Expensive Ass Manhattan Apartment

[KittyFooFoo]

Hello!

Recently, I had the good fortune of getting a big new job as a software developer at an NYC hedge fund.  Work is right by Times Square. 

We're considering leasing an expensive ass apartment a short walk (~half mile) from my work, and we'd like crticism on our thinking. 

THE MOVE:
* Elevates our combined income into a new atmopsheric layer: $144,000-->$237,000
* Frees up the cost of daycare for our 10mo son: my wife's employer is allowing her to work 100% remotely (she is a disability attorney).  It will involve some nonstandard hours on her part, with maybe 4-5 hours a day of work during normal business hours plus some early morning/nights while I'm at home, maybe a little weekend time. Obviously this will be tough, but we've decided it's a hustle we want to try for the $25-30,000 savings on daycare. 

Our current financial situation:

ASSETS
~$55k retirement
$20k cash
Two cars we will sell.  just got them appraised for a total of $8500-9000

DEBTS
$159k law school debt @7.5 and 6.5% (down from 180k when we started paying this May)

Still a tender position financially, but net worth has increased by $50-70k since we started getting our shit together last April (paid off 2 car loans, saved $20k cash fund, increased retirement balances and paid off $20kish of student debt).

EXPENSES (2 adults, 1 10mo infant, 2 medium dogs)
Currently $4800/mo, which includes $1300/mo for full time daycare and $1320/mo for rent.  We definitely have a few luxuries in there, but are running moderately frugal outside of daycare.  Moving to the city, we will roughly trade rent increase for childcare cost, and consider shaving off a couple fancy things to the tune of
a couple hundred dollars a month.  We've posted our full budget before, but it's a bit off topic here--I just want to think through the tradeoffs of living in an expensive midtown apartment.

SO.  now I have this fancy job in times square and need to decide where to live.  Our general thoughts on this:

* We do not place a high premium on space.  We are very willing to pack into a small apartment, be creative with storage and space.  A teeny 2br is fine, but packing into a city 1BR--though I believe it is possible--is a little too small for us.
* We do place a high premium on time.  Commuting is evil, even on public transportation.  I've done a lot of public transportation commuting before, and I find that although in theory you can read on the subway, it's *not* the same as reading in a quiet room.

Here's what we are leaning toward:

2BR Midtown apartment.  0.6 miles from my work.  10 minute walk to work each way per day.  $2900/mo rent.  Here is a video I made of what the space looks like, apologies for the horrible video quality: https://www.youtube.com/watch?v=VqAduD9VSq8

Based on our research so far, it doesn't seem realistic to beat this price for a 2BR within walking distance to Times Square.  You can mayyybe go $150 lower for a smaller, VERY bare bones place, but the tradeoff seems questionable.

The major alternatives people mention are living in Queens, or living in Hoboken.  I was initially going to go this route, but was surprised to find that these areas offer $1800+ minimum rents for 2BRs, with $2100 being a realistic price with similar space constraints. 

Suppose that living in Queens/Hoboken may save $800 a month.  Both bring guaranteed 45 minute commutes during rush hour.  Over the course of a month, this is 1.17 extra hours of commuting a day, approximately 25 hours a month.  First, there is the immediate cost of a MetroCard I otherwise wouldn't buy - $115.  Now we're talking $685 in monthly savings for 25 hours--this values my time at $27.40/hr.  My time is more valuable than that.

Then, there are the intangibles associated with this extra time.  My new job will probably be quite demanding, and time will be critical.  Trading a pain in the ass long commute for a breezy walk offers obvious stress benefits.  Together, these factors may translate into improved job performance, which could pay off at end-of-year bonus time.  And 25 hours a month is a *fucking lot of extra time*--it's enough time to pursue a serious hobby, or read a shitload of books to my kid, or work out an hour a day 5x a week.

In our income situation, this is the difference between an annual net worth increase of $115k, or $107k.  It's a splurge, but it buys something *valuable*--time--while cutting annual savings by less than 10%.  I think it's a justifiable tradeoff.

