House rental or purchase -- stumped but asking early

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TomatoTomahto
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House rental or purchase -- stumped but asking early

Post by TomatoTomahto » Sat Sep 05, 2015 9:54 pm

I would like some advice about our housing. Before I start, let me say it's a HCOL area and the numbers here might seem crazy to many of you living in sane parts of the country. We are not going to do anything immediately but I want to draft a plan and look at the possibilities.

The situation: our youngest will be going away to college next year. My wife works in midtown Manhattan, much more convenient from Grand Central than Penn Station (which our current mass transit options favor); DW would like a commute of under an hour.

We have pets, mostly indoor pets but including a rescue pit mix that we like to have within an invisible fence. We don't want to move into the city and we enjoy quiet surroundings with little street noise (suburban cul de sac). We don't need to be on the water, but very much like a view of water (doesn't have to be a large body of water) and my wife likes a pool. We have neither of those today. The quality of the school district is not directly important.

Our current plan is that DW will work at her job for another 5 or 6 years and retire. I don't imagine that our retirement will be in NJ, NY, or CT. I am reluctant to sell our home in NJ and buy one for 5 years in NY or CT. I don't think renting is crazy, but DW can't picture it.

Zilliow estimates our house at $2.2M. Let's say we net $2M. We have no mortgage.

We pay around $3.5k per month in property tax currently. With some return on the $2M, rent between $8k - $15k per month seems reasonable, although the larger number sounds extravagant. We can afford it.

Two additional requirements:
1. We would have to be allowed to install an electric fence for the dog, but those are below ground and shouldn't be objectionable to the owner.
2. We would also want to install a Tesla charging outlet (outdoor or garage 240V 40A outlet). We'd obviously pay for the installation, but the house would need some spare electrical capacity.
Are these unreasonable?

Some concerns:
1. What if she works there for longer? Shorter?
2. Many of the houses seem to be the inverse of what we want, a moderate sized home on a generous (by local standards) piece of land, say 2 acres plus.
3. I haven't lived in a rental for decades. The thought of someone else being responsible for the maintenance appeals to me, but we lose a fair bit of autonomy.
4. Are pets going to be a deal-breaker, or can a sufficient deposit be negotiated to calm the owner?

If anyone is familiar with the area, I'm open to suggestions as to towns to consider. Rye, NY?

Am I being goofy? Should I just go with the flow, sell my house, buy another house, and quit trying to stuff a round peg in a square hole?

Zott
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Re: House rental or purchase -- stumped but asking early

Post by Zott » Sat Sep 05, 2015 10:33 pm

Consider Greenwich, CT and North Stamford as well. The commute to midtown via Metro-North will be somewhat more than an hour though. But both areas will have properties such as you describe. I'm not familiar with the rental market, but there's plenty of homes for sale and I suspect there are a good variety of rentals as well.

ResearchMed
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Re: House rental or purchase -- stumped but asking early

Post by ResearchMed » Sun Sep 06, 2015 7:51 am

TomatoTomahto wrote:I would like some advice about our housing. Before I start, let me say it's a HCOL area and the numbers here might seem crazy to many of you living in sane parts of the country. We are not going to do anything immediately but I want to draft a plan and look at the possibilities.

The situation: our youngest will be going away to college next year. My wife works in midtown Manhattan, much more convenient from Grand Central than Penn Station (which our current mass transit options favor); DW would like a commute of under an hour.

We have pets, mostly indoor pets but including a rescue pit mix that we like to have within an invisible fence. We don't want to move into the city and we enjoy quiet surroundings with little street noise (suburban cul de sac). We don't need to be on the water, but very much like a view of water (doesn't have to be a large body of water) and my wife likes a pool. We have neither of those today. The quality of the school district is not directly important.

Our current plan is that DW will work at her job for another 5 or 6 years and retire. I don't imagine that our retirement will be in NJ, NY, or CT. I am reluctant to sell our home in NJ and buy one for 5 years in NY or CT. I don't think renting is crazy, but DW can't picture it.

Zilliow estimates our house at $2.2M. Let's say we net $2M. We have no mortgage.

