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Most co ops do not have high maintenance fees.The city wide average is about $1.00 per sq foot per month.That means that the average maintenance on a 900 sq ft 2 br apt is about 900/mo and usually 30% or 35% of that (300/mo) is tax deductible.
I live in a well run,very nice co op building and the maintenance on my slightly less than 1,000 sq ft apartment is 625/mo and 25% of that 625/mo is tax deductible.
I always wondered about that. How are the percentage of the maintenance fees that can be deductible from taxes being determined?
A common method of creating a co-op from a rental is for a landlord to borrow as much as he possibly can on the building, pocket the money, and THEN convert the buidling and walk away after he sells all the shares. In times of loose money that made for a VERY rich owner and a co-op stuck with a VERY large mortgage.
A trip to the bank could get the owner many millions.
I doubt that any co-operative was offered a building that was paid off.
So it is that onerous mortgage that is the usual cause of high monthly maintenance.
I always wondered about that. How are the percentage of the maintenance fees that can be deductible from taxes being determined?
It is determined by the percentage of the maintenance that goes to pay real estate taxes and interest on any mortgage on the building.Same as any homeowner who gets to deduct property taxes .
If a maintenance is presented as "30% tax deductible" it means that 30% goes to pay taxes and mortgage interest and the other 70% goes to run the building.
A common method of creating a co-op from a rental is for a landlord to borrow as much as he possibly can on the building, pocket the money, and THEN convert the buidling and walk away after he sells all the shares. In times of loose money that made for a VERY rich owner and a co-op stuck with a VERY large mortgage.
A trip to the bank could get the owner many millions.
I doubt that any co-operative was offered a building that was paid off.
So it is that onerous mortgage that is the usual cause of high monthly maintenance.
Not sure this is true.
The overwhelming majority of co ops in NYC were created in the 1980's and prior to the 1980's and many of them have paid off entirely or greatly paid down their original mortgages.My building went co op in 1987 with an original mortgage of 1.5 Million but it is now almost completely paid off.I know of many co op buildings that have no mortgages at all.
The biggest costs of my building are( in order) 1)NYC real estate taxes,2)building staff wages and benefits,3) fuel oil for heat and hot water and 4) general building maintenance and repairs.
If a building had such an onerous maintenance caused by an underlying mortgage it would be evident by a high % of tax deductibility.
A common method of creating a co-op from a rental is for a landlord to borrow as much as he possibly can on the building, pocket the money, and THEN convert the buidling and walk away after he sells all the shares. In times of loose money that made for a VERY rich owner and a co-op stuck with a VERY large mortgage.
A trip to the bank could get the owner many millions.
I doubt that any co-operative was offered a building that was paid off.
So it is that onerous mortgage that is the usual cause of high monthly maintenance.
where do you get this stuff? i swear you must just dream this stuff up and add your own spin.
the building when owned by the landlord has a mortgage on it. as the land lord tries to sell off the shares in a conversion he pays off the mortgage.
less than 100 % of the shares are usually bought in a non evection co-op.
the landlord becomes the sponser of any un-sold shares . the buildings origonal mortgage carrys over and is pro-rated over all the shares.and remains in place until paid off .
if the building had no mortgage in place at the conversion then the landlord can refinance the building but as the sponser he owes that money. not every one buys their apartment and those that do usually get an insider price so the landlords still on the meat hook for a big part of the loan.
the apartments that arent sold stay stabilized until the origonal tenant moves out.
Last edited by mathjak107; 08-07-2011 at 02:05 PM..
LOL. Many? This has happened in a couple well-publicized cases. Any sources on this?
They were well publicized because of the large sums of money involved. If some coop is being skimmed of 1k/ month by a board member(s), do you think it'll be publicized?
I can provide a few first hand anecdotes if you want.
So much? It's usually cheaper than rent. To compare it to a mortgage payment makes no sense, since mortgages vary. If your down payment is tiny, of course your mortgage will be high.
Maintenance does include property taxes, of course.
I guess if you want all the bells & whistles you're gotta pay for it. Many people do without hesitation. NYC would surely be a great place to visit but i would never live their just like some would never live in the hot & dry inland valleys & deserts of so.ca.
So much? It's usually cheaper than rent. To compare it to a mortgage payment makes no sense, since mortgages vary. If your down payment is tiny, of course your mortgage will be high.
Maintenance does include property taxes, of course.
270-
we rent our apartment in bayside. we pay around 1800 a month because we are there 30 years but new comers pay around 2k and we have a pool and tennis courts on premises although thats extra. to buy an apartment like ours is around 270-300k. just the income we get off 300k pays the rent and we would have another almost 1k a month in maintaince..
buying is not even close to being the better deal and wont be for at least a decade.
it takes a long time and many many years for renting to cross the line and be more than buying.
we own quite a few co-ops we rent out. the one in kew gardens took just shy of 10 years putting 20% down to get to the point where it was profitable on its own without the depreciation figured in.
typically rents are 30% less than the costs of ownership on day 1 of buying in decent areas..
Last edited by mathjak107; 08-08-2011 at 02:35 AM..
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