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2:59 PM 04/30/2012
is it really
"Cheaper than a rent payment for a comparably sized residence" ??
This amount includes maintance and monthly taxes. The building borders Clinton Hill and Fort Greene. I was told of estimated savings after tax refund of around $190 a month. Is almost $1,900 a good deal for a studio less than 500spf?
hey, it really depends on the exact location. studios can be the most expensive thing per sq foot because the demand is high. this is possibly a crossroad for you. perhaps you should go a little further out and get something with more bang for the buck.
5:15 PM 04/30/2012 | 1 Votes
I don't know about this but IF you can I would buy at least a one bedroom. I bought a one bedroom 10 years and I am kicking myself that I didn't buy a 2 bedroom. Even if I sold I could not afford to buy a larger place in the neighborhood I live in now. Think long and hard about what your next 10 years look like. A studio might make sense to your life now but try to think ahead. Sorry just my two cents. Good luck.
6:24 PM 04/30/2012 | 1 Votes
I'm planning on keeping it even after I move out to a larger place I can always rent it out.
9:36 AM 05/01/2012 | 0 Votes
as to your first question, is it cheaper than rent, that depends on a lot of things, the first being your income, as the amount of tax savings you get from having mortgage interest and real estate taxes to pay depends on your income, not on owning v. renting. If your income, and thus your tax rate, is low, your savings are lower, because your taxes are lower. If your income is high, your savings are greater, to a point. in some years past, though not in the past few, and who knows about the future, you could not deduct it all anyway once your income rose to a certain point, your deduction was limited. and if you increase your income to a certain point to afford stuff, you can also get hit by the alternative minimum tax. both have happened to me. If you cannot figure out what your actual tax savings would be by yourself, talk to an accountant. secondly, you have to figure out what costs are locked in, and what might go up. I like a fixed rate mortgage, so I know that will not change. then look at the monthly charges and the reserve the building has, if any, and the condition of the building, to gauge whether your common charges may go up sharply, or whether you will get hit with assessments for building maintenance and improvements. get an inspection, and have your insepector inspec the entire building, including the roof and basement. also, look at the conditon of the apartment, whether you will want to do upgrades, which you would not do when renting. as to the cost of renting, you can usually assume that rent will always go up fairly steadily, but there are exceptions to this, like rent stabilized apartments, and brownstone apartments where your landlords are happy with you and hardly raise your rent at all, even while rents in your neighborhood are climbing sharply. that again depends on your individual rental situation. without knowing anything about the building you are considering, if it is new construction, or even a new conversion of an old building, you can assume that your costs will be much steeper than assumed, as the developer will usually leave some stuff unfinished, and have other construction work performed in a shoddy manner, so the condo owners will have to assess themseves to fix things, and raise the common charges to a more reasonable amount than that estimated by the developer in the offering plan. also check, if it has been built or converted in recent decades, if there is a property tax abatement that is going to expire sometime, causing your property taxes to rise very sharply. the best way to stay cheaper than rent is to buy a coop in a building in fairly good shape, without a lot of deferred maintenance, and with a hefty reserve fund. coops can get a mortgage to cover improvements if the board wants to, spreading out the costs over decades, keeping monthly charges lower and avoiding assessments, while condos cannot get a mortgage and owners have to pay for improvements right away through assessments. coops have the disadvantage of your not being able to sell to whomever you want, and not being able to rent out your place whenever you want. but this last is true of many condos, too. If a condo approaches having twenty five percent of the units rented out, the board may impose a limitation on renting, the reason being that once a certain percent are rented out, purchasers will have a very difficult time getting mortgages to purchase units. so having a condo with no rental policy where lots of owners rent may mean you can only sell to cash buyers when you want to sell it. also, if you may move on and plan to rent in the next few years, you have to carefully consider whether the mortgage and common charges and insurance and any assessments will come to more than the rent you are able to collect, that is, whether you will be breaking even on your investment, making a profit, or paying for someone to live in your place. you also have more costs with renters...you often have to paint and fix it up between tenants. this is an entirely different calculation from the one you are making now, as to whether it is cheaper for you to own than rent. mortgage interest is deductible on your home. there are different deductions for investment property...you need to ask an accountant about those. these are the variables...they vary in each individual situation, but there is a lot for you to consider. generally, it works better to be able to profit from renting your place if you have lived in it for a number of years first, with rents rising sharply while your costs...common charges, assessments, and property taxes...have remained fairly constant.
1:03 PM 05/01/2012 | 0 Votes