Added: Gaven Tillmon - Date: 17.02.2022 08:06 - Views: 33702 - Clicks: 8716
When you're looking for an apartment in NYC, where rents in Manhattan and Brooklyn have been going up all year, it's tempting to imagine those monthly payments being put to better use, like for a down payment. Rent-to-own scenarios have been pretty much unheard of in NYC, but that is changing with the launch of a new program that credits rental payments toward a purchase at One Manhattan Square, the story glass skyscraper on the Lower East Side.
The move by Extell, one of NYC's leading developers, was likely a result of NYC's oversupply of new luxury condos, where a glut has stalled the market. In a attempt to kickstart sales, Extell offered to pay several years of common charges. Extell's rent-to-own offering allows you to credit a year of rental payments towards a condo purchase if you buy within 12 months.
Find Your Next Home. Jeffery Reich, a real estate attorney with Schwartz, Sladkus, Reich, Greenberg, Atlassays it is more often something seen at the lower end of the market. However, Strelov points out these kinds of arrangements are complicated and there are lots of variables to think about when considering if this is a good deal for you. If the rent you are being offered is competitive for the neighborhood, then Strelov says renting with the option to buy will not hurt your wallet and gives you time in the building to see if you like living there.
Reich says he sees "no downsides" for a buyer. You get to test out the neighborhood, the building, the amenities. Strelov is more cautious, saying "if you are paying a little higher for the privilege of having the option, it may not be worth it currently with prices going sideways, if not going south. If you thought buying an apartment in New York City was complicated, negotiating a rent-to-own arrangement is even more so.
Your legal fees will likely be higher because you will be drafting an o ption agreement, a purchase agreement, and a rental agreement, Strelov says. Most likely, the rent will be applied to the closing costs and the purchase price. You are unlikely to be able to apply for a mortgage until you are ready to close on the condo purchase. If it's a question of buying now or renting first with the option to buy, there is always the "gamble" that mortgage rates might go up, Strelov says. If, however, you are not in a position to buy until you exercise your option, Reich says it's irrelevant to second guess mortgage rates or indeed purchase price.
Consider why the rent-to-own option is being offered in the first place. Is it because the sponsor is struggling to sell apartments?
If so, why? You'll want to do your due diligence on the building to make sure you are comfortable with any risks associated with the purchase. The sponsor may have a preferred lender who will be happy to finance your purchase but if you want to sell further down the line, say in a year or two, your buyer may need financing and a bank will look at the percentage of ownership in the building.
Reich says if he was advising a buyer he'd make sure the purchase price reflected some of the risks associated with buying into a building where the sponsor might continue to own the majority of the units for some time. Fulltext search. Order Asc. Moving to NYC after college? Here's how to do it Brick Underground's guide to co-living spaces in NYC: How to tell the communal disruptors apart The 7 best ways to find a short-term rental while you renovate your NYC apartment NYC apartment leases with major concessions are coming up for renewal. Here's how to negotiate 5 things you should know about renting month to month in NYC.
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Bedrooms studios or at least 1 bedroom at least 1 bedroom at least 2 bedrooms at least 3 bedrooms at least 4 bedrooms 5 or more bedrooms. Bathrooms at least 1 bathroom at least 1. Presented by. This new company co-funds the down payment on a condo or brownstone. Brick Underground articles occasionally include the expertise of, or information about, advertising partners when relevant to the story.
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The pros and cons of rent to own in NYC