Julio:
Ah, the evils of bourgeosification. I don't know whether the rest of
PEN-L will absolve you, but speaking as one Brooklyn homeowner to
another, I think what you are doing is, at least until the revolution,
very wise.
Joel Blau
Julio Huato wrote:
Max wrote:
Why not rent? Put your extra dough in TIPS. You're young.
Start saving now and you should be fine, unless Louis leads an
army of the dispossessed and burns down all the banks.
We simply can't afford to rent the amount of space we need at this
point in our family life.
In our co-op apartment we only had one (small) bedroom. When Erik
arrived 4 years ago, he took it over. So, we had to convert the
living area into our "bedroom." Now with my daughters signaling their
intention to join us, we'd have to sell our apartment and rent space
for at least $2,000. Yes, the NY Times says rents are falling in NYC,
but our new immigrant, working class Brooklyn neighborhood haven't
been reading those stories. In addition, consider that, if we don't
transfer the apartment sale proceeds into the purchase of another
primary residence, this lump of cash will bump us up to a higher tax
bracket for 2009. On the other hand, if we upgrade our "ownership,"
we can get a 4.9% rate on a hefty mortgage. That means that, in some
areas of Brooklyn with sensible commuting times to work that (and here
I have to pause and thank racial bias and stupidity for keeping these
areas affordable to us), we are suddenly able to buy a substantial
house with at least a rental unit, if not two, with net monthly
"ownership" expenses below $1,500! Compare that to the $1,200 or so
we've been paying monthly at the co-op in the last few years -- that's
including mortgage, maintenance fee ("rent"), and ever more frequent
and enhanced "assessment fees." (Our co-op is self-managed, so we
have struggle to keep the finances under control. Until this year,
our co-op had remained debt free. Not any longer. We're now in the
process of shopping for a mortgage.)
By the way, in 1996, when my wife and I were both students, the same
rationale (inability to afford rent in an accessible neighborhood)
persuaded us to buy our co-op apartment. For years, our monthly cost
of "ownership" fell below $600/month. And, at the time, we were
paying $750/month rent in Astoria, Queens. In the last few years,
cost of "ownership" increased rapidly due mostly to building repairs.
With good advice, first-time buyers can tap into a bunch of perks. If
not a first-time buyer, then you have to -- of course -- keep a
squeaky clean credit history to get a good rate.
Such is the fascinating economics of real estate here.
Anyway, if things work out, Max, we'll be happy to entertain you (and
any other PEN-L member for that matter) in our new palatial abode in
the near future.
On the downside, you're right, there's the increasing likelihood of a
proletarian revolution led by Louis (and Michael Perelman?), in which
case we are bound to face an execution squad for holding assets near
the $1 million nominal mark. The fact that it doesn't feel like we
own anything real tells you how illusory financial wealth is.
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