bodhipooh wrote:
Even if you are making 400K+ as a couple, things can be tight, even without anything going wrong. People look at salaries like 200K per person and think it is a lot, but it really isn't all that much. In between federal and state income taxes, plus labor taxes like SS and Medicare, you are likely paying out close to 40% your income.

SRhia wrote:
I understand prices can vary a lot depending on condition/size of the property. But I'm just trying to get a ball park so I know whether we can afford a brownstone on 1-income or 2-income. Sounds like it will most likely be a 2-income type of deal.

bodhipooh wrote:
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BobNesta wrote:
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Sutherland wrote:
While I tend to suspect that we're in a real estate bubble, I have to say, I feel extraordinarily lucky that I bought my brownstone when I did 13 years ago. I certainly couldn't afford it today.

But with regard to the state of real estate, I just don't know how many families or individuals could afford $1.5mm for a brownstone and then to gut renovate it for anywhere between $300k to $500k.

Couple each making $200K+ year...it's doable. Plenty of people in the NYC area make that kind of $.

Even if you are making 400K+ as a couple, things can be tight, even without anything going wrong. People look at salaries like 200K per person and think it is a lot, but it really isn't all that much. In between federal and state income taxes, plus labor taxes like SS and Medicare, you are likely paying out close to 40% your income. Take out things like medical insurance costs, and 401K plan contributions, and you soon find yourself bringing home less than half of your salary, maybe close to 40%. If someone is looking at a brownstone, and they carry an 1.2 MM mortgage (assuming 1.5 MM with a 20% down) you are looking at a monthly payment of about 6K. Add full tax, particularly if/when the reval finally takes place, and you are looking at 30K in property taxes (~2,500/month) plus the 6K monthly mortgage payment, and whatever other responsibilities, and you soon realize that even at 400K/year, a 1.5 MM brownstone could be a bit of a stretch.

As I've said before, I think a surer bet is a new construction condo with a nice tax abatement. Your taxes are a known amount, for whatever period of time, and you are much less likely to run into surprise repairs that will cost you a bundle.

third_street_hats wrote:
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jcwalkingman wrote:
Well, at least one new building downtown has upped the ante and is now advertising two free months' rent. New construction studios in an amenity-rich building for under $2k/month. And there are still about 2,500 more apartments coming on the market in the next 4 months. Folks, we may very well be entering the rental market implosion (which is already hitting real estate investors who own rental condos downtown).

Which building is this?

jcwalkingman wrote:
Well, at least one new building downtown has upped the ante and is now advertising two free months' rent. New construction studios in an amenity-rich building for under $2k/month. And there are still about 2,500 more apartments coming on the market in the next 4 months. Folks, we may very well be entering the rental market implosion (which is already hitting real estate investors who own rental condos downtown).

BobNesta wrote:
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Sutherland wrote:
While I tend to suspect that we're in a real estate bubble, I have to say, I feel extraordinarily lucky that I bought my brownstone when I did 13 years ago. I certainly couldn't afford it today.

But with regard to the state of real estate, I just don't know how many families or individuals could afford $1.5mm for a brownstone and then to gut renovate it for anywhere between $300k to $500k.

Couple each making $200K+ year...it's doable. Plenty of people in the NYC area make that kind of $.

SRhia wrote:
I understand prices can vary a lot depending on condition/size of the property. But I'm just trying to get a ball park so I know whether we can afford a brownstone on 1-income or 2-income. Sounds like it will most likely be a 2-income type of deal.

SRhia wrote:
For all your brownstones owners: in addition to property taxes, water/sewage, how much is the average cost per year for the following items for owning a brownstone?

- heating - I've seen numbers in the 3.5K - 4K per year?
- insurance - around 3K? Does this include flood insurance?
- average repair costs? Given brownstones are old buildings, how much should one budget for repairs every year (on average)?
- any other major expenses?

Just want to get an idea...

Sutherland wrote:
While I agree there are a substantial number of households with a combined family income of approximately $400,000. However, it's been my anecdotal observation that in most instances, it's one party earning the lion's share of that income, much of which is bonus or commission. If there's one little trip up, things could get a little tight.

But again, I'm thrilled the market is presently booming. Still, IMHO, we've had excessive development in JC, increasing density to excess.

BobNesta wrote:
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Sutherland wrote:
While I tend to suspect that we're in a real estate bubble, I have to say, I feel extraordinarily lucky that I bought my brownstone when I did 13 years ago. I certainly couldn't afford it today.

But with regard to the state of real estate, I just don't know how many families or individuals could afford $1.5mm for a brownstone and then to gut renovate it for anywhere between $300k to $500k.

Couple each making $200K+ year...it's doable. Plenty of people in the NYC area make that kind of $.

Sutherland wrote:
While I tend to suspect that we're in a real estate bubble, I have to say, I feel extraordinarily lucky that I bought my brownstone when I did 13 years ago. I certainly couldn't afford it today.