We pay around $3.5k per month in property tax currently. With some return on the $2M, rent between $8k - $15k per month seems reasonable, although the larger number sounds extravagant. We can afford it.

Two additional requirements:
1. We would have to be allowed to install an electric fence for the dog, but those are below ground and shouldn't be objectionable to the owner.
2. We would also want to install a Tesla charging outlet (outdoor or garage 240V 40A outlet). We'd obviously pay for the installation, but the house would need some spare electrical capacity.
Are these unreasonable?

Some concerns:
1. What if she works there for longer? Shorter?
2. Many of the houses seem to be the inverse of what we want, a moderate sized home on a generous (by local standards) piece of land, say 2 acres plus.
3. I haven't lived in a rental for decades. The thought of someone else being responsible for the maintenance appeals to me, but we lose a fair bit of autonomy.
4. Are pets going to be a deal-breaker, or can a sufficient deposit be negotiated to calm the owner?

If anyone is familiar with the area, I'm open to suggestions as to towns to consider. Rye, NY?

Am I being goofy? Should I just go with the flow, sell my house, buy another house, and quit trying to stuff a round peg in a square hole?
Just a few thoughts/questions for starters...

First of all, do you have a sense of what you DO want, if you could have your pick? Not "a moderate sized home on 2+ acres" is pretty general.
And approximately what size home and yard do you have now?
(Don't make a mistake and downsize too much, unless you *need* to, and from what it's sounded like in some of your past posts, that won't be truly necessary.)

Your youngest is heading of to college, so you are about to start on the "me/us stage of your lives".
Go back and read protagonist's piece on how it was "almost too late", and the replies to that.
And there are a few posts from about a year ago that make the same point.

IIRC, from something you wrote or hinted about, you've saved (or inherited or won the lottery, etc.) "enough" so that you can afford to be comfortable and happy, while still leaving a nice inheritance to your children and/or bequests to favored charities/etc.
Assuming you want to do one or both of the above, then the regular "you can't take it with you" doesn't apply quite the same as it does to those without those legacy desires.
However, I really get the sense that it isn't "either/or" for you, although obviously you aren't looking to squander most of it.

So a few more questions: Are there any towns/locations that you specifically have thought would have been "nice to live there"? (From visiting friends/colleagues or just driving through, or even seeing pictures?)
If not, then how about taking a few weekend drives through a few communities, including the nearby "downtown" area plus shopping areas (grocery, etc.).
And if so, then also take a drive through, thinking about how it would be to live there.
That's not really going to tell you much, but you might notice something that you do *not* like.

Which train lines go into Grand Central instead of Penn?
Would your wife prefer the extra commute time from Penn station if there was a shorter commute to get there, or vice versa?

As for renting and wanted to make some changes or have pets allowed, often (but not always) offering a *serious* security deposit will pave the way, enough to "undo whatever you did" entirely, should that be desired. Or something like the Tesla charging outlet could be seen as an improvement, for current owners or as a selling feature in the future.
You could end up with a great landlord/lady, or one from.......
And unless you sign a multi-year lease (which is sounds like you yourself might not want), you could be forced to move again, too soon.

Buying, on the other hand, avoids that. The downsides include the extra selling costs before relocation to wherever retirement heaven will be for you. Do you have a few thoughts about that? Are you really, really going to enjoy being away from all that has been familiar and enjoyable? Would you be moving to be closer to family?
That's just for future thinking, not really a factor, except for - are you *absolutely sure* you'd be moving again anyway?

Those are some practice questions :wink:

RM
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Re: House rental or purchase -- stumped but asking early

Post by TomatoTomahto » Sun Sep 06, 2015 8:28 am

Zott wrote:Consider Greenwich, CT and North Stamford as well. The commute to midtown via Metro-North will be somewhat more than an hour though. But both areas will have properties such as you describe. I'm not familiar with the rental market, but there's plenty of homes for sale and I suspect there are a good variety of rentals as well.
Zott, both of those towns are very nice, but not having an improved commute affects their value to us.

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Re: House rental or purchase -- stumped but asking early

Post by TomatoTomahto » Sun Sep 06, 2015 9:06 am

ResearchMed wrote:Just a few thoughts/questions for starters...

First of all, do you have a sense of what you DO want, if you could have your pick? Not "a moderate sized home on 2+ acres" is pretty general.
And approximately what size home and yard do you have now?
(Don't make a mistake and downsize too much, unless you *need* to, and from what it's sounded like in some of your past posts, that won't be truly necessary.)
First, thank you for your thoughtful response. We currently have a 5BR/6BA 5000 SF renovated Tudor (originally built in the 1920s) on 2/3 of an acre. I'd love something similar with more land. I'm considering what to do as an empty nester, and fostering service dogs is something I'd like to do.

We are not intending to downsize in comfort terms, but we could probably be as happy with one or two fewer bedrooms and half as many bathrooms. I'd happily trade those for more land. I'd also like a better garage, as ours currently is just used as storage for trash cans and bicycles, although I know that it wasn't a priority item in older homes.

We don't like many of the charmless homes that seem to be in favor. We consider many of the McMansions more appealing to Tony Soprano than us. I could deal with it if renting, but I'd never buy many of the houses in our town.


Your youngest is heading of to college, so you are about to start on the "me/us stage of your lives".
Go back and read protagonist's piece on how it was "almost too late", and the replies to that.
And there are a few posts from about a year ago that make the same point.
Will do.

IIRC, from something you wrote or hinted about, you've saved (or inherited or won the lottery, etc.) "enough" so that you can afford to be comfortable and happy, while still leaving a nice inheritance to your children and/or bequests to favored charities/etc.
Assuming you want to do one or both of the above, then the regular "you can't take it with you" doesn't apply quite the same as it does to those without those legacy desires.
However, I really get the sense that it isn't "either/or" for you, although obviously you aren't looking to squander most of it.
I inherited $11k. Most of our financial comfort comes from DW's income, although I also contributed before becoming a SAHD. We don't want to squander, but I think we can spend some more on ourselves. We don't treat ourselves poorly, but I think we need more travel/vacation time, with and without the kids.

So a few more questions: Are there any towns/locations that you specifically have thought would have been "nice to live there"? (From visiting friends/colleagues or just driving through, or even seeing pictures?)
If not, then how about taking a few weekend drives through a few communities, including the nearby "downtown" area plus shopping areas (grocery, etc.).
And if so, then also take a drive through, thinking about how it would be to live there.
That's not really going to tell you much, but you might notice something that you do *not* like.
We need to take some drives up there.

Which train lines go into Grand Central instead of Penn?
I'm afraid it's Metro-North.
Would your wife prefer the extra commute time from Penn station if there was a shorter commute to get there, or vice versa?
Probably. We've considered renting in Hoboken or Jersey City (where she also has a satellite office, but we don't want our outdoor dog to have a sharply reduced quality of life). If we got an apartment in Jersey City, she could work out of JC 2-3 days/week, and have an improved commute into midtown.

As for renting and wanted to make some changes or have pets allowed, often (but not always) offering a *serious* security deposit will pave the way, enough to "undo whatever you did" entirely, should that be desired. Or something like the Tesla charging outlet could be seen as an improvement, for current owners or as a selling feature in the future.
You could end up with a great landlord/lady, or one from.......
And unless you sign a multi-year lease (which is sounds like you yourself might not want), you could be forced to move again, too soon.
I could sign a 2 year lease, but I'd be uncomfortable signing up for more than that.

Buying, on the other hand, avoids that. The downsides include the extra selling costs before relocation to wherever retirement heaven will be for you. Do you have a few thoughts about that? Are you really, really going to enjoy being away from all that has been familiar and enjoyable? Would you be moving to be closer to family?
That's just for future thinking, not really a factor, except for - are you *absolutely sure* you'd be moving again anyway?
I don't think that moving to be close to family works for us; our families are just too scattered. I think a convenient airport will be a factor in choosing where we live.
I have lived in our town for more than 30 years. I don't like the town as much as I once did.

It's funny that you ask how sure I am that we'll be moving away again. Everyone talks about how dying in NJ with its taxes is not something you want to do, but I'm starting to wonder if I'm letting the tax tail wag the lifestyle dog. I have to think on it more seriously, but for the most part, state estate and inheritance taxes are not so bad for one's children, and there's an element of feeling that what they get is gravy (having been put through college, etc.).