I'm interested in hearing all reactions.  Facepunch away :)

[frugal_c]

I would get the $2900 apartment or something similar.  I really don't know new york real-estate so I can't comment on whether there is a better trade-off but assuming this is a standard rate then I say go for it.   You are jacking up your income by 95k and reducing your daycare expenses so why not treat yourself a little.  You are also being relatively mustachian by cramming into a small 2 bedroom when let's face it, you could afford much more if you wanted to.  I do know that manhattan can be a bit sketchy in some areas so I think it is worth paying up for a better location.

I would run the math on buy versus rent as well.

[bacchi]

Living close to work is well worth it. You have the income to afford it and still save a lot.

[Otsog]

Idk. A side hustle that paid ~$27/hr tax free for 25 hours a month sounds pretty awesome.  I'm over 6 figures and would love to get paid that much to read.

[MoneyCat]

I would take a look at Harrison, NJ.  It's an up-and-coming town (and some say it will be the next Hoboken) with a direct commuter line on the PATH to the World Trade Center in Manhattan with unlimited 30-day ride passes costing $89.  You would save a lot of money on rent, daycare, and taxes by being in NJ instead of NYC while still not being required to purchase a car.  The downside is that a new Major League Soccer arena was built in Harrison a few years ago, so there is some heavy traffic on weekends during the soccer season (generally March-October; 17 home games per season) and weekend PATH service in the summer is limited because they will be working on the tracks on weekends for the next two years.  Harrison also happens to be less than a mile from Newark's Penn Station which is easily walkable or available one stop away on the PATH and Amtrak service from there goes to pretty much anywhere you want to go.

[iris lily]

Take that apartment, you can walk to work. EASILY! That's a gold mine, especially with a new baby in the family.

While I shudder at the idea of those NYC rents, your salaries can support it.

[sekritdino]

The apartment is expensive but personally I think avoiding the commute and having a nice walk twice a day is totally worth it. Your new income more than makes up for the cost.

[TheThirstyStag]

Your new income is very healthy.  Take the apartment closer to work.  The experience of living in NYC (even if it's just for a few years) is hard to put a price on, in my opinion.

[brooklynmoney]

Have you thought about Long Island City? It's like what 2 stops on the 7? Not sure how much cheaper a 2 bed would be, but you might get more space and amenities.

[mxt0133]

My then fiance and I used to do the 1+ hour commute from NJ to NYC and Jersey City respectively.  We took public transportation but needed a car because we lived in NJ.  Now we live in the City, SF not NYC, and if we had to move back east again I would not do the commute again, your quality of life increases dramatically by getting those 2+ hours back.  Plus the fact that you will be getting rid of two cars, insurance, gas, maintenance, the extra premium for a place closer to work is not as much.  Also take into the account a healthier life style for your family because you will be mostly walking combined with public transportation, with Zip car 2-3 times a month if needed, instead of being in a car 90% of the time to go anywhere in NJ.

[Dr. A]

I've lived on 54th and 8th and walked to work, and also lived in Forest Hills with a commute to midtown. Here are some miscellaneous thoughts:

• Walking 10 minutes to work cannot be beat. The subway ride from Queens (on the E) was usually quite pleasant, and it was nice to have some time all to myself to read books or play a stupid game on my phone, but after a couple years the 90+ minutes lost each day was a drag.
• I second the opinion to at least consider a few choice locations in Astoria.
• We moved to Queens before having our son, and the thought of having a kid in midtown remains a little nutty to me. The slightly slower pace and slightly more green was positive.
• Being able to cut out daycare entirely is awesome. That said, by about 2 or 3, a part-time daycare is actually a good thing, IMO
• I assume your hedge fund will frequently demand crazy hours. This makes a super-short commute even more important.
• A Manhattan 1-bedroom would be though, but have you checked out a Queens 1-bedroom that's a little larger?
• Not clear on where you live now, but be aware that the only City friends that will regularly visit you in Queens, are the ones that also live in Queens.
• Daycare in Queens is significantly cheaper than in Manhattan, on average.
• When you commute by foot, your route can never be shut down due to weather/police investigation/etc... Well, almost never.
• 44th & 9th is a little close to Port Authority and the Lincoln Tunnel for my taste, but I'm sure you've walked the neighborhood.
• We were car-less in both locations, and not once did it even occur to us to want one. We rented (zipcar for 1 day or less, traditional rental for multi-day trips) and saved thousands of dollars doing it.
• Not a huge expense, but commuting by train is a monthly expense that negates some of the rent difference.

