It is no secret that New York City apartment rental rates have skyrocketed. These days, those NYC residents unwilling to fathom the high rent any longer have sought out a solution: buy.
Median rent in Manhattan in March 2014 was $3,200 per month, which cumulates to a high $38,400 after a full year of payments. A one bedroom Manhattan co-op runs at a median price of $550,000 with a 10 percent down payment or $55,000, which is the minimum required by most co-ops. With the cost of the down payment less than two years rent, longtime renters are encouraged to take the purchase route rather than continuously rent.
The New York Times ran a piece on David Park and Mark Burleson's road to ownership after two years of renting. Their two years rent totaled $72,000 compared to the $67,000 10 percent down payment paid for the studio they wound up purchasing. Many don't realize just how much a couple years' rent is, especially in comparison to ownership -- Park stresses, "I didn't think about it once a month, but when I go back, it shocks me."
However, many renters in New York City are unable to purchase an apartment. On top of qualifying for a mortgage, co-ops, which are less expensive than condos, require proof of savings and income in order to ensure resident's ability to pay monthly common charges and to avoid quick re-sales. As of 2012, approximately two-thirds of New York City households rent, according to the NYU Furman Center and Capital One. With such high rent prices, I will be watching to see if those qualified to buy make the switch.
Have you been affected by New York City's sky high rent -- have you already put an end to your renting days? Leave your stories below, I'd love to hear them.