considering buying a Manhattan apartment for investment

Asked by Aussie in Singapore, New York, NY Tue May 20, 2008

I understand that in general, co-ops can't be rented out. However, does that still apply if I buy the co-op outright with cash? Or do I have to buy a condo regardless?

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4
Ricardo Mello, Agent, New York, NY
Mon Dec 5, 2011
Hello Mr Aussie,

Our website has a great Foreign Buyers Guide. The link below will take you to the guide.

Kind Regards,

Ricardo

Manhattan Miami Real Estate
1 vote
Marco Gomez &…, Agent, Jackson Heights, NY
Fri Dec 9, 2011
The short answer is yes, you will have to go the condo ref. When you're purchasing in Manhattan especially the boards are very strict and nowadays most lenders are not lending to buyers purchasing a building with a high percentage of renters, therefore a lot of co-op boards and change their policy to eliminate subletting or limited to existing sublet hockey. In order to avoid any problems in the future I would just go the condo rent. Good luck!

Marco Gomez
NY state Associate Broker
Keller Williams Landmark II
Marco.gomez@gmail.com
0 votes
Casey Holland, , 10012
Wed May 21, 2008
You are partly correct. A small percentage of coops cannot ever be rented out. These tend to be found, but not exclusively on the Upper East Side here in Manhattan. The typical coop does allow very limited subletting. The usual policy (but not standard) is that you must own and reside in your unit for at least 1-2 years. After owning and residing at least part time for a couple of years, some coops will allow you to sublet for a 1-3 year period, typically. Some coops are more liberal and have an unlimited sublet policy after owning for a period of time. Purchasing with cash does not change this fact. There are also "condops" which will condo subletting rules (very liberal, few restrictions at all) but the purchasing procedure of a coop. You should also be aware that with a coop sublet, your prospective will be required to interview with the coop board and be approved as a tenant based on his/her financial outlook, personality traits, and just about anything the coop decides is important to their coop community. Some coops are very particular and a pain in the neck with subtenant selection.

As a foreign investor you should also know that almost 100% (but not all) coops will require their owners to have an established credit history in the United States. They will also require you to have between 3 months and 3 years of mortgage (if you carry one) and monthly maintenance fees in liquid cash in US banks after closing.

Purchasing a condo as an investment is the BEST bet in Manhattan. For starters, a condo is real property, as in you own your apartment. A coop is owning shares in a corporation. You don't have the same strict financial requirements (especially if paying cash) and your subletting policies are VERY liberal and allow for many creative and cash generating possibilities for the unit when you are not occupying it yourself. (i.e. you may sublet immediately!) If you click on my profile icon and read my answered messages, you can see some of the options that I have presented my foreign investors with and that they used to maximise financial gains.

If you have more questions or would like to speak at length as this is very complex process your first time, my business partner and I would be happy to help.

casey.holland@sothebysrealty.com
0 votes
Frank Diaz, Agent, Honolulu, HI
Wed May 21, 2008
Talkto a CPR or real estate attorney first. If you are not a citizen, there will be large tax implications. I'm not saing it's not a good idea, especially with the exchange rates. You just have to take that into account.
I have a lot of buyers looking for property now from Europe, Canada, New Zealand and Australia.
0 votes
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