Thanks for your thoughtful response!Date: 4/14/2007 9:34:41 AM
Author: dtnyc
Harriet-
Haven''t been in the same position but I know there are 2 things to consider here:
1) the overall construction quality of the building- how old is the building you live in?
Sometimes rental properties are not built w/ the same quality and care as buildings that start out as co-ops or condos. Of course this depends on the age of the property and I think is much more of an issue w/ buildings that were built in 1970''s (energy crisis) through today. Like much of this equation- the fact that you are in Manhattan makes a tremendous difference w/ regards to the construction quality, age of the building etc.
2) cost-benefit- many times renters get ''sponsored-units'' where as a renter you get a great deal and get first crack at the building before it''s available to the public. I know that the last few years in NYC have been crazy and buildings were selling out before they were even built (before they were even holes in the ground) but I know for high level luxury buildings the frenzy has temporarily subsided. Have you looked at what condos that are comprarable to your rental are going for? Would you want to buy the unit you are living in now or would you want to move w/i the building to a larger or smaller unit?
Lots to think about here- but it could be a great opportunity for you!
Date: 4/14/2007 10:55:01 AM
Author: Harriet
Date: 4/14/2007 9:34:41 AM
1. Our building is slightly more than 10 years old. The construction is solid. E.g. you can''t hear the neighbours at all. It''s 300 East 64th. Do you know it?
2. We have been offered 10% of the market price as well as a 5% instead of a 10% downpayment. I most certainly want to buy our current unit -- it''s the perfect size and layout, has 3 exposures (including of the river), and is on the 27th floor. Also, there are only 3 units on our floor. In fact, we recently moved from another unit within the building.
The other half wants to hold out because he believes that we''ll be able to afford something fancier in a few years time. But, I''m thinking of the here and now.
I don''t know your building off hand- is there any retail/office space on the first floor?
Having retail on the street level can be great- it can really help offset the mtc. costs of a building.
That is great that you are happy w/ the construction, your unit, you would get a good deal, etc. It sounds like a no brainer.
Even though the market isn''t as nuts as it was 2 years ago, you can''t go wrong buying in Manhattan- especially that location! In a few years that unit will w/ almost absolutely certainly go up in value and then you will have equity to buy an even nicer place, etc. It would be a great investment that you could live in, and you would avoid moving.
I have a friend who bought a studio on the UES (just above 86th St) in ''99 for under 100K just after we graduated from college- her place has tripled in value since she bought it. She was able to refinance her mortgage from a 30 to a 15 yr, borrow against the equity to take 18 months and get a masters in Paris, etc. It was a phenomenal move on her part and I kick myself for not buying a place between 99 and 2001 (in NYC or otherwise.)
Also unless you are very, very diligent I think it''s hard to save up in NYC over a long period of time, there is so much temptation! With the overall discount on your unit as well as the downpayment deal the barriers for home ownership are probably as low as they will ever be for that location.
good luck!
Exactly again. Unfortunately, he has an irrational fear of defaulting on the mortgage -- he's in the invetment business and they are short on a number of mortgage companies. Luckily, my salary alone can cover the payments and my job is stable. Oh, and I'm a stubborn one too!Date: 4/14/2007 11:54:20 AM
Author: diamondfan
No man is that stubborn...not when you have be unwell and you are happy where you are. Plus he will likely SAVE in the meantime and maybe even make out well when you sell THIS one later on. He could say wait and then you cannot afford anything that appeals to you. Real Estate is hard to gauge that way. In three years you could be priced out of what you would want. A bird in the hand as they say...
Hi! Thanks for chiming in.Date: 4/14/2007 12:20:33 PM
Author: starryeyed
Hi Harriet. I have little more to add, other than to reinforce what dtnyc and DF have already said. They''ve given you great advice!
I''m guessing the most important thing about this is determining ''market value''. 10% off market price is great, as long as the ''market value'' is fair and accurate.
I can understand your DF''s fear of going into debt - it''s scary for sure. I think the government recommends that your housing costs not exceed 1/3 of your income. This is a useful rule-of-thumb, although I could see the number being a little higher in NYC. If you see yourself staying in NYC for the next 3-5 years, buying something and getting the mortgage deduction makes a lot of sense.
I can understand an investment company being short on the weaker/less diversified mortgage companies, but this is hardly a reflection of the entire industry or whether or not you should buy a condo. I don''t think you can lose in NYC.
The most important thing here is, can you stand the impact of a 5% down payment on your jewelry acquisitions and travel plans??You''ve already said that you have a nest egg, so I''m guessing the impact will be minimal.
Date: 4/14/2007 11:54:20 AM
Author: diamondfan He could say wait and then you cannot afford anything that appeals to you. Real Estate is hard to gauge that way. In three years you could be priced out of what you would want. A bird in the hand as they say...
Heh, heh, that makes no sense. Maybe some other fear is in his mind. Being short a subprime lender does not have the least to do with your situation. Kind of like being short a food company and deciding you will no longer eat.Date: 4/14/2007 12:01:34 PM
Author: Harriet
Exactly again. Unfortunately, he has an irrational fear of defaulting on the mortgage -- he''s in the invetment business and they are short on a number of mortgage companies. Luckily, my salary alone can cover the payments and my job is stable. Oh, and I''m a stubborn one too!Date: 4/14/2007 11:54:20 AM
Author: diamondfan
No man is that stubborn...not when you have be unwell and you are happy where you are. Plus he will likely SAVE in the meantime and maybe even make out well when you sell THIS one later on. He could say wait and then you cannot afford anything that appeals to you. Real Estate is hard to gauge that way. In three years you could be priced out of what you would want. A bird in the hand as they say...
I agreement hereDate: 4/14/2007 11:31:59 AM
Author: diamondfan
If you love it and are there and it suits you I would worry about a few years from now in a few years. You love it, and are settled, and who knows what three years or so will bring? You might have kids by then and your needs would be different, but if the unit, building and location are great it should sell easily when and if you are ready. Personally, I would rather buy, at a good deal, get the deduction, and worry about later later, rather than rent, worry about looking for a new place and moving, especially if I just moved within the building, I have been ill and I am planning a wedding.
Good one, Beacon. Hehe.Date: 4/14/2007 12:55:07 PM
Author: Beacon
Heh, heh, that makes no sense. Maybe some other fear is in his mind. Being short a subprime lender does not have the least to do with your situation. Kind of like being short a food company and deciding you will no longer eat.
But he may be concerned about some glut of defaulted properties hitting the market, which could be a semi realistic fear. However, that location is a good one, my old neighborhood, (I was at York Ave and 63rd St). If you have a few years to wait out any supply issues, you should be ok.
I would inquire what the projected maintenance/HOA will be. And count on it rising substantially. Sounds like your income is fine for servicing the debt.
Hi Zoe,Date: 4/14/2007 4:29:42 PM
Author: zoebartlett
Hi Harriet,
I think that if you love where you are and are willing to stay there for a few years, why not buy your place now? Obviously, this is if finances allow...
On a random note, I have always lived in small town America. I am somewhat fascinated by how people live in big cities like New York. I mean, where do you go for groceries, etc.? I know that sounds silly. Also, not having a car would be something to get used to, I''m assuming. I think it''s such a wonderful thing to do if you''re so inclined. My boyfriend would love to live in a big city someday, but I''d need some prodding.
Zoe
You are too cute! LOL!Date: 4/14/2007 5:55:30 PM
Author: Harriet
Obediently going...