Five Ways To Save For A 20 Percent Down Payment In New York

It might seem impossible, but here’s some ways to get that down payment together.

By Jeff Vasishta September 9, 2016

OK, first things first—put Manhattan out of your mind. If you’re struggling to find a 20 percent down payment, you shouldn’t be looking in Manhattan. That would be like struggling to pass your driving test and putting your name down for the Indie 500. There are, though, plenty of places in Queens, Brooklyn, The Bronx and Staten Island where you can find a studio or one-bedroom and in some case a two-bedroom apartment for under $500,000. That means, your mission, should you choose to accept it, is to come up with $100,000. This information will self-destruct—just like your bank account—if you’re continuing to pay rent.

Related: 5 Pros & Cons Of Buying Investment Properties In College Towns

1.  The Parent Trap

Yes, millennials, no late night partying or bringing home hot dates. If you’re serious about saving, it’s time to move back into your old bedroom with those Outkast, Eminem and Britney posters. Even if you’ve secured that six figure job, don’t blow it on making your landlord rich. Stay at home, mow the lawn, take the garbage out, enjoy mom’s cooking and watch your bank account grow. A new report by Pew Research on the living arrangements of young people shows that more of them are living with their parents now than they were in any year after World War II. Thirty-two percent of millennials live with their parents, slightly more than those who live with a partner or spouse.

2. Don’t Bad Mouth The Commute

You’ve heard of the phrase speculate to accumulate. You need to speculate on living outside of New York to accumulate enough cash to live in New York. If you’re an avid reader and don’t mind 90 minutes on the train, it’s worth entertaining the idea of leaving New York to get back into New York at a later date. Yes, I know it’s the opposite of how people usually do it. Bear with me. Paying $3000-$4000 in rent will never allow you save enough for a down payment in New York. Rather, you could buy a decent 3-bedroom town house over an hour outside Manhattan for $150,000. It may also get you a pool, gym and parking. Even if it doesn’t, you can assume your mortgage payment will be around $1300/month with taxes and insurance. Yes, you will have to add on the commuting fees—perhaps $500 a month if you work full time—but if you can work remotely a few days a week then your commuting costs will be cut. It’s a great way for you to save money and build equity to fund your move back into the city.

3. Buy With Others

Buying a brownstone on your own or even a decent duplex may be a pipe dream, but if you chip with friends, as recently reported in the NY Times is happening more frequently, getting on the NY property ladder may be a reality.

“It’s a really good way for people to work the system,” Marina T. Schindler, a saleswoman at Compass real estate told the Times. “Not everybody has that money for a down payment. They realize if they team up, they get more bang for the buck.”

It’s a complicated process, she added, “because they’ve got to have an agreement between each other, they have to trust each other, but it’s a great way for young families to make a bigger, better investment.”

4. Save, Budget & Get Your Side Hustle On

Have you seen the movie, “House of Sand & Fog” with Sir Ben Kingsley? He takes saving to a whole ‘nother level, keeping a ledger of every single expenditure, even down to a Mars Bar. By doing this he finally achieves his dream of buying a foreclosure in San Francisco. If you are prepared to embark on that level of monastic, high level frugality, you may be able to squeeze out a way to fund your down payment. However, saving alone won’t get you there. You have to do it in conjunction with other belt-tightening and cash-flowing endeavors. These would include:

  • Refinance or eliminate any debt – student loans cars payments etc.
  • Work an extra evening job – Home Depot, Starbucks, teaching etc.
  • Get a roommate to help cover expenses.


5. Consider Being An Expat

If ever there’s way to stack up a ton of cash its by working overseas for a good company. Expat packages in these cases often include accommodation and if you’re not an American citizen, you may also be able to forgo taxes (Dubai charges no taxes). Even for US citizens living in tax free countries, the cost of rent can usually be deducted from your taxes. However, these packages are becoming less available as they once were. The key to landing one is to work for a western company in a developing country where accommodation and services (house cleaning, personal chef, driver etc.) are cheap. You get paid a salary according to western standards, and get a ton of perks thrown in. It’s great for young families who need help with child care and don’t want to fork out the expenses associated. When it’s time to head back to NYC, you should have a ton of cash in your bank account, with your trigger finger itching to call your broker. Woo-hoo!

Jeff Vasishta



Jeff is a writer, husband and father but not necessarily in that order. As a music journalist he counts Prince, Beyonce and Quincy Jones amongst those he’s interviewed. He's also owned and flipped homes in Brooklyn, NJ, CT and PA.

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