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Re: VVP - Rent vs Buy Scenario
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think all posts have their own merits, ultimately there is macro and micro view - questions to ask:

macro:
- what tax bracket your are in? where do you see nj state / us govt heading with mortgage interest deductions / income taxes?
- are you willing to go long JC? Hudson County (in addition to Cook county, Chicago et al) is most corrupted in the country - taxes will go only up - See news tonite, last week.
- what is your view of 3yrs+ inflation?
- what is your view of JC ability to provide decent school system or JC being cheaper alternative for NYC / Brooklyn in coming years?

micro:
- what is your personal preference - rent for maintenance free living or buy to build long term equity?
- what is your time horizon - any calculator calls for 10+ yrs primary residence view.
- if you have kids, are you ok to pay for schools post k1 (up until then schools ok (st bridgets, cordero all free and decent for pre k to k1)?
- can you manage your money not tied up in downpayment well? in essence can you get better after tax return from your investing then from your after-mortgage deduction / mortgage payment return on downpayment? suggested nytimes calculator is decent place to check this. key is the assumptions you make on inflation and your after tax returns on cash you would get otherwise
- do you think your work upside is so great that potential loss on buying can be offset with extra money earned in the future?

in the end, your emotional decision should count too, but do not put too much weight on it unless your # are clear to you...btw, in times like this, getting more spiritual and life-flexible (ie no mortgage-tie up) makes sense to many.
that said, buying may make sense if you love JC / community and your long term view is that local area (NY/JC /NJ) is still worth the hassle of high living cost and your long term likes are here / your work upside tied to local area


lot of braindump here, but perhaps may help anyone interested in making this decision

Posted on: 2009/7/29 3:17
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Re: VVP - Rent vs Buy Scenario
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To the original point: Rent vs. Buy, it is not enought to make the argument that the large NEW condominiums are being decreased without considering how may newish or old condominiums are coming ONTO the market.
Nor is it sufficient to ignore the other side of the either-or, mainly, how many RENTALS are coming onto the market.

Very soon for example the 400-0dd luxury Aqua-Blu at Newport is coming online as a rental.
Certainly any increases in rentals is going to effect the Rent vs. Buy decision. If rents fall faster than housing prices the move will be to rentals regardless of how well Crystal Palace and Trump sell.



Wow, trp,
Someone on another thread was bemoaning taxes in JC and claiming how low they were "Down South." Those Charlotte taxes are anything but.

Posted on: 2009/7/20 14:06
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Re: VVP - Rent vs Buy Scenario
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Wibbit does a good job of outlining the supply case for Paulus Hook/Newport. If Wall Street just stays in a holding pattern, all else equal, that ought to bode well for working off that supply.

I think the demand side of the equation is a bit tougher to gauge. On the brownstone side, most downtown brownstones have roughly tripled since 1998. To put this in markets context, the Dow is negative 2% over the same time horizon and the S&P 500 is down 16% (not including dividends).

I wasn't here in '98 but my guess is things are a lot nicer in downtown, whether they're 3X nicer is tough to say. I think much of what fueled the RE runup was cheap money and more importantly loose credit standards. We still have cheap money but now credit standards are tough and banks are VERY risk averse. I think the new world order will be one where banks don't want to hear from you unless you can put down 20% and have sterling credit/job stats. That said I think the demand side is going to be problematic for RE buyers/owners for a long time; until average US household has a better balance sheet or a new crop of bankers come in that never read the history books.

How this impacts RE pricing is guesswork, but I think the supply side will get better slowly as the demand side stays pretty soft. I could easily see another 15-25% downside, but we're probably not going back to brownstones for 300K around VVP....

