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Much nicer than the dorm, and it could prove a better investment in the long run. (333 East 14th Street, #16B - Compass) Much nicer than the dorm, and it could prove a better investment in the long run. (333 East 14th Street, #16B - Compass)
With New York City rents reaching all-time highs (in Manhattan, average monthly rents are now more than $5,000), few college students are in the position to rent without the help of a well-heeled parent or guardian. But is it in the best interest of parents and guardians to rent rather than buy in the current market?

Renting vs. Buying

To determine whether it is better to rent or buy for a college-age child, it is important to consider several factors, some of which are unique to New York City’s housing market.

Monthly Overhead

The first and most important factor is to consider your monthly overhead. With rents at all-time highs, owning may result in lower monthly housing costs, but it all depends on the specific situation. For example, in New York City, it is not unusual for one’s building fees (i.e., condo fees and taxes or coop fees) to be as high or higher than one’s monthly mortgage payment. As a result, the first step is to consider whether your monthly overhead (mortgage and fees) will be higher, lower, or about the same if you opt to buy versus rent. That said, even if your monthly overhead is somewhat higher, buying may be a wiser long-term investment.


If you don’t require financing, in the current market, your monthly overhead will likely be lower if you buy rather than rent unless the building has exceptionally high fees. Given the rapid appreciation of properties in recent years, buying is also likely to pay back. According to this calculator, the average $800,000 property purchased in the New York City area appreciated 25.5 percent between Q4 2019 and Q1 2022.

However, if you require financing, renting still may be a better option. With fixed-term mortgage rates now well over 5 percent, you may or may not end up with lower monthly overhead. In addition, securing financing on a second property is likely to pose additional challenges, including challenges many out-of-state residents are unlikely to anticipate.
First, you’ll need to prove creditworthy to purchase a second home. Second, be prepared to bring more money than average to any deal. As a rule, most York City coops expect buyers to put 20-30 percent down. However, since coops are free to make up their own rules, don’t assume you’ll be treated like any other buyer. If you’re purchasing a unit for a college-age child, you may be asked to bring more money to the deal.

On a related note, don’t assume that you’ll be able to tap into your existing home equity to come up with a down payment. While it is common to use one’s existing home equity to purchase a second home (e.g., a cottage or ski chalet), in New York City, getting approval from a lender is just the first step. This is especially the case if you’re attempting to buy a coop; your financials will be carefully scrutinized by the board. If they don’t like what they see (e.g., you’ve tapped into the equity on your existing home for a down payment), your application may be rejected.
Real estate agent and client Some things to keep in mind before you receive the keys (Pixabay)

Closing Cost

Another consideration is the high cost of closing on a condo or coop in New York City. As a rule of thumb, closing costs tend to run anywhere from $8,000 to $10,000, but they can be much higher. Factors that impact closing costs include the type of unit (e.g., if you’re purchasing a condo, you’ll need to pay both city and state mortgage recording taxes, which are taxes only levied in a handful of other U.S. states and no other U.S. cities). However, even some coop units come with higher closing costs (e.g., if you’re purchasing a sponsor unit, you’ll also be slapped with city and state transfer taxes). Luxury units (e.g., those priced over $1 million) also come with additional taxes that are typically passed along to the buyer.

Length of Ownership

A final consideration, which is especially important when buying for a college-age child, is the length of ownership. In the past, renting was generally considered better than buying if you were planning to be in New York City for less than ten years. Given the rapid appreciation of homes in recent years, however, this may no longer hold.

Potential Obstacles When Buying for College-Age Children in New York City

If you’ve considered all the above factors and decided that buying does make sense, there is still one more obstacle you’ll need to overcome—finding a condo or coop willing to let your college-age child move in. In most condos and nearly all coops, you’ll need to convince the board that your college-age child will make a good tenant, and this may be easier said than done.

