<p>My son’s friend’s parents bought a two bedroom condo on UES for their two daughters to live in when they were going to a private high school in Manhattan (parents lived in NJ.) Both girls are in college now, not in the city, and it’s on the market for $2M+. </p>
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<p>And even then, there are some condo associations which won’t approve this arrangement because the primary owner isn’t living in the unit and they may be wary of having a unit completely occupied by traditionally aged undergrads due to fears of possible noise and other issues. </p>
<p>“Rent/Purchase is pretty low in NYC” - Please, provide details where you can buy at lower than close to $1 mln. I do not mean some dump. I bet “renting” could be even free, if onw lives on streets. but I do not think that we are discussing something like this. As far as know NYC is one of the most exapnsive places to live and one of the worst by my taste.</p>
<p>“Rent/Purchase is pretty low in NYC” - I interpreted that to mean that even though rentals are expensive, it still can make sense compared to purchase. For example, rent in article posted earlier was $4000/month. Purchase price was $1.3 millon (which invested could generate more than $4000 per month)…AND owner still has to pay property taxes and I assume also monthly fees. </p>
<p>I suppose a lot depends on how much you expect the market to appreciate.</p>
<p>Is everything decent over $1 million?</p>
<p>Not if you are looking at a studio.</p>
<p>It all depends on what you are looking for. I would say in good areas of Manhattan, with a 24 hr. Doorman, studio co-ops will sell for about $400,000 to 650,000 with maintenance in the $600 to $1,200 range. A true one bedroom is more in the $700,000 to 1,200,000 range with maintenance of $1,500 to $2,200. Condos generally are priced on the higher end, but the monthly carrying charges are lower. You can find both coops and condos that will allow pied a terres or parents financing apts for children, but not all buildings will allow it. </p>
<p>It is amazing how studios and 1 bedrooms are popular in NYC. </p>
<p>Most areas of the country are quite different.</p>
<p>I do love nyc though. </p>
<p>One of my kids is living in nyc which gives me an excuse to go there.</p>
<p>What is the property tax on 1 million or is that included in the maintenance costs?</p>
<p>Fireandrain–people are not forced out of their apartments if they are issued a lease in a rent stabilized apartment. There are over a million rent stabilized apartments in the city, you just need to understand the system and know what apartments are protected and try to avoid those that are not. In general apartments are stabilized if the rent is under $2,500/ month, has at least 6 units and was built prior to 1974. Newer buildings are stabilized if the developer took advantage of tax incentives. Subleases or leases from co-op/ condo owners are not covered. Rent increases are regulated by the city and you are offered 1 or 2 year leases in stabilized apartments. </p>
<p>For co-ops, property tax is included in monthly maintenance. For condos, you pay common charges and taxes as separate expenses. Considering the cost of properties, property tax in NYC is not astronomical. </p>
<p>We have bought and sold our fair share of co-ops in NYC. We do know people who have done what you are contemplating, mostly with children out of school that had just landed jobs. It can be a great way of carrying a real estate investment in a city like NY. I think you have gotten some great advice and I would particularly take note of the fact that many co-ops mandate that the financials of the occupant support the mortgage and maintenance payments (although I have no experience with the Borough of Queens). I think your real estate broker can be very helpful here and steer you towards co-ops that might have more flexibility and will consider a guarantee by a parent. Sometimes the buildings that will allow a pied a terre will consider the arrangement you are contemplating, but not always. It can be a long process with a lot of financial and social disclosure culminating with an interview that leads to board review of your application. It can be a bit of a PITA. If you don’t have the patience for all of this you can always go condo, but as others have pointed out there is a premium in price for all that freedom.</p>
<p>We took the time to attend a few open houses recently when we were in the city for college tours to get an idea of the general state of the market. We concluded that NY real estate was extremely strong right now and if you were contemplating selling it would be a great time. I have no crystal ball but I have to think that in NY they are approaching the top of the market right now. We have no immediate need so we will wait.</p>
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<p>You are basically paying for your own vertical air space high up on a tiny plot of land.</p>
<p>Thanks for all the suggestions!