Posted on: 2009/7/17 16:37
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Re: VVP - Rent vs Buy Scenario
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I have little patience when someone without a good understanding of what they are talking about and cant be bothered to read, waste my time. There are 3 unsold constructions left in jc: - trump: 50% sold -77hudson: 35% sold, and it's 1 tower, the second tower 70 greene is a rental not a condo -crystal point: 10-25% sold, construction due to complete end of year, this is the last of the new constructions The rest gulls cove and mandalay have very few units remaining <10% and developer are not willing to lower the price to sell them. That's the new construction supply for paulus hook + newport, as i said previously supply are high right now. But the problem with your lemming mentality (same as the guys screaming prices wont fall back in 06) is you fail to look any further than what is directly underneath your feet. There are NO new high rise constructions been planned or started in this area, hence the supply we have right now is it. Market is slow, but people are buying and slowly removing the supply. On the resale side, it's flat. The grand & marin is gulls cove. If you mean LHN, i already said that is an exception previously and the area is not considered paulus hook / newport. Even then a lot of the new buildings in that area are rentals, and mostly new low rise brownstones and sutton resales on the market. Regarding wallstreet, my firm, one of the big 5, went through 11 rounds of layoffs ended around march, since then we have rehired back a lot of people/new hires. Talking with colleagues from the other major firms, story is similar - some are rehiring others stopped firing. This is mostly back/middle office (ops,tech, etc..), front-office is still very desk dependent, some are hiring others are not such as the derivatives area. Btw the people buying in jc are mostly back/middle office, no trader/ib guys will come to this side of hudson. The point is the financial job market around nyc is stablizing, not sure which wall st you are working on if you cannot see the major improvement in the nyc financial that has happened in the last 3 months. I agree with sylng, the single most important factor is future price outlook, but noone can time the bottom. As said previously, i am not expecting the price to go up, it will be flat at best with potential to drop another 10-15%, but the risk of a major crash/downward spiral is very low now. And if you are using it as a primary residence, it is an ok time to buy given other benefits - rate, tax saving, etc. Investment wise - no. Thanks for wasiting 15 min of my time to repeat everything i already said in the last 2 posts - hence my suggestion for you to reead what i wrote. Quote:
Jeebus wrote: Less layoffs is good but the uncertainty remains for all but the most Pollyannaish and rents are going down. Neither would make someone eager to buy a $500K+ condo in JC. I'm not sure which post you are referring to but if it's the one that claimed supply is going down in downtown JC, my pointing to the huge new expensive construction either unsold (plus shadow space owned by speculators) or about to come online refuted this. The twin towers at the foot of Grand alone must be the biggest residential building in JC and they have just started coming to market. Perhaps you know something about Wall Street that I (and most who work there) don't or you have some undisclosed knowledge about JC real estate. If so please lets us know, otherwise I'll take my knowledge of the situation over your condescending advice to (re)read your previous posts.

Posted on: 2009/7/17 15:51
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Re: VVP - Rent vs Buy Scenario
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Less layoffs is good but the uncertainty remains for all but the most Pollyannaish and rents are going down. Neither would make someone eager to buy a $500K+ condo in JC.

I'm not sure which post you are referring to but if it's the one that claimed supply is going down in downtown JC, my pointing to the huge new expensive construction either unsold (plus shadow space owned by speculators) or about to come online refuted this. The twin towers at the foot of Grand alone must be the biggest residential building in JC and they have just started coming to market.

Perhaps you know something about Wall Street that I (and most who work there) don't or you have some undisclosed knowledge about JC real estate. If so please lets us know, otherwise I'll take my knowledge of the situation over your condescending advice to (re)read your previous posts.

Quote:

wibbit wrote:
Quote:

Jeebus wrote:
The Wall Street job market has only gone from huge amounts of layoffs to no new hiring. I don't see that as a positive for the number of people who will buy $500K+ condos.


huge layoff to no layoff is significant. As for the rest, you should really read my post first...

