Join Australia's most dynamic and respected property investment community

Has anyone bought a property in New York City?

Discussion in 'General Property Chat' started by bythebay, 8th Jun, 2016.

  1. bythebay

    bythebay Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    160
    Location:
    By the bay
    Hi guys

    Just wondering if anyone here would be prepared to share their buying experience in NYC?

    Did you engage BA or did you do it yourself?

    I assume most of the stock is for apartments with or without amenities (eg: 24hr security, swimming pool, gym etc), do their apartments have strata levies similar to Australia?

    Some suburbs have "townhomes". Are they like duplexes (no strata) or townhouses (strata)?

    There are some "condos" on the market, is that freehold or is it like buying a share in a company title?

    What was the process like?

    Did you have to get clearance as a foreign buyer first?

    Did you buy cash or did you take out a loan?

    If you took out a loan did you get the loan from Australian bank or American bank?

    Are there duties at the State and Federal level that need to be paid?

    Are you living in it now or have you rented it out? If rented, how's the yield and do you have to lodge tax returns in the US because you're deriving income?

    Thank you all in advance.
     
  2. Beano

    Beano Well-Known Member

    Joined:
    7th Apr, 2016
    Posts:
    399
    Location:
    Brisbane
    +1
    I am keen too
    Not to rent but live part of the year in NYC
     
    Paterson00 likes this.
  3. Mumbai

    Mumbai Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    763
    Location:
    Sydney
  4. MTR

    MTR Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    7,285
    Location:
    Perth, Melbourne, USA
    No, however many investors got burnt buying in Rochester NY, very rough area. Heard similar to Detroit?

    I assume the better areas in NY won't be cheap real estate and won't be cash flow positive from day 1
     
    SOULFLY3 and Taku Ekanayake like this.
  5. albanga

    albanga Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    1,105
    Location:
    Melbourne
    Yeah I'm happy to share my experience.
    I was looking at a number of penthouse apartments in Manhattan specifically focused on the upper east side with panoramic views of Central Park.
    I engaged a broker called Frederick who Luckily for me was throwing an extravegent party at that time at the perfect spot. I made a lowball offer in which he went back to the developer, this back and forth continued for ages (well 45 minutes condensed) and finally I purchased it. The broker went "weeeeeee" kicked his legs like an idiot and that was it.
     
    Braz, charttv, Excalibur1 and 15 others like this.
  6. Cactus

    Cactus Well-Known Member

    Joined:
    18th Jan, 2016
    Posts:
    978
    Location:
    Melbourne
    OMG that's totes my experience too.



     
  7. Casteller

    Casteller Well-Known Member

    Joined:
    30th Jun, 2015
    Posts:
    344
    Location:
    Barcelona
    I looked into it when I lived nearby. The market was quite strange, lots of rules, taxes, very high community fees, collective/common titles. Many places cannot be rented out, owners only. Real estate agent quoted me 20% management fee. Too weird, put me off.
     
  8. melbournian

    melbournian Well-Known Member

    Joined:
    2nd Sep, 2015
    Posts:
    1,311
    Location:
    melbourne
    Which episode was that on mdlny?
     
  9. Natedog

    Natedog Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    273
    Location:
    Melbourne
    It's still my favourite weekly TV show
     
  10. Ouga

    Ouga Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    372
    Location:
    "Trying is the first step towards failure" Homer
    Too hard basket?
     
  11. Dean Collins

    Dean Collins Well-Known Member

    Joined:
    21st Feb, 2016
    Posts:
    217
    Location:
    New York
    yep, I live in Brooklyn heights. what would you like to know?

    my advice is....don't do it.

    Yields are better in Australia, mainly due to city taxes (eg council fees).

    For example our co-operative (coop) has 6 apartments, about 400sqm for the whole building so small (it used to be 8 apartments but we bought and combined 3).

    The budget to run this building is $60k pa.

    About $30k of that goes to the city in taxes.......and its not going down each year continuing to go up.

    The yield you can get after these monthly payments are made to the coop is really low. this said....capital growth is high - NY has really picked up in the last few years.


    BTW there are two types of properties in NY,

    Coops like mine and Condos.

    The differences are mainly tax related but basically Coops can have an underlying mortgage on the land, Condos cant.

    Coops can also have rules around who you can sell to eg;
    no investors
    not mortgages bigger than 80% (some coops are even all cash...eg no mortgages at all)
    no mortgages bigger than 30% totally income
    no pets
    no noises after 12
    no parties
    no fun etc etc

    Lol generally coops you "submit your financials" eg tax returns employment history etc.... and then if they like you they arrange to meet with the "coop board" who then interview you and then IF they say yes the sale can go ahead.

    Everything they say about NYC coop boards are true......its total BS

    This said only about 50% of the apartments in NYC are coop......so lots of condos investors can buy.

    Well I think that's about it, if you need to know anything else feel free to ask.

    BTW the best website for you to check out NYC property on is www.StreetEasy.com
     
    bythebay and SOULFLY3 like this.
  12. Dean Collins

    Dean Collins Well-Known Member

    Joined:
    21st Feb, 2016
    Posts:
    217
    Location:
    New York
    BTW

    No to clearance - they don't have that.

    You don't 'have' to borrow from American bank but would be crazy town not to eg currency exposure.

    Yes as you are deriving income in the USA you would need to file USA taxes.

