370 Central Park west-CPW’s best kept secret?

If you are thinking of buying on Manhattan’s upper west side, maybe you should take a look at 370 Central Park west. The 6 story co-op at the corner of West 97th street and Central Park west is a small building with a lot to offer. 370 CPW has a  great staff, is pet friendly, well managed and has an interior garden for residents. The building is full of charm and some of the apartments have wonderful details like moldings, casement windows, and even fireplaces.

Unfortunately, the only availability in this boutique building with just over 70 residences is a rental for $5700 per month. Having been in several of the apartments, I would recommend to get something on the sixth floor if possible because of the high ceilings or an apartment with a view of the park. Those do not come up that often so if it does, get ready to pounce on it!

 

Thinking of selling your Manhattan apartment? Staging 101

If you are selling your Manhattan apartment does it make sense to stage it? In many cases, the short answer is yes. Staging can really help buyers to visualize the apartment and see themselves in it. I have shown many Manhattan properties when parties have really admire a good staging. Not that long ago, I was selling a loft apartment on Manhattan’s upper west side at 370 Central Park west. Since it was one big room, and empty, it was wise of the owner to go ahead and stage it. The company did such a good job that everyone that saw it, loved it. The staging in this case clearly defined the living, dining and sleeping areas. Below is a video of that property.

 

Another benefit of staging a home is that minor imperfections will not pop out as much as they would in a vacant apartment. Every apartment has some minor perfections even new construction. But when the apartment is empty, those items can really stand out.
For sellers that might not want to shell out $10k-$30k on professional staging, your agent can have the property virtually staged for around $100 per room which normally would be the agent’s cost.

303 West 137 street Harlem building being renovated

ICER, a landlord and investor in the Harlem market, is gutting and expanding the former SRO buildings at 303 and 305 West 137th street. In total, the buildings will rise 6 stories and have 16 units over 16,000 sqft of interior space. The building is close to the corner of West 137th street and Frederick Douglass boulevard.

The view on West 137th street toward Edgecombe avenue

 

 

 

Church conversion site on Central Park west remains dormant

The Church site at West 96th street and Central Park west has remained dormant since the variance was denied so that it could add extra windows. They were seeking to convert this landmark church to condos after purchasing it in 2014 for $26 million.  Condos on Central Park west are a rarity and the success of 360 CPW points to this being a successful one if it ever happens.

 

 

952 Columbus avenue new condos update

The Ivy Park condo has 5 of the 8 apartments listed on streeteasy.com in contract. The new condo will have a total of 15 units and prices start just under $900k. Located at 107th street and Columbus avenue, Ivy Park will have a courtyard, roof deck and in unit washer/dryers. Prices are a blended $1337 per square foot. This pricing and mix of units is aimed directly at the affordable luxury market which is under supplied and as a result 5 units are in contract in less than 2 months on the market.

 

How much money did you need to buy your first Manhattan apartment?

Very often, I am asked by first time buyers what are the guidelines that banks use to determine how the bank determines how much they will lend. In generally, let’s take a look at a scenario where you are interested in buying a Manhattan condo for $1,000,000.

$1,000,000 purchase price
$200,000 down payment
$40,000 closing costs
?                   post closing reserves

In this scenario you need about $250,000 liquid plus post closing reserves which depend on the bank but let’s say 6 months of payments which can be in a 401k or non-liquid account.

In this case, your monthly mortgage is about $4,000 based on a 4.25 interest rate on a 30 year mortgage, add in about $1400 for common charges and taxes and you end up at $5,400. In order for the bank to make a loan you would need to have at least 2.5 to 3 times that in monthly income assuming little or no debt and very good credit. So you would need a minimum of $13,500 in monthly income or $162k annual. In many neighborhoods this will buy you a  1bedroom condo or even a  2 bedroom north of 110th street.

If you purchase a co-op, the co-op will require a minimum of 20% and in some cases more plus they will require 2 years of monthly payments in reserves so the cash outlay will be higher. So you may need close to $400k in assets to make the purchase. However, you will have a much larger choice of apartments with a co-op in this price range- 102 listings with at least 1 bedroom on the Upper west side under $1 million on the listing site streeteasy compared with 17 condos under $1 million. Co-ops are less expensive than condos but have more restrictions and higher monthly charges. More on that another time.

392 CPW apt 9B Lease signed

So much talk about this being the dead time of the year for rentals yet some well priced apartments do rent. A 1 bedroom apartment with an 18′ foot south facing terrace in a full service building with gym, laundry, 24 hour attended lobby and many other amenities was rented for $3,200. Priced below the market to garner a quick rental, it lasted less than 6 weeks on the market even though it listed for rent during the holiday time.

What should foreign investors look for in Manhattan property? Tip 2

As a foreign investor looking for a Manhattan property to purchase and rent out, you need to find an international tax consultant who can help you navigate the complicated tax code here in the United States.

Here is a crash course but please consult an accountant or your attorney before making any purchase. Let’s say you buy an investment apartment for $2.75 million and you collect $9,000 per month in rent with $3,000 in condo charges including your common charges and taxes.

$2,750,000 Purchase

$9,000 per month income
$3,000 per month building charges
$6,000 profit per month or $72,000 per year

So you make $72,000 per year in profit and have to pay US taxes on that correct? Not so fast. In the US, you are required to take something called depreciation on your property which is based on 27.5 years. So the apt cost $2.75 million and you depreciate $100k each year. ($2,750,000 divided by 27.5 years is $100k)
So guess what? The $100k in depreciation wipes out the $72,000 gain from rental income and you do not owe anything in taxes here in the US. What’s the catch?

The catch is that when you sell in 10 years, your original cost was $2.75 million but in 10 years you depreciated the property a total of $1,000,000 so as a result your cost is actually only $1,750,000 not $2,750,000. So any amount above that will be taxable. End of the story? Not quite. Most investors who sell a property like this purchase another one and through a vehicle called 1031 exchange you can rollover(defer) the taxes to the next property!

So please make sure if you are purchasing an investment property in Manhattan as a foreign national, you find an experienced international tax consultant who can help you to minimize your tax liability. Usually, an experienced real estate broker can recommend someone to you.