*Full disclosure: you'd have to pay me to live in New Jersey.

[YoungInvestor]

W44th street (based on your video's title) is an amazing location, I'd love to be this close to the theater district and the Park.

The time saved + the location would be worth well over 800$ to me, and I don't make that kind of salary.

[Ricky]

Idk. A side hustle that paid ~$27/hr tax free for 25 hours a month sounds pretty awesome.  I'm over 6 figures and would love to get paid that much to read.

I'll second that. But I'd still stay in Manhattan considering their salary if I were them.

[ch12]

I'd stay in the expensive apartment right by work. With a baby, time is way more valuable than scrounging with your already sky-high income.

Quality of life is very important, and your wife will have a much better one with you only 10 minutes away if she's at home with the baby and working. Other people will facepunch me for this, but it gets hard to be at home by yourself, even if you're with a baby you love and working. I hope your wife has a plan to mitigate going stir crazy.

[alice76]

$2900 for a 2 bedroom in midtown is below market price. You're not going to do better than that in desirable parts of Queens, Brooklyn, or NJ, plus you have the bonus of a walking commute. I live 5 blocks away from work, and I cannot over praise that value of this commute on my family's life. By the way, I live on the UES in a junior four (similar rent to the one you quote) with my husband and young child. We are expecting, but we don't intend to move from our 900 square feet. This is pretty typical in NYC!

[Penny Lane]

Take it!  Looks real nice and the location will be awesome for the time being.  One daughter went to college in Manhattan, and we could not believe the prices for junk.  This one looks liveable. 

[iwasjustwondering]

The 10-minute walk is awesome, but wonder what the neighborhood is like for a young kid -- any parks nearby? 

Also, this is not what you asked about but I SERIOUSLY doubt that your partner is going to be able to squeeze in 4-5 hours of work during business hours while tending to a toddler.  It is easier to do that when babies are very small and sleeping more frequently, but as they get older/more mobile/more demanding of your attention it is REALLY difficult to find the time to do significant chunks of work, especially work that demands concentration/high order thinking.  Personally I would at least line up someone for 2-3 hours of childcare daily so that she can guarantee at least a few hours of quality time put into work per day.  Will also help reduce stress on her and on your marriage.

+1.  A 10mo does not need to be left to his own devices for four to five hours a day while the mom works.  How can this even be within the realm of consideration?  Toddlers need engagement and fun, and to go out exploring.  If the mom is going to work, then you need childcare.  I worked from home for seven years, and I had childcare when I was working.  This is really not where you want to cut costs. 

[NYCMiniBee133]

That's not ridiculous for nyc for what you described-did you factor in broker fee or are these buildings where you can go direct?  The one suggestion I'd make is that commute doesn't have to mean 45 min. If you're nears Times Square, living right by a 7 train stop in LIC can get you there in 15 min. Everything in LIC is somewhat cheaper (dog daycare, haircuts, etc.) if that matters to you. If space isn't your biggest priority, you might also look at 1br flex 2 spaces you can convert. (You can get close to the same sq footage as the 2 BRs). That can drop your rent by 500-600+ a month and you can put up the wall yourself for 1k with a wall company

[pbkmaine]

1) Take the apartment. I commuted into NYC from New Jersey for years and it was beyond horrible. 2) Your wife needs childcare while she is working. That could be you or a third party.  It is impossible to do serious work and care for an infant at the same time.

[KittyFooFoo]

Thanks all for the responses. We put an application down on this apartment; now hopefully we get it!