    BTW if you want exposure to usa property because you think that somehow the capital returns on usa property is going to do better then google Steve McKnight and his Australian USA REIT (over at propertyinvesting.com.au) but my warning is that's mainly a $A exposure play....and I think it might be pushing it up hill for the next few years.
     
    bythebay likes this.
  13. Plutus

    Plutus Well-Known Member

    Joined:
    30th Jul, 2015
    Posts:
    267
    Location:
    The North
    New york City is a very big place, while it looks condensed on a map, a few blocks can have an amazing difference on price & you can't really trust real estate agents on it (if you listen to NY Real Estate Agents, the entire of Brooklyn is Williamsburg or Williamsburg adjacent.. because that's a really popular neighbourhood at the moment). Pick a specific boroughs and start learning as much as you can about it, also keep in mind their tenancy rules are VERY different.

    Honestly I don't know why you would want to bother unless you're already living there. Loans + tax will be a pain in the ass from abroad.

    If you're going to live there, pick a neighbourhood and rent for 12 months before you're buying.

    If you just want to holiday there, just invest the $$ domestically and use the profit to fund your vacation.

    For what its worth, I too entertain fantasies of relocating to Manhattan, but its not really feasible for me (yet).
     
    Paterson00 likes this.
  14. JDP1

    JDP1 Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    2,838
    Location:
    Brisbane
    NYC has had its growth in the short term- almost all tier 1 cities have. Log term holds - yes- NYC is the big gorilla and will return in 20 years+...i mean, yes, it will retuen cg etc before that time, but significant capital appreciation compared to intitial purchase price will be the highest in the long term.
    Location is paramount there. If there is one single thing that will affect the CG more than anything else, it will be the location.
    But then, as others have said, ...so will most places in australia.
     
  15. sanj

    sanj Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,138
    Location:
    Perth
    This is one of my favourite nyc property stories, accidental multi millionaire. New Yorker sells house he bought for $102,000 for $55 MILLION

    I guess a fair few people made ridiculous gains with gentrification in NYC, eg imagine buying a building in meatpacking districti in the 80s when nyc was in a rut and population was declining. Or east villae even in the 90s vs now, rents on shops etc are astronomical now
     
  16. Plutus

    Plutus Well-Known Member

    Joined:
    30th Jul, 2015
    Posts:
    267
    Location:
    The North
    @sanj its a very impressive price jump, but I wonder how many million they've spent on 40 years of Manhattan property taxes (at MINIMUM I believe 15/16 property tax rates are now 10.656% of market value, worst case 19.554% Property Tax Rates)

    Also, maintenance on a 6 storey building for half a century isn't cheap.

    I'm sure they still made a fortune. One of the most high value real estate areas in the world & they owned an entire building for nearly half a century.. Sure fire winner.
     
  17. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    2,917
    Location:
    Brisbane
    I love that building and what an amazing place to live (now... not when they were first there and it was a sleazy area).

    I'm guessing that whilst two thirds of it has been used as gallery space, they would be able to offset some of the expense against their income? And I wonder if that is the case, whether (like here) they would pay a proportion of their profit as tax.

    For those who know the rules about such things in NY, it would be interesting to compare how such a situation in Sydney would compare to this building in NY (claiming it as "office space", paying some tax on that portion that isn't residential etc).
     
  18. Dean Collins

    Dean Collins Well-Known Member

    Joined:
    21st Feb, 2016
    Posts:
    217
    Location:
    New York

    Keep imind that even though the place was 6 floors...most of it was unheated and they only actually lived in one floor, eg....it was a wreck for years and they purposely didn't keep it updated/habitable in order to escape taxes.

    NY real estate is weird....its the same reason why you find prime locations being kept as empty lots with asphalt covering being used as 20 or 30 slot car parks.....basically they are keeping minimal taxes while "land banking".

    NY is basically a third world city.....anyone who tries to tell you otherwise hasn't lived here long enough to know the difference.

    This said....yes it must be nice to buy a place for $15m in cash.....and still be $40m ahead :)
    http://www.nytimes.com/2015/06/21/realestate/15-5-million-arecord-for-brooklyn-real-estate.html?_r=0

    (eg the new place he bought is about 6 blocks from my place.......though I have a feeling they overpaid by about 30% but without finished interior photos its hard to tell).
     
  19. hash_investor

    hash_investor Well-Known Member

    Joined:
    11th Oct, 2015
    Posts:
    912
    Location:
    Sydney / Canberra
    Care to elaborate? I have driven around the Queens area and agree that its streets and markets are exactly like maxico or columbia and think Brooklyn would not be too different... but Manhattan look good
     
  20. Dean Collins

    Dean Collins Well-Known Member

    Joined:
    21st Feb, 2016
    Posts:
    217
    Location:
    New York
    Easy answer......catch a subway and look up at the roof on any of the stations......

    It still makes me laugh every time I see a messed up curb with stagnant water that the pitch wasn't done correctly and water is pooling there that the romans managed to work out plumbing 2,000 years ago.....city workers in NY....not so much :)

    Don't get me wrong there are a million things I love about living here......but anyone trying to tell me this is first world is clueless (it mainly comes down to refusal to spend on infrastructure because we are spending too much on taxes bombing the crap out of rocks in the middle east because our fake friend is different to their fake friend.....but that discussion is for another place and time).