My parents are always bugging me about renting an apartment in New York City, saying I am throwing money out the window by renting and that I should buy a place - But they don't seem to have a grasp of just how expensive real estate is in NYC. They keep telling me that I should take advantage of low interest rates, but I've got a three-digit bank account balance and a very modest salary. They've offered to help me with a down payment, but is it really a good idea?2005_03_askbuy.jpg

In most places in the U.S., it makes sense to buy a home rather than rent. But in the most expensive markets in the U.S. - which, of course, includes NYC - it's not necessarily so. According to a recent article in the Wall St. Journal, In the Hottest Markets, Renting Is the Real Bargain, "the relationship between the cost of renting and owning has broken down as low interest rates and an array of new mortgage products have helped turn many renters into homeowners. That has helped propel home prices upward -- and, in turn, has weakened the rental market, prompting landlords to cut rents or at least raise them less aggressively." According to the handy chart of major metroplitan areas that accompanied the article, in New York the monthly cost of renting is actually .71 of owning.

Your parents also need to realize that the AVERAGE price of an apartment for sale in Manhattan is currently one million dollars . That's just an apartment, not even an entire house or brownstone. Even if you're looking in the outer boroughs, housing prices are still high, especially in areas with an easy commute to Manhattan. Most apartments for sale in NYC are co-ops, the majority of which require at least a 20% down payment and have strict rules about how much of your down payment can be "gifted" to you, as well as strict guidelines about income. So even if your parents could give you all the money for a down payment, the co-op board would probably reject you.

But let's say you find a studio apartment in Brooklyn, it's a sponsor unit (no board approval is necessary), your parents give you the money for a down payment, and you're approved for a mortgage (most likely with your parents co-signing). Is it worth it in this case? Maybe. You'll get a tax deduction and you'll be building equity - but it will also depend on property taxes, maintence fees, insurance, and other factors. You could earn a profit when you sell, but you never know what's going to happen next in the housing market. Another thing to consider: Are you ready and willing to stay in one place for an extended period of time?

One last thought: We know there are plenty of people in NYC who rely on their parents for some or all of their housing costs. But we at Ask Gothamist like to advocate self-sufficiency, and we think you might want to hold off on buying a place if your wallet and heart aren't yet in the right place.

Need advice? E-mail ask(at)gothamist.com.