THE BLOG
05/01/2014 04:33 pm ET Updated Jul 01, 2014

Rent Vs. Own: Manhattan's Continuously High Rent Encourages the Move to Ownership

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.