Home Buying in 10011>Question Details

Walmsley, Renter in San Francisco, CA

How long do you need to stay in an apt in NY to cover transaction costs?

Asked by Walmsley, San Francisco, CA Thu Sep 13, 2012

Thinking about buying, but will inevitably have to move within 5 years to a bigger place and wondering how many years one has to stay in an apt to see price appreciation that covers transaction costs?

Help the community by answering this question:


I have in the past (particularly in the market we have experienced in recent years),counseled purchasers that they have a 5-7 year horizon,particularly if they feel it will be inevitable that within 5 years they will either sell to purchase something larger or relocate out of the area.

If you're looking to buy in 10011 zip code- a generic (VERY ) overview of most recent data I've seen (year over year) is showing an increase in the median price,and contracts,decreased average days on market and decrease in inventory as compared to August 2011.

It has been my experience in that area over values have held and appreciated.What you should also be looking at as well,is the rental market- in case you absolutely need to "step up" and purchase something larger and for some reason a sale is not happening as quickly as you might like.

What type of property,size and its relation to the broader overall market also matter. (If you would like more of a breakdown of a specific ,area and year over year comparisons,glad to provide ).

I have attached a link (if you haven't seen similar already) to a closing costs overview for both cooperatives and condos/townhouses.

Hope this makes sense- tried to keep it in "plain english" and not broker babble.
2 votes Thank Flag Link Thu Sep 13, 2012
Hi Walmsley!
Count how much money you lose by renting an apartment 5 years. The rent is going up every year, so all the many that you invest in your apartment is investment no wasted money. The closing cost are about 4%. Compare that to 60 month rent going up every year by 20%. The interest that you pay on your mortgage and the real estate tax are tax deductible. 85% of your mortgage is the interest in the first few years. If you put all this one the paper then you will be happy to buy.
5 years is enough time to invest in real estate and make money. Now is the good time to buy.
I hoe I helped you.
Good luck.
Veronika Baba Kian Relty NYC
1 vote Thank Flag Link Thu Sep 13, 2012
Try this calculator from The New York Times:
0 votes Thank Flag Link Sat Sep 15, 2012
5 years is a reasonable time frame, though there is no guarantee that market will be up when you will need to sell and you may have to rent out and wait for a better market. You need to also look at different issues, such as closing costs for coops and condo buildings, what areas you are looking to buy (for example, on the East Side values are expected to go up after the new subway line is completed, etc.). New construction or sponsor units can have large closing costs because the buyer has to pay transfer taxes, and to appreciate enough in value to recapture these costs, it may take a while. I have clients who know they need to move in 4-5 years and will either have to rent out or sell, and after looking into various pros and cons, have decided to go ahead with a purchase.

I would be glad to discuss and help you analyse, if it makes sence for you to buy in your current situation.

Elena Ravich
Rakita Realty
646 593 7207
0 votes Thank Flag Link Fri Sep 14, 2012
I think that any answer to that question is pure speculation. Don't see how anyone can answer that in truth!
0 votes Thank Flag Link Thu Sep 13, 2012
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