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I lived in NYC 10 years ago and still get nostalgic about it, but now have kids, family and cant move back, but want to buy something incity ( possibly in manhattan) as rental property .
1. is it a good time to buy
2.have a small budget around 500,000 ,so can I find atleast a small studio in Manhattan
3.would prefer to buy a new condo ( studio) , or am i totally out of mind and would not get anything new in that price
4.is it true , someone told me that if you buy a new condo , u dont have to pay taxes for 8-10 years
5.is the rental market strong , i hope to atleast cover major part of mortgage via the rent
I am sorry , too many questions, but I will really appreciate some feedback
If you want it as a rental you have to buy a condo. Most co-op boards would never let you rent out a co-op. That really limits your choices and you will pay a premium.
I think when you add common charges (basically the monthly hoa type dues for the building) and taxes with a mortgage, I do not see how you can come ahead in renting to make a profit.
As far as not paying taxes, some buildings have tax abatements for x amount of years, but you should be sure to check what is the case in any building you are looking at.
The Manhattan market is in what some call an "upside down" mode now where purchase prices are completely dislocated from rental values. There are virtually no apartments that would allow you to even approach break-even (either on a cash or implied return basis) at current asking (or selling) prices and current rent prices. Crunch the numbers, and do your homework, before becoming an absentee landlord.
I get a general idea for the market, I want to re -phrase my question a little bit , if I understand from the replies
1. I should be able to get atleast a NEW studio condo in manhattan for around/under 500,000, please correct me if i am not wrong
2.the new condos do give tax break for about 8- 10 years, so in those years , dont have to worry about taxes
3.so I have to pay for the mortgage , which should get covered by the rental income ( atleast most of it)
4. that leaves me 1000-1500 /mth for the maintainence fee around 15-20k to cover each year
So I am right in hoping that if I buy now , rent it out, end up paying 100k in those 5 years from my own pocket, do you think the value of the condo will go up much more then 100,000 for a new condo in 5 years and maybe I would not be able to get something for 500,000 after five years , am I right in thinking that the prices are low right now or not, or shd i wait for worse news on unemployment front next year and hope the prices will come down further. I am also assuming that the rental market will always remain decent in Manhattan atleast
Many owners who rent out their condominiums don't want to have the hassell of dealing with the tenant - so they farm that out to a management agency. Remember, as landlord YOU would be responsible for arranging any repairs (which are NUMEROUS in new buildings), showing the apartment, etc. So factor THAT cost in, as well.
I agree with PPs: I just don't think the numbers work out.
Who knows where the market will be going... and remember: you could always get stuck with a bad tenant who you'd have to evict (esp in tough economic times as people are losing their jobs). This costs money and time & you'd have to have extra cash to cover the entire mortgage during the interval while the tenant doesn't pay any rent. if you had multiple apartments that were turning a profit, you could cover yourself... otherwise... you are out $$$.
Plus, don't forget what you will actually be paying for the place. In 5 years, you prob will have very little of the principal paid off (assuming you are doing a 30 yr mortgage)... and are out the maintenance money and the down payment. If the market stays flat or rises mildly, you are much better off investing elsewhere with the risks.
Lastly, I think tenants are getting harder to come by.
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thanks for respones