Posted on: 2009/7/17 1:11
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Re: VVP - Rent vs Buy Scenario
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Quote:
trp3, all of the above is true, and to each their own. but there is one benefit of home ownership that has not been mentioned. once the mortgage is paid off, the taxes and maintenance on a property is significantly less than what it would cost to rent the same unit. housing costs drop off dramatically for the owner, while the renter would still have to dole out increasing sums of money each year (on average - due to inflation) to live in the same place.


but when is that mortgage eventually paid off???

most mortgages are 30 years.......

so when it's finally paid off, i can sell it, move somewhere cheaper so i can buy a house that costs a little less than what i currently have, and have a few bucks left

Food for thought:

I have been eyeing up North Carolina recently......the avg. cost for a 2 bedroom/2 bathroom apt. in Charlotte, 1000 sq. ft., central air, pool, workout center in the complex, and a $225 security deposit (hard to believe, but yes, $225 is the avg.) you pay $700 a month. my parents are currently paying $9000 a year in taxes for their 2400 sq. ft. home in Morris County. before you even spend a nickel on maintaining the place, $9000 in taxes already bipasses an entire year's rent on a nice apt. in Charlotte.

my sister lives in the same county, her house is 1900 sq. ft., her taxes are $9000 as well.

i simply don't see where the "investment" is.

Posted on: 2009/7/16 17:14
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Re: VVP - Rent vs Buy Scenario
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Quote:

jbear wrote:
trp3, all of the above is true, and to each their own. but there is one benefit of home ownership that has not been mentioned. once the mortgage is paid off, the taxes and maintenance on a property is significantly less than what it would cost to rent the same unit. housing costs drop off dramatically for the owner, while the renter would still have to dole out increasing sums of money each year (on average - due to inflation) to live in the same place.


However this argument assumes static taxes... Given that state & local government is growing like a weed, taxes are probably not a fixed item and maintenance costs would increase with inflation as well.

Also, don't forget about opportunity costs:

Lets say you've paid off your $500k home that has $8k/yr taxes & $200/mo maintenance. Your $660 "rent" payment ($8000/12 + $200) is not necessarily comparable to the guy down the street who has $500k in the bank, but pays $2000/mo in rent. He may pay $2000 to his landlord, but he gets interest on his $500k in the bank. That amount is unknown because he may get 0.16 on 3mo t-bills, or maybe he earns 5% investing in longer-term tax-free munis. If it's the former, you win, if it's the latter, his muni's are paying his rent with a few bucks left over for beer money...

My point is simple, paying off a home costs money, so you have to consider the opportunity cost of your money...

Posted on: 2009/7/16 15:29
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Re: VVP - Rent vs Buy Scenario
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I was going to chime in on this topic earlier, so many of my original points have already been made by others, but one other thing i'd point to is the inherent leverage in housing that doesn't exist in other investments.

When you buy a 500k house, you have to put down $100k as a down payment. If the house goes down 1% (-$5,000) you've lost 5% of your investment: 100k --->95k. If you put down only 10% of the purchase price, that same 1% move down in housing prices, loses 10% of your initial investment (i.e. 10-1 leverage). Other investments (except for maybe currencies & commodities) don't have this type of leverage. Granted, other investments have more volatility, so it's not apples to apples...but the fact remains buying a house is making a bet on the direction of property values.

Also consider that if you buy a $500k place and take on a $400k mortgage, after one year, you've amortized (paid back) a little less than $6k on the loan, so a small 1% drop in the value of you home has effectively eliminated what equity you've built up over that period.

Finally, consider the tax & maintenance "drag" on your investment. If you pay out 1.5-2% in taxes/yr and have maintenance of 0.5-1%ish, you need your investment to go up 2-3%/year just to break even... A renter pays no property taxes and most often landlords cover maintenance. Also consider that a homeowner never gets 100% of the value of their home when they go to sell, it's more like 94-95% given the high cost of real estate transactions (Broker fees, and all the rest).

Anyway, those are just some random thoughts... The NYT & Mortgage Doctor calculators are pretty good, there are tons of variables to consider when doing this type of analysis.

Posted on: 2009/7/16 15:13
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Re: VVP - Rent vs Buy Scenario
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trp3, all of the above is true, and to each their own. but there is one benefit of home ownership that has not been mentioned. once the mortgage is paid off, the taxes and maintenance on a property is significantly less than what it would cost to rent the same unit. housing costs drop off dramatically for the owner, while the renter would still have to dole out increasing sums of money each year (on average - due to inflation) to live in the same place.

