1st Year Analyst - Buy vs Rent Decision?!?!?! 
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
250K for 2BR condo in murray
250K for 2BR condo in murray hill? hahaha
Just rent. You could buy, but
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.
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Do you have family that would
Do you have family that would get in on it with you?
My family's purchasing a new 3BR condo for my sister and i... it's a lot easier if your parents can throw the downpayment on and u just do the payments.
I'm going to be a first year
I'm going to be a first year associate and am going through the same thought process. Is that how much condo's are in Hoboken/Jersey City? I would have thought they were more.
250k is not a realistic
250k is not a realistic budget.
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I laughed when I saw you
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.
jhoratio wrote: You watch
You watch too much HGTV. Rent, son.
LMAO.
I made the big mistake of
I made the big mistake of buying a house right out of college...in 2006. Rent.
No way you can buy a 2BR in
No way you can buy a 2BR in Murray Hill for 250k my friend...
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OK so assume you could find a
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.
You are dreaming at $250k. So
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:
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
I got my parents to put down
I got my parents to put down 400k. The took a loan for 500k which is currently @ approx. 3% interest. Repaymensts are manageable and condo is sweet.
Hit up your parents my boy. Thats why you clipped all that grass all your life.
Since I already own real
Since I already own real estate, I will tell you that in this market you will need two years of continous work history with the same company before you can even get approved for the loan. That should be enough to answer your question:
Rent, son.
Thanks for the comments. To
Thanks for the comments.
To specify, Murray Hill is out because it is much more than 250k. However, I can find 2BR in Hoboken which are do-able but like most of the consensus here it seems more wise just to rent. I definitely agree with the majority and realize that working in IB is going to be enough of a hassle not to mention all the headaches with owing a condo/apartment.
With that said, my parents would be willing to help out but cannot simply drop 400k. Lets say they helped me with 50% of a 20% down payment, roughly 25k...still make much more sense to rent?
Thanks for the insight.
ya dude just rent...pay the
ya dude just rent...pay the rake on being a young professional. Even if your parents put down a large %, you would still need to contribute a sizable amount. Rent, take that money and put it in the market instead.
GetRichorDieTryin
Thanks for the comments.
To specify, Murray Hill is out because it is much more than 250k. However, I can find 2BR in Hoboken which are do-able but like most of the consensus here it seems more wise just to rent. I definitely agree with the majority and realize that working in IB is going to be enough of a hassle not to mention all the headaches with owing a condo/apartment.
With that said, my parents would be willing to help out but cannot simply drop 400k. Lets say they helped me with 50% of a 20% down payment, roughly 25k...still make much more sense to rent?
Thanks for the insight.
You are still not going to get a mortgage without 2 years of continous work experience, unless your parents take it out in their name and have a great credit score and make about 150K-200K a year and do not have too much debt or too much left to pay on their own mortgage. No bank is going to give a kid straight out of college a $400,000 mortgage.
If you do get approved for a mortgage then PM me with the details and I can help you make a decision, because unlike many people that responded to this thread I would actually consider buying if you plan on staying in New York for more than a couple of years. This could be a great time to buy real estate.
But like I said, you will not get approved to take out a mortgage (nerd alert: actually the correct terminology would be: you will not be able to write a mortgage, since technically you are the one that is writing the mortgage and creating the security. The bank is buying it from you, so you are not really "taking out a mortage").
Condominium units have become
Condominium units have become a wise alternative to owning a home you would own. One of the advantages of condo is that it's less expensive to maintain, as its size is smaller than a home. Condominiums, just like traditional homes, offer advantages and disadvantages. For one, the mortgage on a condo might be half as much as a regular house, and the taxes as well, but that being said, it's still like living in an apartment. There are also Home Owners Association rules to contend with. #spam link removed by moderator#