The feeding frenzy and bidding wars remind me of the dot com boom of the 1990s. Ill informed Investors are gobbling up Real Estate without a clear view of the return on investment for a Condo that will be rented. Condo purchase have closing costs , carrying costs and selling costs and to make any meaningful profit it is possible only in the long haul. Add to the purchase price: CLOSING COSTS (5%)... [more]
The feeding frenzy and bidding wars remind me of the dot com boom of the 1990s. Ill informed Investors are gobbling up Real Estate without a clear view of the return on investment for a Condo that will be rented.
Condo purchase have closing costs , carrying costs and selling costs and to make any meaningful profit it is possible only in the long haul.
Add to the purchase price:
CLOSING COSTS (5%) including mortgage tax, Title, mansion tax and improvements)
CARRYING COSTS (@ rate of 2@ per year =12%) (Mortgage, Taxes, insurance, Common charges,commissions, maintenance)
SELLING COSTS (8%)brokers fee -6%, transfer tax 2%
TOTAL 25% in 5 years
With an anticipated 5% appreciation per year,Will you break even in 5 years, not quite add to the selling costs
CAPITAL GAINS TAX (20%of difference) and
INVESTMENT TAX (3.8%)
MORAL OF THE STORY Flipping in Manhattan is all but impossible.If you buy for investment it is for the long haul 10 + years.
[less]
Response by gothamsboro
almost 12 years ago
Posts: 536
Member since: Sep 2013
Another smarty-pants.
You start out writing about return on investment and the heated market - two different topics. Then your "moral" is about transaction costs making short term gains impossible.
What brings you back to SE for this incoherent rant?
Another smarty-pants.
You start out writing about return on investment and the heated market - two different topics. Then your "moral" is about transaction costs making short term gains impossible.
What brings you back to SE for this incoherent rant?