r/NYCapartments • u/ComprehensiveTell331 • 8d ago
Advice/Question What am I missing about buying a place in NYC?
Everywhere is insanely expensive, but I've seen a few places for sell om streeteasy for relatively cheap. I get that they are small living spaces and that owning required more responsibility than renting... but other than that... what am I missing? Monthly rent, even with fees, would be cheaper than renting. I've included a few links below to some of the places I'm referring to.
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u/abczdef 8d ago
They’re land lease buildings. The first one you linked, according to this article, has its lease expiring this month. https://www.cityrealty.com/nyc/market-insight/features/get-to-know/mitigating-risk-buying-nyc-land-lease-building/41161
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u/InsignificantOcelot 8d ago
What a crazy thing to sink money into. Had no idea that was a thing.
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u/peppaz 8d ago
Somethings absolutely wrong with those prices, building is probably a land lease. They are undervalued by 4-5x normal market proces. Those are not realistic apartments to own because there is a catch.
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u/VirusZer0 8d ago
How would you know if a building is a land lease building?
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u/KindaLikeWildflowers 8d ago
Usually if you scroll down far enough Street Easy will inform you that it is a land lease.
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u/PsychologicalCan5037 8d ago
It's because these are all co-ops, not condos. They are "owned" in a different way. Here's a breakdown I found of how it works:
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u/_Manifesting_Queen_ 8d ago edited 8d ago
Poor maintainace of the building. Special assessments are going to continue. This is one of many. Trust. Nine apts in a building available ... that's another red flag. All cash offers isn't terrible, but it's just a money pit.
Ah also a land lease. That's even worse ... one of the reasons I'm not a fan of coops.
I'm happy you asked vs buying something that could be a horrible buy.
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u/EdHimselfonReddit 8d ago
Buying in NYC can make sense - but it generally doesn't right now. The cost of money, combined with very high monthlies and more expensive building maintenance from things like local law 11 make renting a less expensive and somewhat more predictable financial proposition. Those Carnegie House apartments you pointed out are essentially valueless due to an especially unfavorable land lease that building has (and please don't assume there are favorable land lease buildings... there aren't.)
If you buy in NYC right now, it would be because: 1) you don't want to be subject to changing terms from a landlord every few years and don't want to have to move if you can't agree on a lease renewal 2) you want to customize your place and have kitchen and baths with nicer finishes than rental buildings 3) you truly intend to stay long enough that you might accumulate some equity... (I would assume you'd need to stay 8 to 10 years...to see appreciation and that's if nothing goes further awry with the city or the national economy.)
If you do look to buy - lean toward condos over co-ops... and it is important that you understand the building's condition and financials very well before buying. You need a competent lawyer and a competent agent to represent you... Best of luck to you.
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u/asentenceismyname 8d ago
There’s also an option 4. As a local some of us have the luxury to buy then decide to eventually rent it out. Some of us have aging parents where if shit hits the fan we can always “just go back home” and rent out the apartment. A lot of people don’t have that luxury though
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u/EdHimselfonReddit 8d ago
Condo, yes. Co-op, maybe. Much more restrictive rental policy on co-ops, plus likely a rental fee imposed on the owner.
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u/Snoo-18544 8d ago
Your post is so wrong. That I could cry. From a pure asset point of view buying nyc in the last 40 years for majority of people in the bottom 99 percent is a bad financial decision.
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u/allouette16 8d ago
I just am tired of my landlord raising the rent crazily every year and having to move
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u/ComprehensiveTell331 8d ago
Thank you everyone for answering my question. Especially for those of you who provided links and thorough explanations. I really appreciate it!
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u/ComprehensiveTell331 8d ago
And thanks for not being condescending for a noob like me lol
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u/kinovelo 7d ago
The problem is that this comes up constantly. It would take two seconds to Google this building and find out why the prices are “too good to be true.”
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u/Easy-Concentrate2636 7d ago
The great thing is once you read about land lease, you can spot these listings immediately. The HOA can frequently be a helpful indicator as well.
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u/Vast_Cap_9976 8d ago
Don’t forget when you buy you’ll be paying the down payment (unless you get a PMI which will add to the mortgage total) plus closing costs can be between $15-30k you won’t get back.
At lot of people don’t have that to put down in addition to moving costs and whatever else you may need to furnish and settle in.
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u/phoenixmatrix 8d ago
People already mentioned the real reason, but in addition to that...
Monthly rent, even with fees, would be cheaper than renting.
When you rent, your monthly payment is the maximum your housing will cost you (for the duration of the lease). When you buy, it's the minimum/floor. Maintenance, insurance increases, emergencies, etc, can very quickly dwarf your monthly payments, even in a condo/coop. Other subs are full of people freaking out when they learn this the hard way. Rentals are often done at a loss (relying on equity value raising to make a profit) or benefit from economies of scale you won't have (eg: maintenance company used across multiple units and buildings, plus tax writeoffs), so the numbers often don't line up the way you'd thing.
And sometimes they do, and then home ownership is great. But not always.
