health insurance, doorman unions, and deferred capex have gotten out of hand. If you want predictable property taxes then move to a state that limits annnual increases.

Strongly disagree. Rent increases are often very large in NY. Property taxes and maintenance is still just a % of your overall payment. Once you’re 10-15 years into ownership your housing expense should start to seem like a great deal. It’s how people stay in the city long term. If you only view it short term, then sure.

Any built out rent v buy calculator like the NYT provides will show a break even of about 20 years, often never. 10-15 is overly optimistic, and life circumstances change. More kids. Downsizing. Retirement. Moving for a new job. Kids knew school. Being locked into that time horizon and s less than ideal and planning for more than 8 years (the break even in normal markets) is a fools errand.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lot of the benefit of buying is non-financial. In some instances it’s just a different product not available on rental market. Can’t really rent on Park or 5th. Co-op rules create a better environment - people who actually live there as their primary home, some element of screening, strong community where you know your neighbors. Obviously, there are dysfunctional co-ops too but the good ones are worth it.

This. Buying is a consumption and lifestyle decision. Buying in Manhattan hasn’t been a good financial decision for over a decade and your property won’t keep up with inflation. It doesn’t matter if it’s a townhouse, coop, or condo. If you’re looking at areas flush with luxury rentals, you’re a fool to buy thinking it’s an investment.

Except buying can lock in housing costs.

Not in NYC. You have monthly maintenance and insurance. Monthlies have outpaced inflation by a good deal and this went on pre COVID. Health insurance, doorman unions, and deferred capex have gotten out of hand. If you want predictable property taxes then move to a state that limits annnual increases.

1-3 family houses have preferential property tax and you have control over maintenance. Many civil servants are millionaires in the outer borough.

People posting here aren’t working for the city and living in bay ridge or Whitestone. Almost all will live in apartments in Manhattan or BK, with a handful who are rich and buy townhouses.

I have met a few families who bought in Harlem and manage to put their kids through private with renting the additional units.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lot of the benefit of buying is non-financial. In some instances it’s just a different product not available on rental market. Can’t really rent on Park or 5th. Co-op rules create a better environment - people who actually live there as their primary home, some element of screening, strong community where you know your neighbors. Obviously, there are dysfunctional co-ops too but the good ones are worth it.

This. Buying is a consumption and lifestyle decision. Buying in Manhattan hasn’t been a good financial decision for over a decade and your property won’t keep up with inflation. It doesn’t matter if it’s a townhouse, coop, or condo. If you’re looking at areas flush with luxury rentals, you’re a fool to buy thinking it’s an investment.

Except buying can lock in housing costs.

Not in NYC. You have monthly maintenance and insurance. Monthlies have outpaced inflation by a good deal and this went on pre COVID. Health insurance, doorman unions, and deferred capex have gotten out of hand. If you want predictable property taxes then move to a state that limits annnual increases.

1-3 family houses have preferential property tax and you have control over maintenance. Many civil servants are millionaires in the outer borough.

People posting here aren’t working for the city and living in bay ridge or Whitestone. Almost all will live in apartments in Manhattan or BK, with a handful who are rich and buy townhouses.

I have met a few families who bought in Harlem and manage to put their kids through private with renting the additional units.

People here aren’t doing that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Renting has been more beneficial for so many years now. We sold three properties to become renters. Should have never bought them.

Owning can be beneficial. The outer borough and suburbs have appreciated over time. It forces people with bad spending habits to save.


In addition, the math isn’t straightforward. If are wealthy enough to own a place that can host and impress guest with the view (increase networking opportunity), privacy / security of knowing everyone in the building, etc…

We rent in a family friendly building on UES. Lots of people know each other, people have been here 10 plus years.

While that might be true, I know plenty of people who regret not buying (especially outside of Manhattan). Since the 90’s the wealth gap continues to grow due to the inflationary environment we live in. Real estate is one of the few investment vehicles you are allowed to be over leverage and have the debt depreciate over time due to inflation and tax deductions in mortgage interest payments.

It’s pretty obvious you’re kind of screwed if you’re in your 40s in Manhattan with kids and still renting.

It’s not like it’s cheap to rent in NY. Many families paying $10-12k a month to rent a decent apartment. Even if you make a million a year, by the time you pay nannies, 2 in private school, taxes, retirement accounts etc there isn’t much leftover.

Our friends still renting say it’s a better deal but when they move out, all they get back is a security deposit. When I move out, I’ll get a check for over a million dollars. I highly doubt they’ve saved that much more renting that it makes up for a levered investment.

For us, renting a $15k apartment is about 3 percent of our annual net income and worth the flexibility. Also in our 40s with 2 kids at independent schools. You get better returns on S&P.

How much are you actually saving out of your $5 million salary though? At least a million a year?

I know a few families in the $2-3 million range who rent and spend every penny. If you’re in the NY scene you can spend $200k alone on private clubs. It goes fast.

