I currently rent a small 1 bedroom in the East Village. Its a great deal - $1450/month, has an elevator, well maintained, etc. But the apartment is quite small. I'll be in a situation soon (I think) where I may be able to buy. But NYC real estate is a whole new world for me... Im looking at the East Village and Williamsburg. I generally like old places, but some of these tax abatement buildings in... [more]
I currently rent a small 1 bedroom in the East Village. Its a great deal - $1450/month, has an elevator, well maintained, etc. But the apartment is quite small.
I'll be in a situation soon (I think) where I may be able to buy. But NYC real estate is a whole new world for me...
Im looking at the East Village and Williamsburg. I generally like old places, but some of these tax abatement buildings in Williamsburg seem enticing.
Basically, I'm paying so little in rent right now, it seems silly to get some place, for 500k/600k or so, and still be spending $1000+/month on taxes and common charges... I know it'll be a bigger place but still....
Am I better off with new buildings on Willimsburg? Or old buildings in the East Village? I prefer old buildings, and you seem to get more space for your money, but the common charges seem so high sometimes!
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Response by mh330
over 14 years ago
Posts: 105
Member since: Oct 2006
Danny, you're not getting a response because the answer to your question is subjective and ultimately up to you.
However, a couple of things to consider:
- buying will likely NOT get you more space for the money, at least not in NYC
- common/carrying charges are higher in older buildings because older buildings don't have the tax break of a tax abatement that new developments have and because experienced boards know how much it costs to run their building. new developments will often understate the common charges, knowing that once the units are sold and the new board realizes there's not enough cash flow and they need to raise common charges, the seller will be long gone.
- older buildings are also more likely to be co-ops, which may have an underlying mortgage for the building (not just your unit) and so this raises the monthly charges (but usually 50% or so is tax deductible)
- keep in mind that tax abatements are benefits for sponsors, not buyers. Depending on the length of the abatement, this is essentially a ticking time bomb should you decide to sell. Think of it this way: you have a 15 yr tax abatement and decide to sell after 10 years... the person you're trying to sell it to is saying to themselves "my monthly cost is going to go up a bunch in 5 years!" and is not going to be willing to pay as much for the property.
-although you're lucky and paying very little now, there's more security (to me at least) of owning, knowing that my rent won't go up just because the neighborhood got "cool" or at the whim of a landlord. Of course, your monthly cost can always go up (from increasing taxes and common charges) so there's still risk.
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Response by NYRocks
over 14 years ago
Posts: 42
Member since: Jul 2011
mh330 gave a thoughtful, balanced answer with very good points. Nice.
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Response by danny_t
over 14 years ago
Posts: 2
Member since: Sep 2011
hey thanks for the comments! I appreciate it. Sorry if its subjective, just trying wrap my head around all this.
Danny, you're not getting a response because the answer to your question is subjective and ultimately up to you.
However, a couple of things to consider:
- buying will likely NOT get you more space for the money, at least not in NYC
- common/carrying charges are higher in older buildings because older buildings don't have the tax break of a tax abatement that new developments have and because experienced boards know how much it costs to run their building. new developments will often understate the common charges, knowing that once the units are sold and the new board realizes there's not enough cash flow and they need to raise common charges, the seller will be long gone.
- older buildings are also more likely to be co-ops, which may have an underlying mortgage for the building (not just your unit) and so this raises the monthly charges (but usually 50% or so is tax deductible)
- keep in mind that tax abatements are benefits for sponsors, not buyers. Depending on the length of the abatement, this is essentially a ticking time bomb should you decide to sell. Think of it this way: you have a 15 yr tax abatement and decide to sell after 10 years... the person you're trying to sell it to is saying to themselves "my monthly cost is going to go up a bunch in 5 years!" and is not going to be willing to pay as much for the property.
-although you're lucky and paying very little now, there's more security (to me at least) of owning, knowing that my rent won't go up just because the neighborhood got "cool" or at the whim of a landlord. Of course, your monthly cost can always go up (from increasing taxes and common charges) so there's still risk.
mh330 gave a thoughtful, balanced answer with very good points. Nice.
hey thanks for the comments! I appreciate it. Sorry if its subjective, just trying wrap my head around all this.