I found a small condo in queens and I asked property disclosure since I am interested. The agent told me it is not common to ask for property disclosure.
When I bought houses in other states, I got property disclosure before I put offer. I know this is just a condo, but why I can not get property disclosure? </p>
<p>As I remember when my son bought his coop, his lawyer asked questions including known leaks since the apt is on the top floor. That is after he made the offer.
In NY, you have to make the offer first and then have your lawyer handle everything else. It’s prudent to engage a lawyer first and ask him about all the procedures before you make an offer.
But in a small apt, what kind of disclosures do you want? Just make sure everything works inside the apt and the outside is the responsibility of the condo association. Houses are different from a small condo.</p>
<p>You can certainly hire an inspector to check out the apartment and the building. </p>
<p>I do not believe there are any disclosure laws covering co-ops/condos in NYC. There is the federal requirement relating to the disclose of lead paint and that is it as far as I know… After you have an accepted offer your attorney should contact the managing agent for the building and obtain the offering plan and the building financials. Copies of the most recent board meeting minutes are also something you want to review. It is here that you will see things like pending lawsuits, problems between tenants or issues with the building that the board is addressing. The managing agent should also let you know the size of the buildings capital reserve and when the last maintenance increase was. You would want to know if there are any major improvements being contemplated and if so how they will be financed. </p>
<p>You will want also want to know things like the building’s sublet policy, if there are restrictions on the time of year improvements to your unit can be made and who pays the flip tax. I remember submitting a list of questions to the managing agent and having no problems getting answers. </p>
<p>Thanks, Harvestmoon1</p>
<p>After your offer got accepted, you started to get the information like the financial report, most recent board meeting minutes, etc. if you find out issues, can you still back out?</p>
<p>I mean your offer is already accepted. Is it too late to back out?
When I bought houses outside NYC, I got all requested information including property disclosure and then I put out offer. If the disclosure contains false statement, buyer can back out.</p>
<p>In NYC, the property disclosure have a item asking the seller if this place solely owned by the seller or is there any lien exist. I don’t get it why seller refuse to provide this and why it is not required by law.</p>
<p>Thanks everyone for all your post. I really appreciate your kind help!</p>
<p>I think you will find that an “accepted offer” in NYC doesn’t mean all that much. Some brokers will continue to show the apartment. It is an executed contract that binds you. All real estate contracts have certain “contingencies” that if not met, one party has the right to cancel. For instance the buyer obtaining financing is one usual contingency. If you have specific concerns about the unit you are purchasing you should speak to your attorney about getting those contingencies written into your contract.</p>
<p>As far as liens on the unit, how you approach that depends on whether the unit you are purchasing is a co-op or a condo. Remember, in a co-op you are purchasing shares of stock in the corporation. Stock is personal property not real estate, so it is important to do a search on liens against the seller individually. But your search should also cover the building itself and should show any liens or judgments outstanding against the whole co-operative and it’s outstanding shares. I also do not think it is customary to purchase title insurance on a co-op as what you are purchasing is, in reality, a proprietary leasehold interest to occupy that particular unit. There are hybrid insurance products that cover co-ops but I do not think they are purchased by the majority of buyers in NYC.</p>
<p>I really do not have experience with purchasing condos in NYC as all of our units were co-ops. There are nuances in how these sales are handled - one being that it is customary for Title Insurance to be part of a condo transaction since you are purchasing actual real estate. The title insurance should protect you against any liens that were not detected during your initial search on the property. </p>
<p>Your attorney should handle all of this for you.</p>
<p>Forgot about contingency! It really make sense now!
It seems very important for me now is to find a nice lawyer. </p>
<p>You need a competent lawyer with whom you feel comfortable working. </p>