I do think there are wealthy individuals in Manhattan who rent but big spenders are way more common

We save plenty, not part of the scene or clubs and no interest in that life. Our major costs are school, extracurriculars, nanny and rent. We own a beater car we take the kids hiking/camping in but take the train otherwise, eat at nice places a couple of times a month, take a couple of nice vacations a year and help pay for my sibling's college. All done within a mil. Kids schools and college are accounted for. We'll think about buying a place once kids are in college.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lot of the benefit of buying is non-financial. In some instances it’s just a different product not available on rental market. Can’t really rent on Park or 5th. Co-op rules create a better environment - people who actually live there as their primary home, some element of screening, strong community where you know your neighbors. Obviously, there are dysfunctional co-ops too but the good ones are worth it.

This. Buying is a consumption and lifestyle decision. Buying in Manhattan hasn’t been a good financial decision for over a decade and your property won’t keep up with inflation. It doesn’t matter if it’s a townhouse, coop, or condo. If you’re looking at areas flush with luxury rentals, you’re a fool to buy thinking it’s an investment.

Except buying can lock in housing costs.

Not in NYC. You have monthly maintenance and insurance. Monthlies have outpaced inflation by a good deal and this went on pre COVID. Health insurance, doorman unions, and deferred capex have gotten out of hand. If you want predictable property taxes then move to a state that limits annnual increases.

1-3 family houses have preferential property tax and you have control over maintenance. Many civil servants are millionaires in the outer borough.

People posting here aren’t working for the city and living in bay ridge or Whitestone. Almost all will live in apartments in Manhattan or BK, with a handful who are rich and buy townhouses.

I have met a few families who bought in Harlem and manage to put their kids through private with renting the additional units.

People here aren’t doing that.

I can think of two families off the top of my head who did. Usually just renting out ground floor for not a ton so it didn't make a huge difference in the math but probably put a nice dent in one private school tuition.

[Anonymous]

Mortgage is higher than maintenance so locking in mortgage means that increases in maintenance aren't a huge change in annual housing costs. We locked in our mortgage when rates were low. Deduct the first $1 million of mortgage interest. The math is probably pretty close. And we are in a place that we love in our ideal location and customized our place to how we like it. Been here for 10+ years and expect to be here many more.

Buying is not a slam dunk decision and a lot of it involves luck. I wouldn't overpay and buy in a place you don't like just for the sake of owning, since you still have to live there. But if you are pretty sure you will be in the city for a while and find a place you like at what seems like a decent price, it often makes a lot of sense.

[Anonymous]

God our coops assessments in the past five years are pushing us to sell. Above 7k common charges and taxes, we have a new assessment for four years for god knows how much and we just finished a previous assessment. We have two kids at private and honestly wish we were renting.

[Anonymous]

Anonymous wrote:God our coops assessments in the past five years are pushing us to sell. Above 7k common charges and taxes, we have a new assessment for four years for god knows how much and we just finished a previous assessment. We have two kids at private and honestly wish we were renting.

2BR or 3br? Either way, a very common story. Renting would cheaper for about 20 years. By then you'd wish you were downsizing or retiring elsewhere. So financially, no point in buying.

[Anonymous]

Lots of people with children at private school rent their apartment, in many cases they could easily afford either but prefer renting

[Anonymous]

Anonymous wrote:God our coops assessments in the past five years are pushing us to sell. Above 7k common charges and taxes, we have a new assessment for four years for god knows how much and we just finished a previous assessment. We have two kids at private and honestly wish we were renting.

We keep having assessments because a jerk in our building (pretentious TT parent) keeps dreaming up ways to spend my money on special projects to keep him busy. Some of them are nice amenities that theoretically add value, but some are projects to keep him entertained. He controls enough votes to stay on the board and the rest of the board rolls over for him. Meanwhile he abuses the staff. Miserable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:God our coops assessments in the past five years are pushing us to sell. Above 7k common charges and taxes, we have a new assessment for four years for god knows how much and we just finished a previous assessment. We have two kids at private and honestly wish we were renting.

We keep having assessments because a jerk in our building (pretentious TT parent) keeps dreaming up ways to spend my money on special projects to keep him busy. Some of them are nice amenities that theoretically add value, but some are projects to keep him entertained. He controls enough votes to stay on the board and the rest of the board rolls over for him. Meanwhile he abuses the staff. Miserable.

I wouldn’t own an apartment unless the money didn’t mean much to me. The equity is going to be wiped out the way the land lease buildings have been going. For me it is townhouse or rent.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:God our coops assessments in the past five years are pushing us to sell. Above 7k common charges and taxes, we have a new assessment for four years for god knows how much and we just finished a previous assessment. We have two kids at private and honestly wish we were renting.

We keep having assessments because a jerk in our building (pretentious TT parent) keeps dreaming up ways to spend my money on special projects to keep him busy. Some of them are nice amenities that theoretically add value, but some are projects to keep him entertained. He controls enough votes to stay on the board and the rest of the board rolls over for him. Meanwhile he abuses the staff. Miserable.

I wouldn’t own an apartment unless the money didn’t mean much to me. The equity is going to be wiped out the way the land lease buildings have been going. For me it is townhouse or rent.

Why would the equity be wiped out if you are not in a land lease building? Curious how you reached that conclusion.