Stopping short of outright discrimination (e.g., rejecting a tenant based on their race, gender, or sexuality), coop boards are free to pick and choose their tenants. The best way to avoid problems at the application stage is to read all listings carefully. Look for language that clearly states the board permits “parents buying for adult children.” Any experienced real estate agent will also be able to direct you to buildings with boards known to welcome parents purchasing for adult children and, more importantly, steer you away from buildings where the practice is strictly forbidden.

Starter Homes that Permit Parents Buying
25-Tudor-City-Place-01 Tudor Tower, #1205 (Compass)
From the Listing: This stunning one bedroom home, drenched in light that floods from oversized western facing windows, offers open views of Midtown and Tudor City Park. The open concept kitchen is complete with granite countertops and plenty of storage and the electric fireplace in the living room creates a charming ambiance. Outfitted with a gorgeous sliding barn door, the spacious bedroom boasts two exposures, an oversized closet, and an en-suite bathroom featuring a glass door shower, mounted vanity, and recessed lighting. Tudor Tower has generous co-op rules allowing pied-a-terres, parents buying for children, gifting, guarantors, corporate ownership, co-purchases, and subletting allowed after one year of residency for 5 out of 10 years See floor plan and full details here.

110-West-71st-Street-01 110 West 71st Street, #3A (Elegran)
Upper West Side co-ops
From the Listing: This beautifully renovated one-bedroom + home office gem is perched on the third floor of a quaint brownstone, one block away from Central Park. Sun-drenched and filled with the charm of a decorative brick fireplace and large windows, the open layout offers a cozy and functional respite from the city. The den allows the perfect amount of space for a generous walk-in closet, home office, or separate dining room and is currently fitted with custom closet build-outs. To top it all off, a perfectly-laid out open kitchen features a large white quartz island, stainless-steel refrigerator, dishwasher, microwave, gas range, and oven - making this the perfect space to cook and entertain. Parents buying for children allowed with board approval. See floor plan and full details here.

137-East-36th-Street-01 Carlton Regency South, #13C (Sotheby's International Realty)
From the Listing: Bring your architect to create your dream home with eastern skyline and river views from oversized wall-to-wall windows! The home is currently configured as an expansive one-bedroom with separate living and dining areas. The corner bedroom features east and north exposures and plenty of room for your king-sized suite of furniture. The dining area can be easily converted into a second bedroom or office if needed. Pied-a-terre, gifting, co-purchasing, and parents buying for children are permitted with board approval. See floor plan and full details here.

445-West-19th-Street-01 The Chatham in Chelsea, #5E (NestApple)
From the Listing: This bright apartment has a renovated kitchen and hardwood floors. Facing south in a quiet street with big windows on the fifth floor, an open kitchen with stainless steel appliances, generous closet space, and storage. 445 West 19th Street is a well-maintained elevator building with a beautifully landscaped roof deck, outdoor bike storage, laundry room, video security, and a live-in super. See floor plan and full details here.

10-Quincy-Street-01 Salvation Lofts, #4F (The Corcoran Group)
From the Listing: Apartment 4F is a magnificent and spacious one-bedroom with unique architectural windows. Two large closets offer endless space, and a kitchen that provides maximum functionality. The understated and luxurious bathroom offers spa-like amenities and blends seamlessly into the authentic backdrop through the use of natural and organic stone floor and wall tiles, blackened steel hardware, and custom walnut vanities. See floor plan and full details here.

520-West-23rd-Street-01 The Marais, #14E (Compass)
From the Listing: This high floor, large one-bedroom home is a true gem in the sky with beautiful views of the High Line, Empire State Building and Hudson Yards. As you enter this mint condition property you are greeted by the beautiful custom, walnut stained hardwood floors throughout, 9-foot ceilings and oversized double paned windows, which open to expansive views, flooding the space with natural light. The generous & well designed layout features a spacious living and dining area that is perfect for entertaining or quiet nights in. The separate windowed kitchen is a sunny and pleasant place to prepare any meal, or simply pour a cup of coffee. Unlimited subletting, pied-a-terre, co-purchasing, and parents buying for children allowed. See floor plan and full details here.

