Think you’re ready to quit the rental market and get on the property ladder? Here are ten signs to make sure.
Table of Contents
- You’ve got a good debt to income ratio
- You’ve evaluated and understood the New York City housing market
- You’re in love with a neighborhood (possibly your own)
- You know the NYC property tax code by heart
- You’ve been at your job for a while
- You hate your rental
- You know what you can afford – and you’re ok with that
- Your industry is stable
- You have the money for a down payment
- You constantly browse for property online
You’ve got a good debt to income ratio
This is how much money you pay in monthly debt divided by your gross monthly income. It’s a measure of how healthy you are financially and is usually the indicator banks use to decide how much (and at what rate) to lend you money. If your debt to income ratio is too high, you’re unlikely to get the loan you want. Better to wait and get your debt under control before you move to buy.
You’ve evaluated and understood the New York City housing market
There’s constant demand for apartments in NYC, but even within this market, there are peaks and troughs. If you know the occupancy rate, the average price per neighborhood, and the three-year market trend of the top of your head, it might be time to get off the fence and into an apartment of your own.
You’re in love with a neighborhood (possibly your own)
If you’re absolutely in love with the neighborhood and you spend all your time there, you might be ready to buy. Buying is a huge commitment both emotionally and financially so you need to be sure you love where you’re going to be living.
You know the NYC property tax code by heart
Taxes are a huge part of buying property and are usually the thing that will tip browsers to buyers. If you know the property code for condos, co-ops, and apartments and know the tax map like you know subway lines, you either need to go into tax law or purchase an apartment.
You’ve been at your job for a while
And you’re pretty sure it’s not going anywhere. If you’re looking at taking on the level of debt needed to buy an apartment, you should be relatively stable in your job and your industry to avoid a financial disaster down the line.
You hate your rental
Kitchens that don’t quite work, showers that don’t have any pressure, old paint – if these things about your rental niggle away at you, you might want to take a look at your finances and see if buying is in the cards. Sure, there will be problems with your new place – but when it’s your own, you’re in a much stronger position to fix them.
You know what you can afford – and you’re ok with that
Controlling expectations is the first step towards actual apartment ownership. There’s no sense in thinking that you want to buy an apartment, but only if you can buy a beautiful penthouse loft in Tribeca, that’s three times what you can afford. If you’ve taken a hard look at your finances and are ok with what the numbers are telling you, it’s a good sign to start seriously looking at property.
Your industry is stable
This is a hard one to evaluate since there’s always a risk of disruptive technology closing a whole industry. But in general, does your industry provide a service that is hard or impossible for someone/something else to do? Second, does your industry feel like it’s in a bubble? Are companies like yours vastly over-valued? If so, it might pay to hold off until you’re more stable position.
You have the money for a down payment
A down payment is usually 10-20% of the value of your loan. What’s more, a larger down payment will make your bid more competitive (especially relevant for co-ops). If you have or are planning on having that money available, then you might be ready to buy.
You constantly browse for property online
Do you constantly look for property online, ‘just to see what’s out there?’ Then yes, it’s time to make a move.
Buying property is a huge step – both financially and emotionally. But if most of these describe you, it might be time to get out of your rental and take the plunge.