Who pays $3.5k for a studio in NYC?

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idaho - Certified Professional
Rank: Neanderthal | banana points 3,477

I'm currently looking at apartments in Manhattan, aiming for around $2k or less in rent. I'm seeing a decent number of walkup 1 bedrooms around that pricepoint and many more if I increase my spending limit. However, there are a number of highrises with small studios that are going for ~3.5k. (e.g. here)

What's the incentive for someone to pay significantly more for a studio than a one-bedroom? I'm just confused as to who the market is that would pay $1k more for a studio in a nice building instead of a decent one-bedroom, especially as I've always considered studios to be cost-saving options. Thoughts?

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Comments (40)

Apr 15, 2017

If I had a daughter that premium of having a door man would make up for the money.

Apr 15, 2017

Amenities and convienence. I mean who cares about 1bd room vs a studio? You're paying more for not walking up stairs, having a gym, etc.

It's insane pricing, but it's NYC. Nature of the beast.

Apr 15, 2017

There are doorman buildings out there for less though. Tudor City has doormen and a gym and that's under 2k, so I'd imagine there are other options between that pricepoint and 3.5k. I guess the amenities do outweigh a discrete living room for some people.

Apr 15, 2017

must be a real shitbox or it doesn't exist for under 2k.

Apr 15, 2017

I think Tudor City is just isolated and in Midtown East, which is pretty far below the market in the rest of Manhattan at this point.

EDIT: Which could very much imply "shitbox"

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Apr 15, 2017

Isn't Tudor city near the water? Like real quiet and isolated? I'd imagine you'd find some places in Kipp's bay and Murray hill for a decent price. Dated stock, but OK.

It's really what people value. Plenty of ways to spend money that is unnecessary. One could say 2k is a lot when you could live in jersey city or NJ for less. All perspective.

Apr 15, 2017

Def dated stock. Not a terrible location, yes very much like Murray Hill/Kips Bay but with worse food. JDS has a project/land huge parcels which he has not developed in forever, right on the water. Maybe just a little south.

But "comps" the biggest building comparable on 34th street and the water is the Rivergate and those apartments are not cheap, they are dated and have doorman and also in the middle of nowhere(at least 15 minutes to get to a subway). The 5 story walkups that bridge murray hill with tudor city probably run 2k for a studio. Another comparison is the Sutton Place is right by the water, isolated, and yet by the unattractive Queensboro Bridge. Somehow this has not affected prices in that neighborhood.

Good point on NJ, certain people value certain things over others.

Apr 15, 2017

Good assessment and thanks. Moving to NYC and expecting cheap and good is a bad idea. You can have one or the other. IMO, if you want to conserve money, find a job in another major metro. Or get roommates.

What's funny is the difference between 2k and 3k is 12k a year. Nothing compared to what NYS robs from you with their taxes. You need to see things in perspective.

Apr 16, 2017

GF spent her 1st year IB bonus on the 20% downpayment to buy a studio in Tudor City. Smartest decision she's made since moving to NYC considering she's paying less per month on the mortgage (tax deductible) than her friends are paying in rent for non-doorman apartments that have shittier interiors and roommates for $2k+/month. Waterfront or midtown views, 10 minute walk from Grand Central, and local parks already adds to a nice location.

"Shithole" is an interesting adjective for a location that draws at least 10 film/T.V. shoots per year, including most recently a scene in the upcoming Punisher movie. Sure, it's not a mod building but I'd take equity over pure cash-burn. Not to mention when we upgrade to a 2-bedroom we'll be able to rent it out for $1.5-2k/month for a few years as passive income.

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Apr 16, 2017

re-read what I wrote.

Also, are you investing with your GF? Dude, terrible idea.

Apr 16, 2017

"must be a real shitbox or it doesn't exist for under 2k." - C.R.E. Shervin

That doesn't seem to leave much to interpretation.

Soon-to-be fiance actually. The apartment since purchase 2 years ago has already appreciated $50k. She's on the investment team of a top hedge fund so I'm going to say she probably understands more about ROI than you.

I'm also going to go out on a limb and say you don't have a whole lot of experience with successful long-term relationships if you think investing doesn't happen in them. What do you think are the underlying principles of marriage?

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Best Response
Apr 17, 2017

where in your answer does anything you say refute that a RENTAL of a studio under 2k in this area is not a shitbox

Soon-to-be-fianace. She has to say yes first. What are you...engaged to be engaged? You sound fucking 22.

