By Joe Moshé
The economic climate has made it challenging to find a place to live, especially on Long Island. The New York State Association of REALTORSⓇ (NYSAR) recently reported that homes in Suffolk were going for $675,000 last month, while, in Nassau, sales prices exceeded $800,000.
Renting has gotten just as expensive — so much so that a rent payment can be just as much, or even more, than a mortgage payment. Depending on what size apartment you want, it could run you between $2,000 a month for a studio and $19,000 for a four-bedroom (or larger) apartment in Suffolk. In Nassau, rents can range from $2,676 a month for a one-bedroom apartment to $4,383 a month for a three-bedroom apartment.
Before You Buy or Rent
If you’re looking to buy a house, check to see how much money you have saved up. All prospective buyers should research all options of getting more money down for their deposit, such as applying for grants, borrowing money from parents and relatives, and putting away any disposable income in the bank, as opposed to spending it on lifestyle expenses, such as eating out or going out to the movies. I also suggest they speak to an accountant or a financial planner to assess their ability to purchase a home.
For those looking to build wealth and equity and who want to plant roots in the neighborhood, I would recommend buying a home. But if the cost of a house is too prohibitive, I would definitely say renting is the best option.
Here are some advantages to renting over owning:
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Your monthly rent payment does not have any interest rates attached, unlike a mortgage, so you pay whatever the rent is.
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Since you are paying rent and not a mortgage, you are not locked into a 15- or 30-year term. If you find a home, you can move out of the apartment whenever you want.
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In some cases, there is rent-to-own in which the tenant will pay extra money on top of the rent in order to buy the home in the future.
However, there are some disadvantages to renting:
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The landlord may not allow you to make certain repairs or replace certain appliances. They may have their own contractors, which means it will cost you more for someone to make these repairs.
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Some of the homes for rent may have absentee landlords. If the refrigerator breaks down or if a pipe bursts and your landlord cannot be reached, what do you do? I’m not talking a day or two — I mean weeks or even months.
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The parking situation may also be a problem. If your family owns two cars, will they allow parking for two cars or just one? Also, if the house has an accessory dwelling unit and someone is renting the house, it may be a battle to get that spot.
With the current economic climate, the lack of available homes and the high sales prices, some people have gravitated towards renting. Meanwhile, those who have constantly saved up for years until they were able to get the house of their dreams will put their money down.
Charles Rutenberg Realty Broker Joe Moshé is a longtime real estate entrepreneur and industry innovator who helped reshape the modern real estate brokerage model. Since establishing the family-owned company in 2006, Mr. Moshé has built a reputation for flexibility, strong compliance standards and a deep commitment to agent education and support. Under his leadership, the company became known as a forward-thinking brokerage focused on empowering agents while maintaining high professional standards throughout the industry.