Regarding daycare, we are definitely aware of all the options: her working part time, not at all, part time daycare in home, part time daycare elsewhere, even full time daycare for $2k a month is in the area. We've discussed them all and are willing to do whatever is necessary. Almost enough material for another thread, but we are still getting the full picture of local options, wait lists etc.

[CommonCents]

Will you be in the apartment for a long time?  Keep in mind any daycare savings are limited time (and couldn't you have those same savings in any apt?). Finally, I agree with the poster that a side hustle saving me/earning $27/hr for 25 hrs a month sounds awesome.

Don't get me wrong, I bought more house than a strict mustachian would - but I also call the space a spade and admit it.

[brooklynguy]

A few other factors to consider:

- if you live in a non-trendy neighborhood in one of the outer boroughs, your costs of living generally will be significantly lower (not just housing, but groceries, local restaurants, etc.)

- the normal rule of commuting that being farther from your workplace equals a longer and more expensive commute does not necessarily apply in NYC.  If you commute by subway, the cost is the same no matter where in the five boroughs you are located.  And because of the differences between express and local subway lines, you can get to midtown by subway from some of the more far-flung neighborhoods more quickly than from some of the closer neighborhoods with worse subway lines

- don't discount the possibility of bike commuting.  I commute by bike from central Brooklyn to midtown Manhattan (about 11 miles)

[iwasjustwondering]

I've done part-time daycare in home.  The nice thing about it is that you can stop by and see the kid in the other room, and you're also keeping an eye on the daycare provider.  I had a great in-home dcp, and a lousy one.  The lousy one sat in the living room with my 2yo watching TV while I worked in the office.  I was like, if I wanted him to watch TV all day, I wouldn't need *you*, would I?  I could just plop him down in front of it.  But if you get a good one, it is nice, especially if the mom is still breastfeeding. 

[KittyFooFoo]

fuck balls everybody the apartment fell through.  Realtor said LL would be fine with the dogs, LL was not fine with the dogs.  Back to the drawing board.

[MandalayVA]

Aw, damn, sorry to hear that.  Keep looking!

[Dr. A]

Manhattan apartment searches are miserable, but keep at it and you'll find what you're looking for.

[v10viperbox]

You will find another apartment. You could not drag me back to NYC without living walking distance to work period. Without the need for cars and public transport I swear its cheaper to to just get the good apartment and understand that you are saving in other areas.

At your salary which is close to mine saving another 500$ or so a month to like outside the city is crazy when you have a small child. Your time is just to valuable, plus living in the city will help with your career in the long run when you can do quick covers or stay after work and not worry about the commute with the shiny suits. 

[Lis]

*Full disclosure: you'd have to pay me to live in New Jersey.

Spoken like a true New Yorker. I love it :)

[artistache]

Look at Harlem/Morningside. Best neighborhood in the city and an easy bike/transit commute to Midtown. Plus our parks are the best, perfect for little kids.

[Sarita]

It does suck.  As a girl who lives on the UES and also spends a lot of time commuting back and forth from my boyfriend's home in Princeton, NJ, I can definitely say that it's worth the extra $$ to stay in Manhattan.  The commute from NJ is horrific.  I second the suggestion to look in Harlem.  I assume you have already jettisoned any idea of a doorman or washer/dryer, which helps a bit.

I also recommend the UES as a source of more reasonable apartments, though of course you'd have a bit longer commute.  But it's safe and family-friendly and Carl Schurz Park is nice with playgrounds for kids, dog parks and a promenade along the East River.

[KittyFooFoo]

Haha.  Definitely jettisoned doormen, W/D, even a dishwasher.  Tonight we taped off two rooms in our apartment to mark off the boundaries of some of the bigger 1Brs--17x13'7 and 16x11'8 for example.  We found these rooms are more than big enough to fit all our stuff.  So, we are going to expand our search to big 1BRs, depending on floor plan.

Carl Schurz park!  We stayed in NYC for the summer of 2010, and lived within walking distance of that park.  I went there to study chess (I'm a serious player) or play with the local guys at the chess tables almost every day.