Have friends that work at hedge funds, they know dick about real estate.

Yes, you are and IDIOT if you think investing with a short term partner is a good idea. Investing together WHEN married, fine. That makes sense because all your assets are tied together anyway. Also since you are not married it's her apartment.

I've been married for 3 years and have know her longer than you have been getting erections in your short life

Apr 16, 2017

We've been together for 6 years and just designed the ring together, so I'm going out on a limb to say she's probably going to say yes and that we may have been together longer than you've known your wife. The real estate investments are attached to a family-run LLC as a form of passive income because the industry really doesn't take a whole lot mental capacity to generate return (see Trump). I'm directly comparing similar-sized studios in Manhattan and concluding you can get equal or better quality of living in Tudor City for a lower price point, a simple point which seems to be lost on you for some reason. The equity from owning the apartment over renting is free upside in this case.

Any other terrible assumptions or poorly-drawn conclusions you'd like to make? So far you're on a roll.

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Apr 17, 2017

I've never seen anyone get so offended by someone calling their GF's apt a shit-box. Relax man.

And yes, anything under 2k w/ a doorman implies shit-box.

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Apr 18, 2017

You sound like the kind of guy that wears an engagement ring.

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Apr 17, 2017

I saw my post on the front page, and I thought "why the hell would this make front page?"

This is why it made front page. SB for you, sir

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Apr 17, 2017
C.R.E. Shervin:

re-read what I wrote.

Also, are you investing with your GF? Dude, terrible idea.

This.

That's the dumbest thing you could do.

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Apr 15, 2017

Having lived in NYC for quite some time, I've learned to never underestimate the amount of global old money that exists here. A lot of ppl are getting bank rolled by some Russian oligarch, Chinese party leader or some European royalty in the city and wouldn't bat an eye putting their kids in a absurdly expensive apt to us plebs who actually need to work. I knew a chick whose parents put her in a 2BR luxury high rise in midtown where the other BR was her studio (she went to some worthless school like Parsons of course).

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Apr 17, 2017

Noticed this too actually -- even old money in the U.S.

I guess if your family has a personal balance sheet that would rival some of the boutiques then whats a few extra hundred thousand a year in rent for them to "explore the world" and take a bunch of useless instagram photos...

Apr 16, 2017

Well, put yourself in another's shoes. If you want to live in an upscale area, can't afford $8k/month for a 2BR in the same building, it has a good commute and if you work long hours it makes sense.

If you're getting out of work after 8-9pm consistently, the last thing you want is a commute over 30min. You're realistically going to make breakfast and at most cook 1-3 times per week. So then what do you really need? Not an extra bedroom, not a full size kitchen, not a car and not a guest bathroom. You could get an ok studio for less, but at a certain point...you're working your ass off to come home to a "meh" studio apartment? Do you want to bring a woman back to a run down studio or an upscale one?

It's not at all the most cost effective choice, but depending on the person it's an understandable lifestyle choice.

Apr 16, 2017

I understand where you're coming from, but there are certainly more affordable options within commuting distance. If you want cheapish accommodations in a nice building, move to LIC to commute to midtown and Jersey for downtown. It's cheaper further out on the whole, but there's a range of prices within proximity to midtown and downtown.

Apr 16, 2017

Everyone has their own utility function.

Apr 16, 2017
TNA:

Everyone has their own utility function.

Guess a lot of landlords would love to charge you 3.5k/mo or 42k a year sitting on a couch.

Apr 16, 2017

I understand how $3500 would seem like a lot for an analyst (it's more than half your take home pay check each month.

But the difference between $3500 and $2500 is $12k per year. At the associate level, $3500 becomes a lot more reasonable (as you'll be making multiples of that $12k more.)

Apr 17, 2017

It all comes down to 4 things

Size of apartment (studio vs. 1 br)
Location of apartment (Gramercy vs. Hell's Kitchen)
View from apartment (Overlooking BK bridge vs. looking at a brick wall)
Amenities (doorman, gym, etc)

Location has the most to do with difference in prices so it is really hard to ever compare apartments in two separate neighborhoods.

Apr 17, 2017
BatemanBatemanBateman:

It all comes down to 4 things

Size of apartment (studio vs. 1 br)Location of apartment (Gramercy vs. Hell's Kitchen)View from apartment (Overlooking BK bridge vs. looking at a brick wall)Amenities (doorman, gym, etc)

Location has the most to do with difference in prices so it is really hard to ever compare apartments in two separate neighborhoods.

