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Buying vs. Renting an Apartment in NYC


It’s the age old question. Does it make more sense to buy or rent an apartment in New York City? The answer is a personal one and depends largely on the time and money you have to invest.

Importantly, New York City is among the most expensive places to live in the US, second only to San Francisco. According to 2019 Miller Samuel Reports, the median rent for a one-bedroom is $3,500 in Manhattan, $2,852 in Brooklyn and $3,000 in Queens. The median purchase price is $1,075,000 in Manhattan, $765,000 in Brooklyn and $550,000 in Queens. For most NYC residents, the option to buy just isn’t on the table. But for those in a more favorable financial situation, the question of buying vs. renting is an important one that can significantly affect their financial health.

Here are 3 important factors to consider when deciding whether you should buy or rent an apartment in NYC:*

  1. Short vs. Long Term
    If you only plan to stay in your apartment for a couple of years, and you don’t have a spare million dollars for an all cash deal, renting is the better option. Roughly 5.4 million people (63% of residents) in New York City rent their homes, so you’ll be in good company. Not only is it more cost-effective for the short-term, but it also saves you the effort of the 3-6 month journey to buy and then again sell your home. If you were to buy, you would be just two years into a 15- or 30-year mortgage, which wouldn’t have built enough equity to make money in the transaction.
  2. The Tipping Point
    When renting an apartment, there comes a time when the cost of renting exceeds the cost of owning. StreetEasy calls this the tipping point, which in New York City can take an average of 5-6 years to reach. If you do plan to stay in the same apartment that long, and you do have the funds, buying is the smarter option. And this is true not only for the cost but also the equity. Each mortgage payment is an investment in real property that you can sell or borrow against in the future, while each rent payment is money you’ll never see again. A great way to determine the tipping point for your apartment is to use a Buy vs. Rent Calculator.
  3. Money & Mortgages
    Some people find themselves just at the borderline of being able to buy. They may have some or all of the required down payment (typically 20%), a good job and decent credit. In this case, you really have to sort through the numbers. For example, if you are looking to buy a home worth $800,000, the required down payment would be $160,000. Now there are a number of city and federal programs that offer assistance with down payments, particularly for first-time homebuyers. In some cases, they can reduce it to as low as 3.5%. However, this will likely affect the mortgage rate you get and whether you will be required to buy mortgage insurance. Of course with a lower down-payment the balance will be that much higher, which typically results in higher monthly payments. It’s not unlike being offered a credit card with an extremely high APR rate because of a low credit score. The question is whether you will be in over your head or can find a way to make it work. Many pundits agree that if you don’t yet have the money needed up front, it is probably a sign that it’s too early for you to buy.


There is no one-size-fits-all solution to decide whether you should rent or buy an apartment in NYC. But by taking these expert tips into consideration, you will be well on your way to making the decision that best suits your needs.

For more information on renting or buying a home in NYC, or any real estate questions you may have, contact Batra Group at (646) 202-1877

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