Home Buying in East Harlem>Question Details

dreamer, Home Buyer in East Harlem, New York,...

Will the value of lottery 1bd co-op in East Harlem rise? Is it safe to buy knowing that in15 yrs my retirement will not be enough to pay 800mtn &?

Asked by dreamer, East Harlem, New York, NY Mon Jul 4, 2011

mrtg buying vs.renting

Should I keep renting for $1000 vs. buying for 10-15years ($1900/month) in East Harlem? Is this a good investment or simply to expensive? Winning the lottery sounds great but aren't these co-ops' estimated values unrealistic?


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Katherine (Kate) Shindle’s answer
In your situation (and I am a HUGE advocate of buying vs. renting), be very careful.

Many HPD/HDFC lottery programs require their "winners" to pay back a substantial portion of their proceeds to the city upon resale. And remember that an apartment with an income cap can be more difficult to find a real buyer for.

That said, I myself live in an HPD building in East Harlem, so I've personally wagered on the future of the neighborhood. I believe it will turn out to be a good bet!

I've been searching the low end of the market (@ $1000/mo) for another customer. Let me know if you need help!

Douglas Elliman Real Estate
0 votes Thank Flag Link Mon Jan 7, 2013
Hi Dreamer,

Usually when apartments are sold by lottery they are sold by the city (HPD) through an affordable housing program. Much depends on the criteria of the lottery sale. It may be a limited equity coop. It sounds like the eligible lottery winners get units below market so the estimated value may be the current market value of non subsidized units.

Depending on your personal financial situation and plan for retirement you will need to determine perhaps with help from an accountant or financial planner. In 15 years the $1000/month rent you are currently paying will be increased. If you are currently in a rent regulated apartment you may have more protection and rights than a coop owner.

It depends on what you are comparing mortgage vs renting to. You need to evaluate the difference between owning the particular coop being sold through a lottery (why it is via lottery and possible restrictions) vs the apartment you are currently renting and determine which will be better for you financially and in 15 years.

The coop may be better a better investment in 10-15 years. The equity is good if you sell but if you are planning on retiring there the equity will be in the apartment so you will still need to pay the monthly payments from other sources. Another option for your retirement may be a reverse mortgage from the equity for your retirement.

Good luck!

Mitchell Hall, Associate Broker
The Corcoran Group
0 votes Thank Flag Link Tue Jul 5, 2011
Mitchell Hall, Real Estate Pro in New York, NY
Hi Dreamer. I like your name. Good question. First, I would like to say I'm not good at predicting, especially about the future. Manhattan is a stand alone model of supply and demand. Considering how the uptown communities have expanded and especially with the renaissance of Harlem, you may see reasonable appreciation over time.

I would suggest that renting improves the situation of your landlord. Owning improves your situation. Biggest single purchase...most likely. The big but is you'll build equity, gain appreciation (to what degree is another question). You'll also reap the benefit of the mortgage interest deduction and more. Please contact your Accountant regarding taxes as I am not an expert in that field. There are plenty of reasons to own.

Whatever you decide, I wish you all the best.
0 votes Thank Flag Link Mon Jul 4, 2011
It is hard to give a complete answer without seeing the property you are talking about. Don't forget you will also get that tax break on your investment as opposed to zero just renting with no tax breaks. Over the next 10 years your equity will also have increased.
0 votes Thank Flag Link Mon Jul 4, 2011
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