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Maintaining a NYC lifestyle on $300K household income makes sense for a family with multiple kids attending public school(s). But owning a place in most desirab

Maintaining a NYC lifestyle on $300K household income makes sense for a family with multiple kids attending public school(s). But owning a place in most desirable locations (including Yorkville) seems to require that additional cushion that had to come from somewhere (extreme saving discipline, investments, inheritance, liquidity event, $1MM HH income, etc.).

steveBK123 4y ago
Yeah I mean, $300K HHI in a 2-3 BR coop in Manhattan with multiple kids is tight, right. People in that category are probably "house poor". Easily spending north of 50% of monthly income on housing, with most of their savings tied up in home equity. I had a friend like this who lived in a $2M condo and conceded the down payment came from family (even after flipping up other condos for a decade) and that he didn't really have a 6 month savings cushion. $300K in Manhattan..after-tax you're looking at $180K/year maybe, so $15k/mo. $3k alone on RE Tax, maintenance & insurance on a 2-3BR coop in Manhattan, forever, whether you have mortgage or not. $5k on mortgage probably, even if they've owned a while with a good entry price and high down payment.. probably $1M mortgage. So now you have 53% of your money immediately just to having a roof over your head. Hopefully you are saving 20% for retirement, your kids college, and a rainy day. Which brings you down to having $4k/mo for electricity, internet, phone, food, clothes, transport, holidays and basically everything for a family, in a place where everything costs a lot of money. Hopefully you don't do something dumb like own a car and spend another $1k/mo on loan/insurance/garage.
steveBK123 4y ago
I think people also underestimate the variance of experience of NYC public schools before overleveraging themselves like this. K-5 is basically zoned, provided there is space. So you can buy yourself into a good school, unless a lot of other people did first and you get shunted off to an adjacent not-so-great one. 6-12, it gets into grades/test/interest/lottery/preferential treatment based placement. Your kid has to apply to middle school and then again to high school, much in the same way they do for college. You might live in a rich enough neighborhood that your PTA, no joke, has a multi-million-dollar budget.. and famous actors showing up to school events/donating things/etc. After 5th grade though, your kid could end up anywhere from, at the high end, a nationally known high school with famous alumni, and dozens of kids who end up in Ivys every year. Or in a school 45min+ away by train, with a sub-70% graduation rate, and basically zero PTA to speak of. This can create some serious brain worms for parents who have enough money to live in a rich suburb with good schools, but choose Manhattan & public schools (run out of money for private). People should do what they want, but they should do it with eyes wide open.. and not project their desires too much onto their children.

steveBK123 4y ago

Yeah I mean, $300K HHI in a 2-3 BR coop in Manhattan with multiple kids is tight, right. People in that category are probably "house poor". Easily spending north of 50% of monthly income on housing, with most of their savings tied up in home equity. I had a friend like this who lived in a $2M condo and conceded the down payment came from family (even after flipping up other condos for a decade) and that he didn't really have a 6 month savings cushion. $300K in Manhattan..after-tax you're looking at $180K/year maybe, so $15k/mo. $3k alone on RE Tax, maintenance & insurance on a 2-3BR coop in Manhattan, forever, whether you have mortgage or not. $5k on mortgage probably, even if they've owned a while with a good entry price and high down payment.. probably $1M mortgage. So now you have 53% of your money immediately just to having a roof over your head. Hopefully you are saving 20% for retirement, your kids college, and a rainy day. Which brings you down to having $4k/mo for electricity, internet, phone, food, clothes, transport, holidays and basically everything for a family, in a place where everything costs a lot of money. Hopefully you don't do something dumb like own a car and spend another $1k/mo on loan/insurance/garage.

steveBK123 4y ago

I think people also underestimate the variance of experience of NYC public schools before overleveraging themselves like this. K-5 is basically zoned, provided there is space. So you can buy yourself into a good school, unless a lot of other people did first and you get shunted off to an adjacent not-so-great one. 6-12, it gets into grades/test/interest/lottery/preferential treatment based placement. Your kid has to apply to middle school and then again to high school, much in the same way they do for college. You might live in a rich enough neighborhood that your PTA, no joke, has a multi-million-dollar budget.. and famous actors showing up to school events/donating things/etc. After 5th grade though, your kid could end up anywhere from, at the high end, a nationally known high school with famous alumni, and dozens of kids who end up in Ivys every year. Or in a school 45min+ away by train, with a sub-70% graduation rate, and basically zero PTA to speak of. This can create some serious brain worms for parents who have enough money to live in a rich suburb with good schools, but choose Manhattan & public schools (run out of money for private). People should do what they want, but they should do it with eyes wide open.. and not project their desires too much onto their children.