415-Main-Street-01 Riverwalk Court, #5D (Core Group NYC)
From the Listing: This extra-large, corner one-bedroom, one-and-a-half-bath residence spans 885 square feet. The unit’s southwestern exposure beautifully captures the Manhattan skyline. Additional features include floor-to-ceiling windows, an in-unit washer/dryer, and a large walk-in closet with three additional closets. The chef’s kitchen is outfitted in stainless steel appliances and granite countertops and opens up to the extra-large living room that offers enough space for multiple sitting areas including a separate dining area. The bedroom is large enough for a king-size bed and both the en-suite and half-bath feature marble throughout. See floor plan and full details here.

333-East-14th-Street-01 333 East 14th Street, #16B (Compass)
From the Listing: Located in a prime East Village/Gramercy neighborhood, this 1-bedroom, 1-bath co-op has amazing, sweeping views. A separate dining area, enormous closets and long hallway between the bedroom and living room make this space even better. This home has been totally renovated and requires no work! The kitchen, bath, floors, doors, closets, fixtures and lighting have all been lovingly brought up to date with a sleek elegant look. Co-purchasing, parents buying for children, guarantors and gifting allowed on a case by case basis. See floor plan and full details here.

45-East-25th-Street-01 The Stanford, #17A (The Corcoran Group)
From the Listing: This bright and spacious one-bedroom / one-bathroom home boasts directand unobstructed treetop views of Madison Square Park from every room. Enjoy beautiful park and western skyline views with incredible sunsets from your private balcony, the perfect place to start and end your day. The renovated kitchen comes equipped with stainless steel appliances, including a dishwasher, custom cabinetry, and granite countertops with a pass-through breakfast bar. This home has new hardwood floors and a windowed marble bathroom with a deep soaking tub. See floor plan and full details here.

45-West-10th-Street-01 The Peter Warren Cooperative, #6D (Brown Harris Stevens)
From the Listing: This large one bedroom, one bath offers a winning combination of a generous floorplan and one of the city’s most desirable locations, a beautiful tree-lined block just off Fifth Avenue’s Gold Coast. South-facing and clearing the historic townhouses across the street, the large windows in all rooms offer views downtown and bathe the apartment in light throughout the day. The living room is large enough for seating and dining areas with room to spare. A dining alcove has been partially closed and outfitted with sliding doors to create a home office. Pied-a-terre, co-purchasing, parents buying for children, and subletting is permitted. See floor plan and full details here.

101-West-24th-Street-01 Chelsea Stratus, #6A (Elegran)
From the Listing: Priced to sell, this barely lived in one bedroom has towering 11-foot ceilings and will not last! This oversized layout is spacious and inviting with a central open-plan kitchen and plenty of room for a formal dining area. Floor-to-ceiling windows draw in natural light and perfectly frame the open northern exposure overlooking the zen garden. Any avid cook will adore the GE Monogram refrigerator, Viking cooktop, oven and microwave plus there’s also DCS by Fisher & Paykel double-drawer dishwashers, Macassar Ebony wood cabinetry and sweeping countertops. Beautiful wood floors throughout, abundance of closet space, central AC and in-unit washer/dryer make this for an ideal home experience. Includes deeded storage unit. See floor plan and full details here.

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Contributing Writer Cait Etherington Cait Etherington has over twenty years of experience working as a journalist and communications consultant. Her articles and reviews have been published in newspapers and magazines across the United States and internationally. An experienced financial writer, Cait is committed to exposing the human side of stories about contemporary business, banking and workplace relations. She also enjoys writing about trends, lifestyles and real estate in New York City where she lives with her family in a cozy apartment on the twentieth floor of a Manhattan high rise.