Posted on: 2009/7/16 15:10
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Re: VVP - Rent vs Buy Scenario
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Quote:
Real estate is still a good investment even in this market.


again, i just fail to see that, unless you're a landlord maybe, but i was mostly talking about a family, buying vs. renting.


Quote:
trp3- I do agree that a home is a luxury with the benefits of peace of mind,potential appreciation over a long period,write offs etc. If someone has a family and makes a "smart purchase", its nice to know they can stay there as long as they can pay the bills.


everything that is listed here, i get from my apt., only the "appreciation" comes from my own investments, the peace of mind being i can easily budget my time and money every month because I know what the place will cost me every month and I never have to put fun things aside because I have to "work on the house", and the money saved every year not dumping cash into a house far outweighs whatever tax refund you might get each year, not to mention I don't have to wait all year to get it.

as for the last thing you wrote about being able to stay there...in the rare case that your landlord decided to say to you after years of on time rent payments, "you need to leave!", you can always easily find another apt.

peace of mind/benefits with a house is that it's yours and you can do whatever you want to it, whenever you want, and of course in most cases, much more space and more privacy. this is a luxury, and that's why it's so expensive.

Posted on: 2009/7/16 14:39
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Re: VVP - Rent vs Buy Scenario
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Quote:

Jeebus wrote:
The Wall Street job market has only gone from huge amounts of layoffs to no new hiring. I don't see that as a positive for the number of people who will buy $500K+ condos.


huge layoff to no layoff is significant. As for the rest, you should really read my post first...

Posted on: 2009/7/16 14:03
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Re: VVP - Rent vs Buy Scenario
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trp3- I do agree that a home is a luxury with the benefits of peace of mind,potential appreciation over a long period,write offs etc. If someone has a family and makes a "smart purchase", its nice to know they can stay there as long as they can pay the bills.

Real estate is still a good investment even in this market. Rates are still low and certain properties can cashg flow even in this area. You really need to know what your doing though. I can't tell you how many rookie investors are just hemorrhaging $$$.

Ask old time landlords and they will tell you that they've seen this before.

Real estate has again become a complex investment strategy and is no longer a glamorous hobby.

Posted on: 2009/7/16 11:49
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Re: VVP - Rent vs Buy Scenario
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they've been arguing this scenario on the radio waves quite a bit recently.

in the end, i still see a house as a luxury, not an investment. unless you plan on buying a cheap house, fixing it up using minimal amounts of money, pay low property taxes and sell the thing no more than 4-5 years later and make double what you bought it for, owning a house simply doesn't make you money. property taxes, closing costs when you buy the place, the non-stop maintenance inside and out, higher heating/electricity/water costs, getting slammed by the bank in interest through your mortgage, along with little things like being forced to move farther away from your job in order to get something you can afford which adds to transportation costs........i simply don't see the "investment".

for someone planning to live in a house for 20 years strictly because "it's a good investment" and "paying rent is like throwing your money down the drain", all the power to you, live how you want, but for me, with all that extra money I'd have leftover from not owning a home, I can invest my money better over a 20 year period on other things (and not have to replace the roof, the driveway, the boiler, the septic system, house siding, windows, mow lawns, paint walls, go to Home Depot every other weekend to buy something for the house, rake leaves, so on and so forth, in order to earn that money when i finally sell the damn place) Hell, at that rate, get a part time job as a landscaper and fixer-upper guy and actually get paid for it!

i would love to own my own home one day. small place, minimal maintenance, small yard, maybe some woods in the back......but when I do buy that house, it won't be to make money, it will simply be because I want a house and am prepared to put in the time and money that it requires.

Posted on: 2009/7/16 10:49
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Re: VVP - Rent vs Buy Scenario
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The Wall Street job market has only gone from huge amounts of layoffs to no new hiring. I don't see that as a positive for the number of people who will buy $500K+ condos.

