Can I buy second apt 2 years later and rent 1st?

Looked into this but have not done so am no authority: You can lock in primary residence terms on the first mortgage and then again on the second property. The rub becomes when the Bank analyzes your debt to income ratio and ability to service debt; they add both mortgages and compare against income. In other words, if you will be able to comfortably service both mortgages then you can probably get them. I think potato math approval ratios are no more than 3 times debt to income and mortgage P&I plus carrying charges should be no more than 30%-40% of after tax income.

That said, I think the approach is very smart. Conventional wisdom is stretch and buy big but think this approach is savvy as well for the reasons you pointed out (heavy transfer costs).

Totally based on the loan to value and if you could afford the mortgage payments to maintain the properties.

You should be buying a condo. Coops can be a problem renting and even if they allow now, that could change. Why take a chance.

Two co-op buildings I am very familiar with have recently tightened their sublet policies. I would absolutely not recommend buying into a co-op if you have any intention of using it as an investment property in the future. Stick with condos.

I echo all this advice. I advise investor clients to avoid co-ops altogether. It is not uncommon for a board to decide to make it almost impossible to rent a co-op. This can happen simply because they've already said "yes" to all the people they dare say yes to. The lender's OK alone would not be enough.

I would buy on the Upper East Side because in 2-5 years that area will be out of its Second Avenue Subway slump. The prices there are too low relative to fundamentals, and to other areas of Manhattan, in my humble opinion.

I thought you could add in rental income that you would get from the second property in order to finance the mortgage from the bank. Is this true?

I think you need a signed (arm's-length) lease in hand, not just intention to rent out.

Not so sure they count the rental income at 100%, either. Isn't it counted at 75%?

@Kangster70 that is true as long as you have rented for 2 years.
I had a condop and then bought a condo, renting the 1st property. I was advised that after renting the first for 2 years, that income would be considered for a new mortgage.