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This is in Suffern NY, which is in Rockland county. Its a 1 bedroom condo. $650 monthly fee includes heat, water and taxes.
in a nice high rise with elevator. Has Kitchen, living room, dining room and master bedroom.
Is this a good deal? On one hand it seems like it is a good deal since a comparable apartment will cost about at least $1000 in rent. Figure why not own if it would only cost $1200-1400 a month between mortgage and maintenence (which include taxes).
But on the other hand, having to pay $650 a month even if the mortgage is paid off means i would never be able to rent it out in the future. And I dont plan on living there forever since i would like to have kids in the future.
Why wouldn't you be able to rent it out if the loan was paid off ? The maintenance has nothing to do with it . You would rent it out for whatever you could get, pay the maintenance and keep the change.
Are you sure it's a condo and not a coop? Condo's generally don't have "maintenance" fees, but they do have common charges, which are usually lower than $650 for a 1-bedroom.
Reason I'm asking is because condo's are much more desirable since you will be buying real property, as opposed to a coop where you'll only be owning shares.
As mentioned, if it's a condo, then you pay the taxes yourself, and you pay common charges for maintenance. If it's a co-op, then the maintenance charge also includes taxes. At $650 per month, it sounds like it must be a co-op.
Co-ops are generally cheaper than condos, because there are some legal drawbacks to ownership. You technically don't own any real estate with a co-op, you simply own shares in the "co-operative," and as part of your share ownership, you get the privilege of residing in a specific unit. Often, the cooperative board has to approve sales and possibly even rentals. With a condo, you can typically sell it or rent it out, to whomever you want.
If you are thinking about renting it out in the future, you will want to take a very close look at the cooperative agreement, to see if there are any restrictions.
The maintenance fee wouldn't stop you from renting it out. Any landlord has certain ownership expenses, and their profit is based on the rent minus those expenses.
I know it's odd to pay more for maintenance and taxes, then you will pay in a mortgage... But that isn't extremely uncommon with co-ops.
As to whether it's a good "deal" --
The 2 questions are
1 -- how long do you plan to stay? If you're staying an absolute minimum of 5 years, and likely 7+ years, ownership is almost always the better option. You will gain equity over the long term. Plus, your mortgage interest payments can give you a nice tax deduction.
2-- How does the price compare to other similar units on the market, and recent sales?
Why wouldn't you be able to rent it out if the loan was paid off ? The maintenance has nothing to do with it . You would rent it out for whatever you could get, pay the maintenance and keep the change.
yea but if i am renting it out for $1100 and paying $650 a month in maintenance, thats not much profit in comparative to risk
And yea, its a Co-op. I should have said that in the begining
$1100 - $650 per month isn't much profit? It's a profit of $5400 per year.
For a $114,000 investment, to return $5400 per year -- That's almost 5% return per year. While also gaining equity in the apartment (value of the property going up). Thus, it's like owning a stock that is going up in value on average 2-4% per year, while also paying a 5% dividend at the same time.
You won't find very many investments that can match that! Not the 1% returns on savings accounts, or the 2-3% on CDs. Sure, you *could* get a better return on the stock market, with much much greater risk.
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