I also don't see where your idea of downtown JC supply going down is coming from, especially in light of decreased demand. The Crystal Point is near finishing construction as are the giant twin towers at the foot of Grand St. and the new building on Grand and Marin that is still being built. On top of that there are all of the unsold condos that are sitting on the market (ever look at the Trump JC at night?).

Quote:

wibbit wrote:
yes a 10-15% drop is very possible, as confidence overall is still very low. The nyc/wall st job market is weak but has improved quite a bit since sept/lehman, i guess the important part is they are not doing massive waves of layoffs anymore.

Supply wise, i can only speak for downtown jc, yes it's still high but not increasing only going down. I cant think of even one high rise in the paulus hook/newport area that will come online (the last new construction i believe is crystal point). So supply increase for the area has pretty much stopped you are only left with resales. LHN is a different story though ;)

Posted on: 2009/7/16 3:00
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Re: VVP - Rent vs Buy Scenario
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yes a 10-15% drop is very possible, as confidence overall is still very low. The nyc/wall st job market is weak but has improved quite a bit since sept/lehman, i guess the important part is they are not doing massive waves of layoffs anymore.

Supply wise, i can only speak for downtown jc, yes it's still high but not increasing only going down. I cant think of even one high rise in the paulus hook/newport area that will come online (the last new construction i believe is crystal point). So supply increase for the area has pretty much stopped you are only left with resales. LHN is a different story though ;)

Posted on: 2009/7/16 1:08
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Re: VVP - Rent vs Buy Scenario
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Good stuff Wibbit - one thing I'd throw out there though is that yes GS put up huge numbers but Wall St as a whole is still a good 15% or so off it's 2007 headcount. So Goldman employees will get paid well if their prop desk doesn't blow up over the balance of the year, but on net there are far fewer people employed on Wall St with a 6 figure base. Furthermore, guys at Citi, BofA, etc are all nervous about comp still. Lawyers are derivative of Wall St so there may be fewer 160K first years running around too.

Layer on top the huge oversupply of condos coming to market in JC, Brooklyn and LIC and I think there may be another leg down. Probably not overnight but I see this thing just grinding down for awhile.

Another wild card is how much does the JC Council soak RE owners to pay for all their crony programs that have the city in a California way.

Time will tell, but my brownstone focused homework indicates there's a big disconnect still....

Posted on: 2009/7/16 0:40
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Re: VVP - Rent vs Buy Scenario
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this is what i wrote at beginning of 2007 everything pretty much unfolded as predicted like a textbook. At that time renting is the ONLY way to go. Quote:
To the original poster, what are you smoking? and where can i get some. The full effect of the subprime implosion hasnt started to trickle down and felt by the average home seller/buyer yet. But they sure will in the near future (~6months), that's a fact. Most people really dont understand the gravity of the situation in the subprime mortgage fallout. Yes i am sure you read the news and saw mortgage firms lined up to file for bankruptcy protection and all the investment banks rushing for the door to hedge against their exposures. But what it really means for the buyer(even those with good credit) is a large percentage of them will not be able to get the mortgage they currently can, actually far from it. For example, before with 650 rating you can qualify for a 250k loan, now you can only get a 200k or 150k loan etc. On top of that, the market is very nervous about the current mortgage approval process (which is a joke), they will tighten that up significantly as well, you will actually required to have the income you wrote down on the application, imagine that! All of this translates to a much more difficult mortgage approval = less people able to buy real estate. For sellers, it's even worse as the <5 yr arms are now due, the estimated default/foreclosure rate is 20% for the next few years on those loans. That's 1 in every 5! The market will be flooded with supply, on top of reduced demand mentioned above. It doesnt take a genius to figure out what will happen to the price.. it may not crash, but you sure will find some very nice deals by next year. http://jclist.com/modules/newbb/viewt ... id=101317#forumpost101317
Fast forward to now, 2.5 years later, couple things have changed: 1) the mortgage rate is at unrealistic level forced by the govt, we probably will not see such low rate for a decade or more once it starts to go up in 1-2 years. 2) the housing prices have dropped significantly across the board, with the less desired locations taking the most hit. Both translates to affordability has now reverted back to the mean. 3) The financial industry (the life blood of nyc, and jc) have stabilized and THINKING about making profits again, with the leaders such as goldman's already well on their way to restart the party. What all this means is the market will be flat for the next few years, so if you are renting now and plan to buy a primary residence to live in for 5+ years, it is NOT A BAD idea anymore as you will save on tax, live better etc.. The price may drop another 10-15% but the risk/reward is now at breakeven as you will lock in a very low mortgage rate and the risk of another huge crash is very low. Also location is very important in this brave new world, i would avoid most of jc and focus only on downtown/liberty harbor north/jsq path area. However if you are looking at it purely as an investment, i would still say not yet.