Our preferences are also different than they would have been pre-Internet and pre-Amazon. I'd love to have a cottage in Maine to go to for the summer and something further south for the winter. Or, we could stay in NJ/NY/CT and travel when we get tired of the winter snow or summer heat.


Those are some practice questions :wink:

RM

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Re: House rental or purchase -- stumped but asking early

Post by VictoriaF » Sun Sep 06, 2015 9:13 am

Baldly disregarding your "additional requirements," I recommend that you:
1. sell the Tesla
2. gift the dog
and
3. rent an apartment in Manhattan, in the building next to the one in which your wife works.

Your wife will lose her commute, you will have fun in the city while she is at work, and your children will be visiting you without any prompting.

Victoria
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Re: House rental or purchase -- stumped but asking early

Post by TomatoTomahto » Sun Sep 06, 2015 9:52 am

VictoriaF wrote:Baldly disregarding your "additional requirements," I recommend that you:
1. sell the Tesla
2. gift the dog
and
3. rent an apartment in Manhattan, in the building next to the one in which your wife works.

Your wife will lose her commute, you will have fun in the city while she is at work, and your children will be visiting you without any prompting.

Victoria
Victoria, we could still rent an apartment in the city, and have discussed those of our friends who did this when their nest emptied, but I don't think that gifting the dog is an option unless I thought that her quality of life would improve. I didn't want to adopt her and resisted mightily, having been a bigot about Pits, but I've come to really love her, and at 2 years of age, she is likely to be around a long time. I would gift her to any of our kids, who also love her, but they're not at a stage in their lives where they could take on the responsibility.

The Tesla, which I'm #6,xxx in line for, is as much to own a piece of the future as it is to drive it. There are garages in Manhattan, you know :D , and many of them now have chargers. There was recently an article (NYT?) about the growth in # of chargers in NYC.

Moving to Jersey City or Hoboken is more likely than Manhattan. I half-jokingly suggested to DW that maybe we should just hire a driver for her. When I think about it, it's probably cost-effective. I wonder if she'd dislike the commute time if she could be sleeping/reading/working. She can read on the train, but it's not the same.

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Re: House rental or purchase -- stumped but asking early

Post by denovo » Tue Sep 08, 2015 2:51 am

Our current plan is that DW will work at her job for another 5 or 6 years and retire. I don't imagine that our retirement will be in NJ, NY, or CT. I am reluctant to sell our home in NJ and buy one for 5 years in NY or CT. I don't think renting is crazy, but DW can't picture it.
5 years is right at that borderline where you you probably don't want to purchase. However, if you are sure that you want to stay in the area for 5 years, I think you should consider a long-term lease (2-5 years). You can perhaps get a discount, landlords less resistant to a pet, and perhaps willing to make some improvements or share the cost of it if needed for Tesla/dog.
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Re: House rental or purchase -- stumped but asking early

Post by TomatoTomahto » Tue Sep 08, 2015 6:15 am

denovo wrote:
Our current plan is that DW will work at her job for another 5 or 6 years and retire. I don't imagine that our retirement will be in NJ, NY, or CT. I am reluctant to sell our home in NJ and buy one for 5 years in NY or CT. I don't think renting is crazy, but DW can't picture it.
5 years is right at that borderline where you you probably don't want to purchase. However, if you are sure that you want to stay in the area for 5 years, I think you should consider a long-term lease (2-5 years). You can perhaps get a discount, landlords less resistant to a pet, and perhaps willing to make some improvements or share the cost of it if needed for Tesla/dog.
Thanks, denovo. The uncertainty about duration is the big issue, and it might be why we wind up doing nothing, grumbling all the while. Not that I treat my wife like a child, but I think some diversions might take the focus off the commute. Having a beach house rental for the summer to look forward to might get her mind off the cold winter commute, for example (what to do about the pets?).

You have identified something we need to get clarity on: how long?

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Re: House rental or purchase -- stumped but asking early

Post by ResearchMed » Tue Sep 08, 2015 6:58 am

Hi,

I don't want to get this derailed from the pouncing sure to follow, but...