This list is a good start but there are other things...

-- Proximity. Separate from neighborhood, what is the apartment directly next to or near - a noisy pub or a scenic park? Is the subway close by or a 15 minute walk? Is it in a residential area on a side street or sandwiched between office buildings on a four lane avenue? Are basic places like a grocery store and convenience store near by?

-- Building Quality. Lots of buildings tout themselves as being pre-war as if it's some sort of nostalgic benefit - it's not. Neither is an unusable fireplace. An apartment in a 100 year old building can have all kinds of structural problems if there hasn't been proper maintenance by the landlord, not to mention attracting mice and other friendly wildlife. Gut renovation can rectify some of this and comes at a premium.

-- Apartment Goodies. These are like amenities but for your apartment instead of the whole building. Brand new stainless steel appliances or a stove that barely turns on? Video intercom? Heating/cooling through central air or through a unit that looks like it belongs in a museum? Etc.

I'm sure there are other things still but that's what comes to mind

As far as Tudor City goes, on the surface it seems like a great deal, but look closely. The apartments are considerably smaller than average (some refer to them as "micro-studios"), lots of times basic things are missing (like a proper stove for instance), the building is pre-war ie almost 90 years old, and the location is way out east and relatively far from the subway

I've been in nyc for a little while now, and if there's one thing I've learned about real estate that always seems to hold true no matter how hard I try to disprove it, it's that you always end up getting what you pay for...

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Apr 17, 2017

spot on, especially the structural issues inherent in a 100 year old building. I've been in one where an engineer ran a screwdriver through a joist like a hot knife through butter. Also the electricity is rarely up to code, often using the original electrical panels and wiring. Heaven forbid you remove a stove and you notice a corroded gas pipe. How far up does the corrosion go and it is not at all insulated like the newer(after 1960s) apartments, hence the oxidation that corrodes the pipes.

Apr 17, 2017

Question for anyone: Why are Gramercy prices so low comparatively?

Apr 18, 2017

Depending on how you define Gramercy, the prices are not low at all there. I define Gramercy as b/w Park and 3rd and b/w 14th and 23rd. Brokers like to pitch apts north of 23rd as "Gramercy" but it's really Murray Hill in my mind and thus cheaper.

Apr 17, 2017

This is a question of whether you want to pay for the premium features offered by the building/studio. Judging from the way you asked this, you probably don't care much about those things and would rather save up on the $1.5k.

Apr 17, 2017

There's some really nice studios in NYC. My building has some where the studio has a private balcony with river views that's as big as the studio itself.

Recognize that a lot of the 1-2 BR options are priced with desperate college grads in mind, which results in a sometimes counterintuitively lower price. The studios are geared more towards people who want to live alone, and I think landlords understand that those people are willing to pay a premium.

Apr 17, 2017

Soon you'll be able to live in one of the 5th avenue store fronts. they seem to be going out of business in batches. Retail is dying a quick death

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Apr 18, 2017

You guy's need another financial meltdown, one that will hit twice as hard than 2008.

You killed the Greece spread goes up, spread goes down, from Wall Street they all play like a freak, Goldman Sachs 'o beat.

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Apr 18, 2017

You guys care way too much about having a "doorman".

Also as a first / second year you should not be renting your own place - share a 2 or 3 bed with some other people.

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Apr 18, 2017

I think "doorman" in this context also implies that the building has an elevator and isn't a walk-up. I dunno though, I've heard stories of people breaking into walk-up buildings during the day - just randomly buzzing all the apartments until they get let in. My friend happened to be home one day sick when someone was breaking into his apartment.

I'll tell you another thing doormen are great for - receiving packages.

Apr 18, 2017

I didn't realise there were residential developments without lifts nowadays!

Re theft, I've never lived in a building which didn't have a key fob entry system to the main area and then another door key for the flat itself. Sure there's a balcony but once you're above the 2nd floor, nobody is climbing up there.

Agree that having a concierge / porter / doorman is incredibly handy for deliveries, but in the context of managing your finances as a 1st/2nd year analyst you can probably live with having things delivered to the office and save yourself a vast sum of money in rent.

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Apr 18, 2017

Most pre-war stock is not legally required to have an elevator if it is under 6 stories.

My (then) girlfriends apt and others were broken into on 2nd ave and 90th st. There was no doorman, it was during the day.

Apr 18, 2017

Most walk-ups are just a buzzer, otherwise how do you let guests up/deliveries up?

Apr 18, 2017
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Apr 18, 2017