Lady Buys Her First NYC Apartment

One of the things people who aren’t from New York ask me sometimes is whether or not the rent in New York is really as crazy as they think it is. “Is it really that expensive to live there?”

Instead of asking me, all they’d have to do is read The New York Times’s Real Estate section every weekend, and have a good laugh, like I do.

This week includes a tale about 34-year-old Claudia Beqaj, a marketer for a medical device company, who paid $1,400 a month to illegally sublet a studio owned by NYU in Washington Square Village:

As her salary rose, her taxes did, too. She had few tax deductions. Her accountant told her he was struggling to find something she could write off, she said.

The news that she might have to vacate her rental was the incentive she needed to hunt for a place to buy. Her price range was around $400,000. She had socked away $40,000, or 10 percent of that amount, in a savings account. It would go toward her down payment.

Okay, a few things here.

The first is that this young woman was earning so much money, it benefited her tax-wise to buy a home. The second is that you’d think that $40,000 is a lot of money for one person to save up by the time she or he is 34 and ready to buy, get this, a studio, or one-bedroom apartment. We’re not even talking about a single-family home! We’re talking about an apartment that can essentially fit a bed and a few other belongings.

But apparently, it is not a lot of money—not in New York City. When Beqaj expressed interest in a $400,000 studio apartment in Greenwich Village, she was told she needed $80,000 for a 20 percent down payment, plus “two years of mortgage and maintenance payments in reserve.” Which means she’d need at least $100,000 in the bank to even be considered for the apartment.

She then says this: “I was never really a saver. I love shopping and going out. I realized how naïve I had been about the whole financial situation of renting versus buying. I was completely deflated.”

It’s just so interesting to me that a 34-year-old woman who has $40,000 saved up thinks she’s not really a saver, and that someone who has $40,000 saved up to buy a place in New York City can be so easily deflated. The real estate market here really is that wild. Folks, if you are saving money, you are a saver. We all go at our own pace, but the fact that you sock any money away at all is a good thing.

I’ll let you read the rest of the story, but Beqaj does end up buying a place. As a result, Beqaj’s accountant says that she’ll “save around $1,000 a month in taxes.”

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16 Comments / Post A Comment

madrassoup (#929)

Yeah, reading that article made me a.) hate myself and b.) hate this city and its paper of record. That said, the Times does have a useful calculator to help you figure out if buying really is right for you. I think it helps to temper that feeling I sometimes get that I have failed as an adult for not owning an apartment here.

kaitlinmlk (#1,208)

I am so glad someone shares my secret love of laughing at people in the Real Estate Section in the NYTimes. Well 1/2 laughing, 1/2 “are you people insane?!?”

navigateher (#555)

Sometimes I think we should totally move to New York. It seems to be just as crazy expensive here (except that we get to pay 40% in taxes on top of that) but at least New York something happens. I just looked through apartments in my area and there are tiny 660 sq ft one-bedroom apartments in the market for around $770,000. And it’s not even a really expensive area. So it’s not just NY, it’s happening all over the world I guess.

That article made me frustrated though. It was like she was bragging at the same time (“hey look, I’m not even saving money and I have $40,000 in the bank!”) while wanting us to feel bad for her with the “can you believe it? I wasnt’ able to buy the apartment? ME? HOW CAN THIS HAPPEN?”.

@navigateher What country is this?

navigateher (#555)

@stuffisthings Sorry, I was apparently ranting so much I forgot to mention. Finland.

peacheater (#733)

@navigateher I’d totally trade you for the kind of social safety net you guys have over there.

navigateher (#555)

@peacheater Also true. I’m always happy to pay those taxes (at least for a while) when I read a report (e.g. the ones we’ve seen on The Billfold) about the US health care system. The social security system here is pretty good (which has its own problems). Still, living here in the capital region is so expensive it hurts sometimes.

I love the rent/buy tool on NYTimes.com, essentially, I will never be saving money by owning. Ever. But I still want to! Conundrum.

Thank you, New Yorkers, for being around to make D.C. and Paris real estate seem sane.

@stuffisthings
It’s actually not that insane. Granted I live in NYC, the thing is that prices are high yes, but when I do the math, my mortgage payment still would not be astronomically higher than my rent and I’d have three times as much space.

mishaps (#65)

I am calling shenanigans on the “two years of mortgage and maintenance payments in reserve.” Maybe to buy an apartment in the East Village, but I was not told that at all when I was apartment-hunting in Brooklyn, nor have I heard of that requirement from other home-owning friends.

thematt (#1,017)

@mishaps Me neither in my Brooklyn condo, but this sort of thing (and more) is common in Manhattan co-ops. And is part of why Manhattan never had a housing crash: people who buy in NY can usually afford to, because their co-op makes sure of it.

Megano! (#124)

Wait, so your property taxes aren’t included in the rent?

I can’t even imagine renting a place I don’t share with other people, let alone buying a place. I can’t fathom saving $40,000. I listened to my midwestern mother for years tell me, “you should buy! first-time tax credits!” and unsuccessfully tell her that the down payment– in the price range of the woman above–would be more than my salary.

(I occasionally meet people who own their apartments. Nice apartments. Sometimes seriously nice apartments. It absolutely flummoxes me. How the hell did they do it? I mean, not all of these people are bankers. Family money? Money from the sky? Where did I go wrong?)

So, those rich tech dudes from the style section last week? Any of you? Call me?

skeptic (#1,231)

Not to in any way diminish this woman’s efforts, but saving $40k by the time one is 34 does not make you ‘saver.’ That’s a little over $3k per year after college, which is commendable compared to the American average but hardly anything to get excited about.

WaityKatie (#1,696)

@skeptic I think it’s pretty impressive if you had to finance your own education via student loans, and you have been living in NYC for a while. I’d get excited about it!

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