Discuss with her giving a car service a fair try (assuming you've checked the costs for a long-term contract; it may cost a bit more per trip for a week or month).

It might feel awkward (very awkward perhaps) at first, but the question is... is she much more refreshed at work and again at home?
Getting more done before she gets home, allowing her more time with you or reading favorite books (which can be done just fine in the car, too!).
Just not needing to fuss with - or waste time doing - the trip to the train and then from the train each day, twice a day.

She'd probably eventually find a preferred driver who could become a friendly face twice a day.

Or she could make phone calls and get a head start on work in the morning.

Or just nap :happy

We've started doing more things like this, saving the time and increasing the comfort. It makes a *real* difference.
But it felt odd at first, too extravagant.
But the decreased "wear and tear", physically and emotionally, plus the time saved [just saved, period, or because the time can be used for something other than driving or changing trains/buses/etc.] turned out to be significant, especially at this point in our lives.

Or give it a try just while you are decided whether/where to move.
(I didn't catch at first that you had lost some enchantment with where you live now, so moving has a second possible appeal.)

Or she might just hate it (?).

RM


TomatoTomahto wrote:
VictoriaF wrote:Baldly disregarding your "additional requirements," I recommend that you:
1. sell the Tesla
2. gift the dog
and
3. rent an apartment in Manhattan, in the building next to the one in which your wife works.

Your wife will lose her commute, you will have fun in the city while she is at work, and your children will be visiting you without any prompting.

Victoria
Victoria, we could still rent an apartment in the city, and have discussed those of our friends who did this when their nest emptied, but I don't think that gifting the dog is an option unless I thought that her quality of life would improve. I didn't want to adopt her and resisted mightily, having been a bigot about Pits, but I've come to really love her, and at 2 years of age, she is likely to be around a long time. I would gift her to any of our kids, who also love her, but they're not at a stage in their lives where they could take on the responsibility.

The Tesla, which I'm #6,xxx in line for, is as much to own a piece of the future as it is to drive it. There are garages in Manhattan, you know :D , and many of them now have chargers. There was recently an article (NYT?) about the growth in # of chargers in NYC.

Moving to Jersey City or Hoboken is more likely than Manhattan. I half-jokingly suggested to DW that maybe we should just hire a driver for her. When I think about it, it's probably cost-effective. I wonder if she'd dislike the commute time if she could be sleeping/reading/working. She can read on the train, but it's not the same.
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Re: House rental or purchase -- stumped but asking early

Post by dailybagel » Tue Sep 08, 2015 7:33 am

Thanks, denovo. The uncertainty about duration is the big issue, and it might be why we wind up doing nothing, grumbling all the while. Not that I treat my wife like a child, but I think some diversions might take the focus off the commute. Having a beach house rental for the summer to look forward to might get her mind off the cold winter commute, for example (what to do about the pets?).

You have identified something we need to get clarity on: how long?
JCresident here. What if you and your wife stayed in current house, and she began taking an uber or taxi from Penn Station to/from work every day? I know that's not convenient nor pleasant, but maybe it would make the situation tolerable until ready to retire?

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Re: House rental or purchase -- stumped but asking early

Post by TomatoTomahto » Tue Sep 08, 2015 7:41 am

ResearchMed,
The dissatisfaction with our current location might not be much improved by moving; any choice is going to be populated by NYC commuters to a great extent. Nothing wrong with them, we've both been them, but after 30+ years, it gets old.

DW tends to go in early, so the drive in wouldn't be a problem. The drive home might take longer than a train, but I guess she might not mind if she's otherwise occupied. I haven't checked the costs in detail, but assuming a discount off the "by the hour" rates for a driver (she'd probably use her car), it's doable.

As you say, doing these "extravagant" things might be called for. Upgrades to business class for personal travel, for example. I'll float the option by her. Hiding it from co-workers might be an issue :D

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Re: House rental or purchase -- stumped but asking early

Post by TomatoTomahto » Tue Sep 08, 2015 7:47 am

Dailybagel, that might be an option, but it just removes the last step. One of her complaints is that it's difficult to arrive at work except at 7:30 or 8:30. When she needs to be in at 7:00, she has to get up at an ungodly hour (as it is, for 7:30 arrival, she gets up at 5:45).

