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Sat 19 Nov, 2022 07:37 pm
I wish to know whether I should buy or rent an apartment. I will consider a one-bedroom, one-bath in a specified neighborhood.
I plot on a chart the price to buy such an apartment divided by the monthly charge to rent such an apartment (e.g., today, the apartment sells for $1 million [as a co-op or condo] and rents for $1 thousand [as an apartment rental], so it is shown as 1,000 on the chart [$1 million/1,000].
I also plot additional points on the chart for dates in the past.
Now I can see when purchasing an apartment was/is expensive compared to buying it.
Is this a good way to decide when to rent an apartment and when to buy it (i.e., rent when the ratio is relatively high; buy when it is low)?
Alternatively, if I own an apartment, to decide whether to rent it to a lessee or sell it to a purchaser?
@gollum,
This is just a personal opinion, but I would never 'buy' a part of someone else's building. I know that many others do.
@gollum,
Until and unless you figure out a way to help you decide Rent/Own you'll be stuck. I hope someone on this forum has the brains to give you good advice on the issue.
@gollum,
gollum wrote:
Alternatively, if I own an apartment, to decide whether to rent it to a lessee or sell it to a purchaser?
No one here can answer this particular question. You are going to have to ask whatever managing entity manages the condo or coop building on whether they even allow subletting or not. Or if they have restrictions on how the reselling process is going to happen. Too many variables that can't be answered here by a2kers (like so many of your other legal adjacent questions involving real estate).
@gollum,
I think a better comparison would be to plot the payment you would make on the house compared to the rent you would pay. There are few reasons I recommend this, but the big one is it goes directly to cash flow. You've got to be able to make the payment each month. While rent is straightforward, property value doesn't really tell you anything about what your monthly payment is when you buy. For example, interest rates are 3x what they were 18 months ago, so that same property is now much more expensive on a monthly basis. Rent also has property taxes built in as well as some maintenance and insurance costs. You need to include those in when considering buying.
@gollum,
Owners looking forward to either a small home or rental that someone else can re-plumb (something that's happened to three family members in the last four years), re-wire, re-roof, re-etc, etc, etc.
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