Should I Buy an Apartment In NYC?
Buying an apartment in New York City is more than just a status symbol of owning in one of the world's most iconic cities. It's also a solid investment decision. The key to deciding whether you should be purchasing a NYC condo or coop will be dependent what you plan on doing with the property.
One of the first questions that you need to be able to answer is whether the apartment will be an investment property or used as a primary or secondary residence.
I'm Buying an Apartment in NYC to Live in It
You have saved up enough money for a down payment and you are considering purchasing. Why should you buy in NYC instead of continuing to rent?
Buying a NYC apartment has the following benefits:
Apartment value appreciation. Every year, the NYC property market is seeing new records being broken. The value of real estate continues to appreciate year after year, as developers have not been able to keep up with the growing demand. Prices per square foot are soaring and the average property valuations continue a steady incline. When you decide it's time to sell, whether you are upsizing or simply want to move, you will lock in the profits. As your primary residence, you get the benefit of $250,000 in tax free gains if you are single, or $500,000 in tax free gains if you are a couple.
Choose between a condo or a coop. You are well positioned to decide between a condominium or a coop apartment. There are numerous differences to keep in mind. One of the main ones to keep in mind is that coops are often slightly cheaper than condos.
It's your apartment. Do what you want. Stop having to ask for permission to paint, install shelves or get new appliances. It's finally your own apartment. Make the apartment your sanctuary. You can do with it as you please. Of course, if you are doing anything involving construction, you will need consent from your board.
Lock in cost of living. When you deal with being a tenant in NYC, you also are at the whims of your landlord's discretion when it comes to rent increases. Buying property puts you in control to lock in your monthly expenses, while will consist of mortgage, common charges and taxes.
- Paying a mortgage instead of rent. Every month that you pay rent in NYC means that you are flushing valuable money away instead of paying into an asset. Paying a mortgage is made up of numerous components, inclusive of interest and principal. Paying off your principal reduces your debt load, while paying your interest pays off the bank for having borrowed the money. The mortgage interest that you pay off every month for your NYC apartment is tax deductible.
I'm Buying an Apartment in NYC as an Investment
- Buying an investment property in NYC is a secure investment. Whether you are buying under your personal name or under an LLC, New York City property laws are such that your investment will always be safe and secure.
New York City property values continue to increase. Year over year, NYC property values continue to surge. Every year continues to accrue large percentage growth in terms of property valuations. Here is data on the most recent quarter. YoY Manhattan prices are up 7.7% as of Q4, 2016. Whether you want to buy and hold for a long period of time or sell after a couple of years, you will be able to lock in your gains.
Apartments in New York City are liquid. When you ask yourself, "Should I buy an apartment in NYC?" because you are concerned about asset liquidity, remember that NYC real estate is sough by domestic buyers and foreign buyers across the world. If you need to wind down your property portfolio, it can be done just as easily as you acquired it.
Rents are high in NYC. New York City is known for being an incredibly expensive city. Many renters spend more than 50% of their income on housing costs. As such, combined with high property values, rents are high. This bodes well for apartment investors who are considering buying in the city to maximize their annual return.
New developments and resales to choose from. Whether you are looking for new developments in Manhattan or Brooklyn, or resale condos, you have many apartments from which you can select. Condos are investor-friendly for buyers and can easily be rented out. At Blooming Sky, our team works with investors to manage their investment properties and get them rented out immediately after purchase.
So is buying an apartment in NYC for you? If this is your first purchase in the city, we recommend reading our First Time Home Buyer Guide.
Reach out to us for a complimentary consultation and discuss your potential pursuit of New York City real estate.