While the price of property has continued to decline, there are definitely deals to be had. Unfortunately, the correct decision to rent or to buy is not as clear as you might think. In neighborhoods like Park Slope, renting may be less expensive when you compare that to the mortgage on purchasing the same square footage. If you are fortunate enough to find yourself in a rent stabilized apartment in a great part of town, it probably makes sense for you to continue renting (although these can be hard to come by).
Purchasing an apartment or condo is attractive to all of us. Being a homeowner is part of the American dream. It has been drilled into our heads that it’s another step in life that achieves a certain status in society. That may be true, but you need to make the best financial decision based on your circumstances. If you choose to live around the Upper East Side, you probably find yourself in a situation where your rent is far less than what a mortgage would be for the same space.
If you are serious about purchasing an apartment, you should hire an experienced appraiser to find out what the property is worth at today’s market value. This will give you a clearer picture of whether or not you can afford the mortgage versus the rent you are currently paying. You may find your rental situation is so good that the real estate market could not possibly provide the deal you currently have as a renter.
If this is the case, there are some steps you should take to protect yourself financially. Negotiate a long term lease agreement with your landlord. Lock in your rent amount as far in the future as you can (if you plan on staying in that location for a while). Invest in rental insurance in order to protect your belongings. This is critical to ensure you will stay financially whole if a catastrophe occurs. Rental insurance in NYC only costs between $15 and $30 a month. You may never need it, but if disaster strikes you will be glad you have it.