How do you like living in JC?

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Re: House rental or purchase -- stumped but asking early

Post by denovo » Tue Sep 08, 2015 10:39 am

If commuting is the issue, here's an idea that you may have not considered (perhaps too costly?) Have you considered renting a small place in NYC that she could use on some weekdays which would limit her commute. I guess you would be apart on some days, but in theory, you could also be there a few days also if you have any neighbor, perhaps a retired couple or teenager, who could tend to your pets while you guys are gone a few days a week. There's a lot of personal preferences to be worked out, but I know many professionals in other locales sometimes have a place downtown.
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Re: House rental or purchase -- stumped but asking early

Post by TomatoTomahto » Tue Sep 08, 2015 11:21 am

Denovo, we have considered a place in town. DW lived in Manhattan and London for many years (close to 20) before I showed her how delightful the suburbs and minivans could be 8-) I wouldn't mind staying in the city as much as she would. She likes the sounds of birds chirping and dogs barking and we have very little urban noise (sirens, cars honking, etc.). Otoh, 3 days in a pied a terre might not be so bad, and we could house the kids if they get summer internships in the city. To be honest, during an intense work week, we really don't see that much of each other anyway, save for a few hours in the evening.

We would not mind hiring pet sitters. The lady who trained our pit mix takes in dogs, and they appear to live pretty well with her. The little dog could stay in town (she's 99% an indoor dog; at 5 pounds, an ambitious and grandiose hawk might take off with her). Cats don't require much attention.

It's a possibility, but I think an apartment in JC might make more sense -- she's hiring and already has some people in offices there.

As far as the expense, it all seems high until you compare it to swapping houses, on which we would lose a six digit figure.

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Re: House rental or purchase -- stumped but asking early

Post by mrBanker » Tue Sep 08, 2015 11:57 am

i am in a very similar situation. live in bergen country, commute to midtown. just to get closer to grand central, i wouldnt move. instead, as others suggested:

- get a pied-a-terre somewhere in midtown
- take an uber from penn to office
- get a driver

commuting at 7am helps a lot. i reach work at 7am everyday and there isnt much traffic or crowd. and if she can leave for home earlier, that helps as well.

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Re: House rental or purchase -- stumped but asking early

Post by Zott » Tue Sep 08, 2015 6:36 pm

TomatoTomahto wrote:Denovo, we have considered a place in town. DW lived in Manhattan and London for many years (close to 20) before I showed her how delightful the suburbs and minivans could be 8-) I wouldn't mind staying in the city as much as she would. She likes the sounds of birds chirping and dogs barking and we have very little urban noise (sirens, cars honking, etc.). Otoh, 3 days in a pied a terre might not be so bad, and we could house the kids if they get summer internships in the city. To be honest, during an intense work week, we really don't see that much of each other anyway, save for a few hours in the evening.

We would not mind hiring pet sitters. The lady who trained our pit mix takes in dogs, and they appear to live pretty well with her. The little dog could stay in town (she's 99% an indoor dog; at 5 pounds, an ambitious and grandiose hawk might take off with her). Cats don't require much attention.

It's a possibility, but I think an apartment in JC might make more sense -- she's hiring and already has some people in offices there.

As far as the expense, it all seems high until you compare it to swapping houses, on which we would lose a six digit figure.
If you consider the NYC apartment option, be sure to look at the tax impact. I understand that NYS/NYC are aggressive in this area and may consider you a "resident" for income tax purposes, even if the place is used part-time and you "live" elsewhere.

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Re: House rental or purchase -- stumped but asking early

Post by TomatoTomahto » Tue Sep 08, 2015 6:49 pm

Zott wrote:If you consider the NYC apartment option, be sure to look at the tax impact. I understand that NYS/NYC are aggressive in this area and may consider you a "resident" for income tax purposes, even if the place is used part-time and you "live" elsewhere.
We'd run it past our accountant, or maybe I will look at the numbers in TurboTax for last year. I do know that years ago, our accountant used to care about how many trips DW took out of the country, how many days were worked in a NJ office versus a NYC office,etc. but he said that NJ is now probably more expensive tax-wise than NY + NYC for high income earners.

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