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One thing to keep in mind for everyone is that senior citizens who earn under a certain income per year, are eligible for a property tax exemption. So if you own a coop and are a senior with a low to moderate income ($58,399 for a household owning the coop), you may not have to pay the property tax portion of your coop's maintenance fees.
I will summarize what people have said in this thread.
- Some buildings have mortgages (land leased or owned. We own the land our coop is on.)
- Some buildings cover all utilities, some cover minimal.
- Some have elderly people who are able to deduct some property taxes.
- Some buildings charge common charges, others charge common charges and then tack on assessments. (I would rather pay more than be hit with assessments, that way I can predict my cash flow.)
I will also add (opinion) that common charges are likely higher in smaller buildings. I think there is something to said about volume.
You can find out what the common charges are on Redfin to get a sense of what other's pay.
This is why I scratched my head when the other article said there is ANY POINT in which buying becomes cheaper than renting in NYC area...
it can be cheaper but every situation is different .
take our kew gardens co-op we bought in 1987 .. we paid about 77k ... today it is about 200k with 675 a month maintenance .
77k put in the fidelity insight growth model which i have been following since 1987 is worth 2.62 million .
today you can subtract out all the decades of rent and taxes and buy quite a few of those apartments with the difference . .
the fact my ex wife lives in it for 675 a month and market rent is 1800 dollars makes it look like it is a steal to own . but alas everything has a cost . in this case she would had a lot more money from our divorce had we not owned it and rented and invested elsewhere . .
so had we had the resources back then to choose buying for 77k or renting and investing else where , elsewhere would have turned out fabulous .
but had we not had the resources to lump sum in , well that is a different situation .
a mortgage would change the equation too doubling the cost when interest is figured , so there is no one size fits all outcome .
All well and good if you were old enough to buy anything in the decade I was born.... But even for older Millennials buying in NYC 5 boros is not making a ton of financial sense right now.
$2k mortgage + $2k in combined HOA/Taxes/Insurance/Maintenance/"Carrying/ Common Charges" etc. Each month. $4k a month vs. renting the same space for $2k.
In the buying scenario you have non negotiable cash outflows of $4k per month and $2k goes down the drain and not to equity
In renting you have non negotiable outflow of $2-2.5k per month which leaves $1.5-2k per month for 401(k) other investments , emergency savings etc. And only $2k down the drain....
Millennials and Gen Z can't afford even as moderately successful couple $4-5k outflow per month when wage tiers have remained at levels not much higher than when you brought your first property when adjusted for inflation. That is way too much leaving little to no disposable income for kids let alone any discretionary spending required to boost the local service economy.
There is entirely too much middle class money locked up in real estate and to the prior posters point - Where is all that money going??? Our city's infrastructure is still sub optimal. You cannot sustain a city purely off tourist spending and insane property taxes alone. If you look at most long term NYers middle class that own, they barely go or eat out so there's no sales tax being generated off them. Only property taxes which eat up most of what would be their discretionary spending.
At a macro level we see this is unsustainable and is leading to a dystopian NYC model where you have a large gap, the haves and have nots. Jackson Heights where people live 10 to a 2 bedroom apartment and Greenwich village, nothing in-between. This is where we are headed.
we got started by buying a co-op when we first got married . no way could we afford a home . in fact we bought as insiders when our building went co-op ......
it wasn't like if we rented we could invest much difference . the difference was pretty small .
my daughter got married and had a choice rent near us in bay terrace or buy a co-op for almost the same except for the down payment in howard beach . so they bought in howard beach .
but as years went on we built equity , bought a house , invested in markets later on too , eventually sold the house , bought a very very lucrative real estate business with the money that used to be in the house .
today we retired , we rent and all that dough pays us a handsome return .
so you don't walk in one day with all these options day 1 ... these are options that appear at different times in our lives. you may have to start with a co-op off the beaten path where they are cheaper .
but i can tell you this , poor is poor . no money is no money and if you can't even buy that first co-op , you may want to re-evaluate your financial life and career path .
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