Posted on: 2009/7/16 0:27
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Re: VVP - Rent vs Buy Scenario
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when analyzing mortgages, you may want to check out http://www.mtgprofessor.com/

Posted on: 2009/7/15 23:56
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Re: VVP - Rent vs Buy Scenario
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Personally, I feel strongly about staying put for now and I have decided to continue renting for another two years, or so. At that time, I will re-assess my position. Obviously, most people feel very strongly about their positions and will argue them to death.

I invite all of you to use the following tool from The New York Times: New York Times Rent vs. Buy Calculator.

It is an eye-opener for a lot of people. Make sure that if you decide to use it, that you click on Advanced Settings and fill in the additional information. People make a lot of assumptions in the rent vs. buy debate, a lot of them ingrained into them by family and friends, but NYC and its surrounding areas are truly a unique beast when it comes to real estate (as it is also the case with large parts of California.) Once you factor in other criteria (especially condo maintenance fees, and other such high costs) most of the new real estate in this area is really not a good idea, even long term, unless you are banking on huge appreciation over the span of your ownership.

Posted on: 2009/7/15 21:38
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Re: VVP - Rent vs Buy Scenario
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Jaded, you're absolutely right about the time horizon being critical. Rent appreciation will typically quickly outstrip the interest premium being paid by the buyer, and then through value appreciation and tax benefits a typical breakeven of the NPV's of both scenarios should be 8-10 years (with very conservative estimates).

Tax increases and maintenance should (I emphasize should because this depends on the rental appreciation that can be commanded in the market place) be essentially the same in both scenarios, since the landlord will have to cover these anyway.

Any investment horizon less than 5 years in real estate is pure speculation, anything less than 10 years is risky.

Posted on: 2009/7/15 20:25
I'd go over 12 percent for that
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Re: VVP - Rent vs Buy Scenario
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I think the rent vs. own debate is oversimplified when people only look at the monthly outlays for the two scenarios. There is no simple answer because a lot also depends on a person's time horizon for staying in a particular place. The most compelling argument in favor of buying, even if the property's value were to remain flat, is that at the end of the day you've got equity to show for all the monthly payments you've been making. That's an asset under your name. As a renter, you've got squat to show for it. Someone else gets all the equity.

Posted on: 2009/7/15 18:18
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Re: VVP - Rent vs Buy Scenario
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It will be a bad situation for the next few years if rates go up a few points. again I have tried to factor all of this in when I say 15 yrs or more to really see the fruits of ones labor.

30 yr fixed rates can at the least help current owners/investors. Six years ago I remember these clown mortgage brokers telling me go with the 5 and 7 yr arms. luckily, I didnt listen.

The only positive for owners/investors is that rents will most likely increase if rates go up.

Posted on: 2009/7/15 17:41
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Re: VVP - Rent vs Buy Scenario
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Great thread. Should be mandatory reading for renters and buyers coming to JC.

A few years ago, ca. 2006, I didn't even get far enough to scribble numbers on a napkin or need to use a calculator... Only common sense was necessary to know that renting an apt. for $1400 / month beats buying for $500+K.

These days I find myself reaching for the calculator more often because the spread between renting and buying has narrowed. But I think prices of homes in downtown Jersey City have yet to "rationalize" to a sustainable level. i.e., working people still can't pay the monthly cost of buying a property around here. Unless another wave of foreigners/old-money folk come out of the wood work, I expect home prices to continue to trend downward / remain flat for at least 3 years in this area.