But with regard to the state of real estate, I just don't know how many families or individuals could afford $1.5mm for a brownstone and then to gut renovate it for anywhere between $300k to $500k.

jcguy05 wrote:
For the 5 years I rented out in a 15 year old higrise condo by the waterfront, my average total upkeep cost was less than $1000 a year. My math factored in 1 month of rent profit a year for upkeep cost.

jcguy05 wrote: Quote:

bodhipooh wrote: Quote:

landshark wrote: Quote:

SRhia wrote: Thank you @jcguy05 for the long reply! I'm curious though (and this is for all real estate investors): what is the advantage/disadvantage of cashing out? Assuming someone brought a property for investment (renting out) 5 years ago, and is currently breaking even (or making money) on rent. Why (or why not) would you cash out now? I can think of: Advantage: - cashing out to get cash on hand. - Cash can be available for next investment property when market crashes. Or cash available to make other investments (eg stocks, etc); - less to worry about (no tenants calling about problems!!!) Disadvantage (??? Or perhaps rather "reasons to keep it"???): - Tenant is already paying rent, so you're building equity. Why not keep it??? In 30 years (or length of mortgage), you'll own the property. And given it's a long time horizon, the property will appreciate in value by then anyway. - no need to go through the hassle of selling (probably not a legit reason So - did I miss something? Why are some others reasons to sell vs. keep an investment property knowing the market is going down? Trying to learn here (since looks like there're some pros here)

Disadvantage: Taxes, unless you can make a 1031 exchange work (which is not easy and you are then buying at the peak) you lose a good chunk of equity that is currently working for you.

THIS. By the time you factor out original closing costs, realtor fees, whatever other fees associated with selling, and all the federal real estate taxes, you may have VERY LITTLE to show for your investment unless the property has really appreciated A LOT. If you are talking about a 10% gain, you haven't made any money, really. True story: a friend of mine is about to clear 100K on an investment property (after owning it for 10 years) and his take on the whole experience is "NEVER AGAIN". Once you factor in all the associated costs and headaches from the past 10 years, along with costs I mentioned above, the "gain" is reduced to almost nothing. All these TV shows make it look like an easy thing to do, but the market can be tricky (and fickle) and unless you are flipping for huge immediate gain, your long term investment must really, really appreciate for it to be worthwhile or profitable.

You lose 10% the second you buy a property, like a new car. So yes need a lot more than 10%, the price appreciation in dtjc from low (2010) to the high (now) is 70-100%. The taxes are only on the net profit also, and for condos, there is not a lot you need to do or pay in term of upkeeps, it pretty much runs itself, especially in those waterfront highrises where you have quality tenants. So the numbers become easy to crunch: (price paid*1.1) / ((rent - condo fees - tax)*11). Usually anything <25 years is ok, provided the prices are reasonable (it is not right now). For multi-families, it's a lot more work and cost. But when i did the numbers you can get the return down to close to 15 years if you know what you doing in term of renovating old houses and all the **** that comes with - getting it certified, tenants, upkeep, etc.. It's more work for more reward, and you need to know a lot more.

hero69 wrote:
i saw went to an apt in brooklyn where occupants are paying ~$7,000 for a duplex that barely has a functional living room and two small bedrooms. one of the bedrooms can barely hold a full size bed. now that's insane...and the finishes looked furmulaic and cheap. and it was about 1 10-15 minute walk to the L train.

if jc real estate is in a bubble, what the heck is brooklyn in?

Wishful_Thinking wrote:
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You're the most bitter guy on JClist. Congrats.

Wait a minute! According to Dr. Bodhipooh, I'm the most bitter guy on JCList. I guess I have to up my game to hold on to my title...

bunny22 wrote:
An attached one-family with parking on Summit near Lincoln just sold for $550,00. It's renovated but only 2 bedrooms and 1 1/2 baths and the backyard is more like a small courtyard not particularly pretty. That seems like a lot to me. But it's cool because I've been waiting over 12 years for the Heights to take off (the Riverview area--now an arts district is where I've holed up waiting and waiting for gentrification...and waiting...

SRhia wrote:
Wow, who says there's no bubble here!!! Even the shell of a building - literally - is asking $900,000 in JC: 261 5th str.

Between this and the Gannon, I'm not sure who is more ridiculous.

SRhia wrote:
Wow, who says there's no bubble here!!! Even the shell of a building - literally - is asking $900,000 in JC: 261 5th str.

Between this and the Gannon, I'm not sure who is more ridiculous.

You're the most bitter guy on JClist. Congrats.

jcguy05 wrote:
I LOLed everytime i walk by the building or one of their signs. Lets see...low rise... with little amenities...not waterfront, or even a very well laid out area. Asking for how much?

But i bet they will manage to sell them to some fools at the price they are asking lol

SRhia wrote:
Thank you @jcguy05 for the long reply!

I'm curious though (and this is for all real estate investors): what is the advantage/disadvantage of cashing out? Assuming someone brought a property for investment (renting out) 5 years ago, and is currently breaking even (or making money) on rent. Why (or why not) would you cash out now? I can think of:

Advantage:
- cashing out to get cash on hand.
- Cash can be available for next investment property when market crashes. Or cash available to make other investments (eg stocks, etc);
- less to worry about (no tenants calling about problems!!!)

Disadvantage (??? Or perhaps rather "reasons to keep it"???):
- Tenant is already paying rent, so you're building equity. Why not keep it??? In 30 years (or length of mortgage), you'll own the property. And given it's a long time horizon, the property will appreciate in value by then anyway.
- no need to go through the hassle of selling (probably not a legit reason

So - did I miss something? Why are some others reasons to sell vs. keep an investment property knowing the market is going down?

Trying to learn here (since looks like there're some pros here)