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a co-op in the boroughs has really not been great as an investment. what it is great at is cost cutting if you live in it.
i gave one of our co-ops to my ex wife.for the 650.00 a month she pays in maintaince she lives in an apartment that rents for 1600-1700 bucks.
when we first bought it in 1987 it rented for 850. so it took 27 years just to double in rent and appreciation was a bit more but no great shakes.considering the same amount in the portfolio model i follow is 1.8 million over the same time frame you can see co-ops lagged way behind,.even just an s&p 500 fund would would have been 1,.4 million.
some borough areas may have seen more and some less but pretty much except manhattan they all lagged as investments.
but for cost cutting they can eventually save you quite a bit of housing costs.
a co-op in the boroughs has really not been great as an investment. what it is great at is cost cutting if you live in it.
i gave one of our co-ops to my ex wife.for the 650.00 a month she pays in maintaince she lives in an apartment that rents for 1600-1700 bucks.
when we first bought it in 1987 it rented for 850. so it took 27 years just to double in rent and appreciation was a bit more but no great shakes.considering the same amount in the portfolio model i follow is 1.8 million over the same time frame you can see co-ops lagged way behind,.even just an s&p 500 fund would would have been 1,.4 million.
some borough areas may have seen more and some less but pretty much except manhattan they all lagged as investments.
but for cost cutting they can eventually save you quite a bit of housing costs.
I would imagine that's a huge aberration and not the norm.
Rents have far more than doubled in just about every area in NYC in the past 27 years. As have co-op prices.
I grew up in Chelsea and LES, in the 80 and 90's you could get a HUGE apt for 250k or less... an apt like that would be millions today.
nope , borough rents have not gone up all that much since then. remember we had a horrible real estate crash in ny in 1987 after the stock market crash. co-ops lost 20% in value easily when the smoke cleared and rents fell with it.
it took years to come back.
looking at 1 bedrooms in much of queens i see them in the 1600-1700 range so no it is not an abberation.. 1 bedroom co-ops in kew gardens are going in the 180k range today as well.
forest hills is a little more ,they rent for about 1900 in a typical co-op building ,non luxury.
Last edited by mathjak107; 11-30-2014 at 03:09 PM..
nope , borough rents have not gone up all that much since then. remember we had a horrible real estate crash in ny in 1987 after the stock market crash. co-ops lost 20% in value easily when the smoke cleared and rents fell with it.
it took years to come back.
looking at 1 bedrooms in much of queens i see them in the 1600-1700 range so no it is not an abberation.. 1 bedroom co-ops in kew gardens are going in the 180k range today as well.
forest hills is a little more ,they rent for about 1900 in a typical co-op building ,non luxury.
a 1 bedroom in Kew Gardens was 80k in 1987?
Co-ops going back only 10-15 years were 70k where I live in Jackson Heights, and they are going for triple that now.
I suppose if you take a very specific time frame you can make just about anything look like a bad investment.'
Gold is down 40% in the last 3 years, but up 500% over 10-15 years.
I would imagine that's a huge aberration and not the norm.
Rents have far more than doubled in just about every area in NYC in the past 27 years. As have co-op prices.
I grew up in Chelsea and LES, in the 80 and 90's you could get a HUGE apt for 250k or less... an apt like that would be millions today.
a median price for a 1 bedroom in chelsea today is 750k . it was in the 400k range 10 years ago so they had a 60% increase the last 10 years. but manhattan is very different from the boroughs and always was.
a 2 bedroom in chelsea has a median price of 1.3 million vs 880k 10 years ago.
Co-ops going back only 10-15 years were 70k where I live in Jackson Heights, and they are going for triple that now.
I suppose if you take a very specific time frame you can make just about anything look like a bad investment.'
Gold is down 40% in the last 3 years, but up 500% over 10-15 years.
actually i bought the kew gardens apartment 2 weeks before the market crash for 77k. by the time the smoke cleared in 1995 prices on co-ops like mine plunged to 56k . on average prices fell 30% in nyc from 1987 to 1996 , it took a decade to come back so yes they were just about the same price in the 1990's as they started out in 1987
jackson heights ranges for a 1 bedroom from 125k or so up to the 500k range depending on the building and where in jackson heights. you are trying to generalize to much . the ranges are going to be very building dependent.
on average residential real estate in the boroughs less manhattan has only beaten inflation by a smidgeon long term. in fact our central park co-ops are going for about 10% more than they did at the peak in 2008. overall manhattan saw about a 2.50% increase a year since then.
there are quite a few reports out with historical data. most of what is in peoples heads are incorrect as far as prices and usually what they thought things were is pretty far off because they are not comparing the same property..
If you want to buy an apartment in NYC, and especially Manhattan, you have to look at coops, because they're the majority of individually purchasable apartments. Condos came into the market much later than coops, there are still far fewer of them. And for someone who actually wants to live in the apartment they bought, the additional control coops impose may actually be a good thing, if you don't want other residents impacting your quality of life. They also tend to be cheaper to buy than condos.
BTW, if you're looking for an affordable, relatively cheap apartment to buy, look in southern Westchester. There are a good number there, they generally have reasonable commutes into the city, and they tend to be much cheaper than the better areas of the city.
Thanks for the tips! But if my cousin does leave I'm allowed to have a roommate as long as I still live there. I mean I know I haven't gone through the numbers completely yet but if my cousin moves out and I still get rent for about half my mortgage it would be the same. I would just have to find a coop cheap enough to do that. I do prefer to stay in manhattan or brooklyn but houses seem to be scarce in brooklyn or am I just not looking in the right places?
Also it's not like my parents are completey supporting me. I still make 50-60k a year which is under the 120% level of income and my parents are going to give me the downpayment in cash. So it's not like the board will know my parents are helping me out.
I'm not sure how long I'm gonna stay in nyc but I feel like it's going to be atleast another 8 years cuz of school and since I'm in design nyc is where I should stay for a job.
Also where do you guys search for houses in nyc? I'm using streeteasy and houses just seem so scarce
IMO, Plenty of good coops in NYC. I would try to buy one without a flip tax at all. I had a buddy that thad a sliding flip tax. If you stayed in the building after 5 years then zero flip tax. After 1 year it was pretty steep. 5% of sale.
Also it's not like my parents are completey supporting me. I still make 50-60k a year which is under the 120% level of income and my parents are going to give me the downpayment in cash. So it's not like the board will know my parents are helping me out.
I think you underestimate how thorough a co-op board can be in requesting your financial information. Even if you don't tell them that your parents fronted you the down payment, they may turn you down if you don't have enough assets in your name once the down payment is handed over. They usually like to know that if they have a special assessment come up shortly after you buy, that you'll still have enough to cover it.
Also, I'd check on the flip tax. In my deal, it was a certain amount (less than a dollar) but multiplied by how many shares the apartment was worth. It didn't matter to me, though, as the seller was responsible for paying it, not the buyer. They also set the amount of a down payment I needed to have (30%), so make sure you inquire into this as well.
All in all, if you want to control your expenses for the next potential 8 years that you may live here, a co-op is a good way to go. You'll be able to cap your costs to an extent and also receive a tax write off on your interest plus a portion of your maintenance. Also - Queens is starting to make a lot of buzz for more affordable units. You might want to look there.
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