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Fellas,

Since I have landed (thankfully) a FT analyst position with a BB, I am now looking into what my options are for housing starting this summer. Obviously, I can be like the majority and rent as close as possible to my building in Mid-town, however I was thinking about purchasing a place instead. Call me crazy if you may - but I have been looking into possibly purchasing a place in HOBO, Jersey City, or Murray Hill just to avoid having to rent and waste all that money.

Here's what I'm thinking: Based upon a 70k salary, 15k savings, and 40k bonus I will have approximately 125k (Pre Tax).

Buy a 2BR condo for 250k and have a roommate pay monthly rent of $950.

With a 6% - 30 year mortgage my payments including maintenance fees would be around $2,200. So, Instead of renting in Mid-town or Murray Hill for around $1250 a month, I bite the bullet and buy a place where I have some equity at stake. Also, assume I will live frugally and only purchase necessary expenses (food, utilities, clothes, and the occasional social events)

Please let me know your thoughts and possibly any experiences you guys out there might have had/or knew someone in a similar boat. I know it may be a bit over my limit, but I'd much rather take this opportunity to purchase a small place while prices are at relative discounts, instead of pissing it away on rent every month then having nothing to show for it.

PM if you want more details or to talk personally.

Thanks for all your thoughts and insights

Comments (17)

  • TNA's picture

    Just rent. You could buy, but now you become a landlord, homeowner, new investment banker, etc. Do you really want to work all day and deal with all those headaches? Suppose your bonus sucks, roommate moves out, pipes burst, taxes increase, get laid off and have to move, etc. Just not worth the hassle at this point in your life.

  • jhoratio's picture

    I laughed when I saw you didn't want to rent because you didn't want to "waste money." Well, in addition to tying up an assload of capital in the form of a down payment, the mortgage payments are mainly interest for the first few years of any loan and then property tax plus all repairs are your responsibility. No wasted money? You've got to be kidding me. You watch too much HGTV. Rent, son.

  • UncleKevin's picture

    OK so assume you could find a place for 250. Finance most of it at 5% and interest alone is around 1000 a month. Since these guys think the place will be more than you'd pay even more in interest. Def rent!

    Think about the opportunity cost of that cash too. Take out the loan and put it in the DOW and rent.

  • CaptK's picture

    You are dreaming at $250k. So that $2,200/month you project is going to be a lot higher than that. Not to mention any HOA fees your building may assess. Also, as others have mentioned - being a homeowner is a pain in the ass.

    Do you intend to stay in NYC after your analyst stint? Are you sure? What if you get offered a great position at a West Coast PE firm? If you only own it for two years and have to sell, that condo is definitely not going to be a moneymaking proposition.

    In the words of jhoratio:

    Quote:
    Rent, son.

    - Capt K -
    "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham