My wife and I are moving from Queens to NJ, and we are trying to sell our co-op, but even with taking a loss we're having a tough time. So we are thinking of renting it out for the time being (it's located in an area where renters are easy to come by), and then trying to sell it again somewhere down the road when hopefully the real estate market picks up again. I know someone who is willing to buy... [more]
My wife and I are moving from Queens to NJ, and we are trying to sell our co-op, but even with taking a loss we're having a tough time. So we are thinking of renting it out for the time being (it's located in an area where renters are easy to come by), and then trying to sell it again somewhere down the road when hopefully the real estate market picks up again. I know someone who is willing to buy 1/2 the co-op from me (at the reduced market rate), and then we'd co-own the apt and split all profit/costs - In fictitious numbers:
- Co-op cost $210K when bought 6 years ago.
- Worth now somewhere in the $190-$200K range, if I had a buyer.
- Friend willing to put down $97K for 1/2 the apt.
- Co-op allows indefinite rentals, as long as you pay them a $25/month fee
- Once friend would pay me the $97K, we would/could pay off the mortgage completely. The mortgage right now is at 5.875%, with $70K left on it.
- Friend has access right now to borrow up to the full amount of the apt. (let's say $200K) at a 2.8% rate, but it is a moving avg. rate.
- Maintenance (including all taxes and heat/water, basically everything but electric) is at $900/month, and we could rent out the apt. for $1700 month.
- I just put $2K into the apt to try to sell it with new paint job, blinds, tub reglazing, etc.
- We are moving to NJ, but I will continue to be working in NY. Friend still lives in NY.
Where we need some help is the tax implications in all of this - Basically, with the numbers given above, what would we have to report tax wise, would it be smarter to keep the apt in my name for all of this, etc. This is a person I 100% trust, and vice-versa.
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