As my colleagues mentioned all coops are different. Some allow parents purchasing for adult child and some only allow co-purchasing. Usually they will want your daughter to be able to cover maintenance and/or mortgage payments if there is a mortgage. The rule of thumb is that her housing payments should not be more than 25% of her monthly income.
I recently found a "sponsor" coop apartment on the Upper West Side for parents in Ohio that bought the apartment for their son with a limited income. A sponsor apartment is "unsold shares" in a coop it is not a resale. There is no board approval or application in a "sponsor sale."
If you want less rules and minimum financial scrutiny a condo is ideal but costs more than coops. A sponsor coop sale will have little or no financial disclosure required but once the shares are transferred to either you or your daughter the coop rules such as sublet and pet policy will apply to your daughter.
An experienced local broker can help you find the right apartment for your daughter and manage the transaction for you and your daughter all the way through to the closing.
Mitchell Hall, Associate Broker
The Corcoran Group
Parents can buy for an adult child however, not all coops allow that. Each coop has their own set of rules and bylaws. Generally you will have to put down a minimum of 25% in a coop and in some a lot more. Subletting rules again depend on the individual coop. Some wonâ€™t allow any subletting at all and some will allow subletting for a certain period â€“ 2 years after living in the apartment â€“ but only for that two year period. This is just an example. However coop rules are getting stricter.
Maintenance covers real estate taxes, water, sewer and fuel charges. In some rare instances electric may be included in the maintenance. For the most part you would pay for your own electric and/or gas and your own cable which you need in Manhattan. Tax deductibility again depends on the coop.
With all of the complications of purchasing a coop for your specific needs, why not consider purchasing a condo or a condop where rules are more lenient?
It's best to consult with a good broker who knows coops, condops and condos in Manhattan.
Licensed Real Estate Salesperson
Member of Real Estate Board of New York
Halstead Property, LLC
770 Lexington Avenue, 10th Floor
New York, NY 10065
Your questions are excellent. It makes absolute perfect sense that it is a smart move to buy an apt. rather than throw that rent money away on a place for your daughter to live.
You are right that there are lots of rules and regulations, etc. on co-ops, though if you work with an experienced agent, we can easily navigate you through it and explain everything. Most co-ops do expect that the unit be owner-occupied ,and with you the purchaser, that would not be the case. However, there are some less strict co-ops that are what we call "kiddie co-ops" because they allow parents buying for children. You wouldn't easily know this on your own, but an experienced agent usually knows where these are, or knows how to find out. Several immediately come to mind. Even some of those, however, require the child to be able to afford the mortgage and maintenance going forward - i.e. that she be working and not a student. I don't know if your daughter is a student or working. I would say in your situation a condo is a much better option, because the owner-occupancy rule does not apply, and if your daughter ends up staying only the year or so you mention and doesn't settle here, you will have the ability to rent it out. What if she were to get a job offer where she had to relocate? Co-ops are strict about subletting. Condos give you that option.
Halstead Property, LLC
http://jenetlevy.halstead.com for all NYC listings
The first question you would need to answer in this struggle is, If I were to take this leap, how could I minimize the risk of owning a second home when it comes to the tax implication associated with it. You really need to go over this question with your Tax adviser. Sure the basic answers are simple. Assets depreciate. Cost of living rises. Not knowing your tax basis puts everyone at odds!
If you are willing to undergo the transaction costs of ownership here in NYC. You might best be served looking into Multi family dwelling rather then a condo. If that transaction is beyond your means then a Condo with Tax abatement might serve as a safe thought. It is quite clear here in NYC that rental rates increase on average of 3% Year over year. Answer: have some one look into the ROI of a small income producing property based on a location that meets your Daughter's needs for community, safety, and that answer will come to light! I recently placed someone into such a property only after 6 months of research.
Co-ops are like people - each one is different! There is no general rule of thumb that applies accross the board to all of them as far as subletting or in terms of parents buying for their children.
Co-ops charge maintenance which usually includes real estate taxes, fuel as well as water & sewer. Additional expenses would be electricity, phone & cable along with mortgage payments. The portion of the maintainence that goes towards paying for the underlying mortgage of the co-op is expressed as a percentage value of the monthly expense and is tax deductable.
Your best bet would be to speak to a few real estate agents and deal with one that you feel most comfortable with. The purchase price net cost analysis can be explained by most of the better agents.
Call or email me if you wish to discuss further.
City Connections Realty Inc.
Subletting will also depend on the buildings rules that vary case to case.
Maintenance generally includes all the stuff you mentioned.
Jennifer A. Chiongbian
SVP/ Associate Broker
Rutenberg Realty NYC
Call me to discuss 9am - Midnight 7 days a week. 212.866.8717 cell
I recently sold a studio on the upper east side and the total cash out of pocket after 20% down was about $1,600. Not a large studio but a clean part time doorman building.
Arthur â€œUngieâ€ Golden | Licensed Real Estate Associate| REBNY Member
Prudential Douglas Elliman | 1995 Broadway, 4th Fl | New York, NY 10023
C: 212.866.8717| P: 212.712.6078| F: 646.497.5476 | E: firstname.lastname@example.org
All COOPS are different with their own rules. There are coops out there that do allow "parents to co-purchase." Even if you are the one with money, all must be involved. Coops can be very tough and turn you down from moving forward. It's complicated but very doable. However, I would recommend for you to give me a call at (646) 221-8321 so I can tell you what to expect and what a coop will look for financially. My number is (646) 221-8321.
Nick Rafello, V.P.
The Corcoran Group
(212) 444-7852 office
(646) 221-8321 cell