Rent or own your Loft?
In Manhattan’s dynamic real estate market, deciding whether to rent or own property is serious business. Renting and owning both provide very specific advantages and disadvantages over the short and long-term.
As you weigh your options you will have plenty to think about. Here’s a basic breakdown of the costs and benefits associated with renting and owning in Manhattan.
Tax deductions:
Rent: Usually none, unless you’re in a live-work situation.
Own: You may make standard home ownership deductions, including real estate taxes and interest on your mortgage.
Equity/Credit building:
Rent: No equity built. No impact on credit unless you default on payments.
Own: Significant equity is built, though it may rise and fall with market fluctuations. Positively impacts credit rating.
Liquidity/Flexibility:
Rent: Very flexible. You can get in and out much easier and faster, with fewer restrictions and a minimum of vetting.
Own: Much less liquid. The buying process may take months and involves securing loans, legal counsel and a lot of paperwork.
Maintenance Costs
Rent: None. The landlord is responsible for all upkeep.
Own: Plenty. You’ll be responsible for all maintenance costs.
Tax Costs:
Rent: Most leases include tax in rent. In many work-live and commercial leases, tenants are responsible for tax increases only.
Own: You are responsible for all tax costs.
Remodeling / Renovating / Decorating:
Rent: Most spaces are delivered with basic loft furnishings. It may not make sense to invest heavily in improvements since you don’t own the property. Also, significant changes to the apartment are subject to landlord approval.
Own: Within reason, you’ll be able to do whatever you please with your living space, which may be delivered to you with or without improvements.
Wait time to Move-in:
Rent: Often short, taking days or weeks if the property is in move-in condition. If construction is required, the process can take several months.
Own: Much longer on average. Locating property, securing loans, negotiating sale contract, etc. can take several months.