One other thought/fear I've been chewing on: All this depreciation in home values is occuring with near-record low mortgage interest rates. What happens if the not-at-all-unlikely prospect of higher interest rates comes into play?

Posted on: 2009/7/15 17:35
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Re: VVP - Rent vs Buy Scenario
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I agree with both of your comments. Even in a good market condos usually aren't a smart move. the developer is the one making the smart move.

I know alot of owners that cant sell for what they purchased for and are in the red if they rent. I told them what to do but I can only bring the horse to water....

Atleast with the brownstown you can condo convert it and maybe squeek a small profit.

Posted on: 2009/7/15 17:28
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Re: VVP - Rent vs Buy Scenario
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New Heights - I'm looking at this from the perspective of an individual or a family looking to buy or rent a place. I think it's safe to assume that most buyers aren't looking to be a landlord. I understand your criteria for a 3 or 4 family, but I think it only applies to a small percentage of buyers.

From what I'm seeing around VVP, there is no case to buy given what you can get from a rental standpoint...

Posted on: 2009/7/15 17:08
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Re: VVP - Rent vs Buy Scenario
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NewHeights, you are right that if you have $800k that is a property for you, but that does not apply to most people.

And btw, my rent may be due on the 5th, but the homeowner has his or her mortgage, property taxes, homeowners insurance and potentially PMI due on the same day.

After doing a lot of looking in this area, unless you have quite a bit of spare cash sitting around and are planning on living here long-term (I agree with you, 15yrs or so) you should be renting.

Posted on: 2009/7/15 16:45
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Re: VVP - Rent vs Buy Scenario
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From an investment stand point that makes zero sense. That type of property is for someone with serious cash lto put down ($800k or more) and rent the other unit out and when rents stabilize raise accordingly.

There are a ton of decent 3 and 4 families etc that if you purchase 20% down and lived in one of the units the other 3 tenants will cover the over head.

Again for the 100th time Real Estate is long term. 15 yrs or so. believe me if you can make a "smart purchase" and hold for a long time you are way ahead of a renter.

The more of you that disagree with me the better. just remember your rent's due by the 5th of each month or there is a late fee.

Posted on: 2009/7/15 16:35
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Re: VVP - Rent vs Buy Scenario
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I've talked to a handful of architects that note while brownstones have a ton of character, they are much more expensive to work on than new construction. Seems to me that a condo in a brownstone is not the way to go unless the price is so cheap that it offsets the brutal tax bill and future repairs likely to occur.

I'm blown away at just how bad the taxes are on condos in JC. It's not like your getting good schools for your dough. I guess you're right: game the system or look elsewhere. Quite sad...

Posted on: 2009/7/15 15:13
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Re: VVP - Rent vs Buy Scenario
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Quote:
mfadam wrote:
I've been researching brownstones and condos within brownstones around VVP. Can anyone explain why property taxes on a condo that takes up half a brownstone are as much or more on entire brownstones being sold?


When one of those brownstones is gut renovated and converted into multiple condo units, the city then reasseses the value of the property as "new" construction, based upon the selling prices of the units. To add insult to injury, of course, many of these condo buyers find out that these homes require more repair and maintenance costs than most new construction. If the brownstone was simply left alone and sold as is, then the value remains at the last assessment for that property, which would've been more than 20 years ago. Hope this helps. You may be better off buying into one of those big new developments for the 30-year tax abatement. If you can't beat the system, you might as well find a way to make it work for you.

Posted on: 2009/7/15 14:27
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Re: VVP - Rent vs Buy Scenario
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I've been researching brownstones and condos within brownstones around VVP. Can anyone explain why property taxes on a condo that takes up half a brownstone are as much or more on entire brownstones being sold?

9k in prop taxes for a 1250sf condo is insane when you often pay the same amount on an entire brownstone? Is there a method to this or is it just totally arbitrary like many JC things???

Posted on: 2009/7/15 14:18
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