Buying a property in Manhattan is almost always more expensive than renting. This means that your combined monthly housing mortgage and maintenance or common charges expenses will usually be slightly higher as a homeowner versus a renter.
In addition to being more expensive than renting, buying is also a much more permanent lifestyle decision. This is because most financed buyers have essentially agreed to make 30 years’ worth of mortgage payments compared to a renter who has only signed up for a year or two of rent payments.
The long-term responsibility of having a mortgage payment means that you’ll need to consistently generate large income for decades on end.
This is very different from being a renter, whereby you have the flexibility at the end of your lease term to rent a less expensive apartment, move out of NYC and/or quit your high-paying job for something more flexible without any real consequences.
In other words, buying a property in Manhattan is signing up for 30 years of having to make a huge payment. This is very different from signing a one or two-year lease, after which you have the flexibility to take a lower-paying job, go on a sabbatical or move to another city without having to take into consideration any debt obligations.
The obvious benefit of buying is that you are building equity and paying down some principal each month compared to throwing everything away in rent. New York City real estate almost always goes up in value over the long term, and this means that you’ll grow your net worth while not wasting money on rent.
If your mortgage burden becomes too much to bear, you can also sell your apartment or rent it out to cover most of your mortgage and apartment maintenance payments.
However, selling is costly and it can be tricky if you happen to be selling in a buyer’s market. If you rent out your co-op, most buildings will charge you a fee which will erode your rental income.
The key takeaway is that there are far fewer headaches when it comes to renting versus buying in NYC.