how much should a rental cost? the carrying cost?

what is the price/square foot for average luxury rental in manhattan in this market. i can figure what i want to pay and what i think i should have to pay...but where are luxury apts actually trading?

the owner's carrying costs are irelevant when determing the market value for a rental. If the owner makes money, then so be it. If the owner loses money, then so be it.

currently, rents are about 4% the purchase price. So $600 per SF means rent should be $15.

what is $15 ? shouldn't there be some kind of sqft multiple ?

If someone owns a second apartment to rent out only, what are the tax benefits? For example, do they still get a tax credit on the mortgage or is it less than if it was their primary home?

Thanks

just the primary home...you should be smarter than one who would ask a question like that.

>> you should be smarter than one who would ask a question like that.

??? I may be dumb as a rock or completely unable to google... why should I be smarter than to ask that question?

trevor, i don't think you're right.

Indeed. Trevor inspired me to google instead of relying on the wisdom of the anonymous SE posters.

Tax credits on rental properties are very alive and well. When calculating the owner's carrying cost for an apartment, you can use the net of taxes figure.

first rule of junior high, if you're going to be sarcastic, make sure you're right.

tax benefits of a rental -- you can deduct mortgage interest up to the first million, so if you have a primary residence with a $700K mortgage, the first $300K of mortgage on your rental property is still tax-advantaged.

in addition to mortgage interest, property taxes are deductible, and you can also claim depreciation on the property (though that reduces your cost basis for capital gains purposes).

ali r.
{downtown broker}

"right now...isn't it fair to just pay the carrying cost? you are floating the owner's investment. isn't that good enough?"

So if the guy bought it 25 years ago and his carrying is a maintenance of $500 a month, then "fair" would be for you to pay $500 rent?

" If the owner loses money, then so be it.the owner's carrying costs are irelevant when determing the market value for a rental. If the owner makes money, then so be it. If the owner loses money, then so be it."

Exactly.

Thanks Ali - very very helpful.

and 30yrs - I am not trying to ridiculously low-ball this owner, btw.