Living on Long Island isn’t cheap. What’s the best way to stay? How will property taxes play into your decision to rent or buy your home?
NY is one of the most expensive places to live in the world. Even if you are out in Nassau County on Long Island. Still, for many there is no place like it. General cost of living is way up there, and property taxes add a lot to that burden. So, is it better to rent or buy a home or condo here?
Rents Are Rising
Despite all the complaints about lack of housing affordability, rents just seem to keep climbing. According to Zillow, the average rent in Nassau County is now over $3,000 per month. Many of those reading this might even think that sounds cheap. Still, it is well above the average for the entire state of New York, and around double the national average. That average is up almost $500 per month from just 2011.
Some may find that renting is an easier process than getting a mortgage and may require less money out of pocket upfront. The problem is that you are only promised that payment for maybe the next 2 months. You will always be at the whim of landlords and rising costs. Expect to pay more and more for the same unit each year. Worse, you are paying for someone else’s retirement and home. You never own it. If you can’t work or your retirement savings take a hit, you aren’t guaranteed a place to live next month.
Buying & Refinancing
According to Nerdwallet, mortgage interest rates are still near historic lows. Just around 4%, and you can lock in these terms for 15 or 30 years. That means purchase the average priced home in Nassau County at $528,700 with a 10% down payment would give you a monthly principal and interest payment of just over $2,300 per month. Much better than renting. Plus you get to own it. You’ll build equity you can cash in on later if you need it.
By owning, one day you’ll only have property tax and insurance payments. They may still not be cheap, but will probably be far less than continuing to rent.
According to Zillow if you plan to stay in your home, it is more profitable to buy than rent as long as you’ll be there for at least two and a half years.
Just be careful that you do account for rising property tax bills, insurance premiums and utility costs. So, it makes sense to buy less than you can really afford, so that you’ll have plenty of financial cushion for later and can sustain owning your own place.
Most importantly, make sure you are challenging your property tax assessments and annual bills so that you aren’t overpaying, and can achieve the most affordable payments.