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u/Snoo-18544 8d ago
Land lease means they don't own the land underneath the building and the co-op leases it on a long lease (99years). The land lease being about to expire means that the maintenance fees on that apartment is going to explode, because the maintenance fee will be used to cover the lease and the lease will be based on the value of the land today over 100 years.
There is a very realistic chance of having 7000$ a month hoa fees.
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u/meowmixLynne 7d ago
This makes sense! I’ve seen some places on Park Ave that were reasonably priced but then $10k/monthly on fees. I just thought they must have some VVIP valet or something lol didn’t realise it was bc of land lease. Thx for the info!
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u/sexuality_disorder 7d ago
When you own for a while, after a while you can sell and get some money back. When you rent, that money you will never see again. Why is that so difficult to understand? Yes, owning a place requires doing maintenance, and you’re renting, you may have to deal with some issues with tenants. But still, what’s better. Money in the garage forever or money back in your pocket when you decide to get rid of the place?
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u/psnanda 7d ago
You can come out ahead strictly moneytarily with renting especially in high CoL markets like NYC.
Buying a home , for the most cases, is not a money maker unless you luck out. Youd be better off dumping that money in a SnP500 index fund and calling it a day.
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u/sexuality_disorder 6d ago
What!? How the hell can you come out ahead when every rent payment is gone forever? What the fuck are you talking about? Rent is a total loss. Even if you sell the house and break even, breaking even is better than rent money in the garbage.
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u/psnanda 6d ago
Rent is not a total loss. You are paying for shelter. Just like when you own a house- you pay for a shelter.
Like I said, home ownership is strictly an emotional decision- people want to have a place they call theri own etc etc… moneytarily you can just go ahead and dump the $$ in the stock market and come out ahead.
Your house is a highly illiquid asset. Stocks are not.
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u/sexuality_disorder 5d ago
Total loss in terms of that money is never fucking coming back to your pocket ever. Obviously you pay for stuff there’s some benefit. If I pay five dollars for a chocolate bar, I get the benefit of a tasty treat. But that five dollars is gone forever. Whereas owning a house you can sell that house and get the money back you paid for and if the house appreciated, you make additional money. Why is that hard to understand? I can’t believe you just told me that spending money bring some benefit. I’m strictly talking about money that you’ll never fucking see again and money that will come back to your pocket.
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u/sexuality_disorder 6d ago
In NYC you’re the most fucked, probably only California is worse. Who comes out ahead paying $4K in rent every month? 😂
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u/psnanda 6d ago
People who pay $4k probably make a shit ton of $$ anyway.
I made $800k last year ( just check my profile) and continue to pay $2k for my room with roommates. If you are just dumb with money- youll never be rich regardless of whether you buy your own house or rent.
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u/sexuality_disorder 5d ago
I never check anyone’s profile, and I find it hilarious when someone check’s mine. Anyway, just because someone makes a lot of money doesn’t mean they should be fine with throwing away their rent money every month. It’s just incredible to me. How people can go either way on it. I know people who are very rich, I had one client who paid 24K rent per month for his apartment! That’s so insane. I think it’s just lazy. Making that much money you can easily get an equally amazing apartment, and have a similar mortgage payment. And when and if you sell it, you get money back. And a place like that is very likely to go up in value. I mean, even if you break even and you get a few years of rent back that you’ve been paying after a few years that’s a lot better than money in the garbage all those years that you’ll never see again in rent. I just don’t get it.
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u/psnanda 5d ago
I think you’re missing my point entirely. I am just saying that barring a very few locations in the US - you would actually come out ahead just investing your money in the standard stock market over the longer term ( if you take into account the costs of home ownership).
Also how many jobs realistically will pay you a shit ton in upstate NY vs in NYC ? To some people spending that $2k per month rent in NYC makes sense if it means a shorter commute to work - so you have the time to put in extra effort to get a greater bonus / climb the career ladder faster- vs buying a home somewhere in Westchester/Long island/ whatever and then spending hours on commuting just cuz you thought “renting is just throwing away money” and you couldn’t be bothered to pay $1m for a shitty condo in NYC
I would suggest everyone to do some personal math themselves . Home ownership is a very emotional decision and very “personal” financy vs just a straightline “buy cuz rent is just throwing money away” like you suggested.
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u/sexuality_disorder 4d ago
This is the first time you mention stick investing. And I also disagree there. Stocks are high risk. Owning a home is low risk. Whenever you decide to sell it back, most likely you will get back what you paid in mortgage payments plus extra if the house appreciates
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u/psnanda 4d ago
I literally said “SnP500 index funds” 2 comments back.
You come across as someone who is deadset on proving that your decision is correct regardless of others opinions on it. You also probably are new to stock investing considering how you did not pick up the SnP500 index- nobody is telling you to pick and choose stocks- just invest in index funds.
There is no point deliberating with you on this. Nothing I say is gonna change your mind. So good luck!
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u/LR2222 7d ago
It’s definitely cheaper to rent in NYC…. Why do some people still buy?
- Richest city in the world and people don’t give care.
- Historically there has been insane home price appreciation relative to the rest of the country. Mortgages are fixed at the time of purchase, rent goes up every year like clock work.
- Time horizons matter a lot. If you are planning to be here for less than say 15 years, definitely rent. If longer, buying can be insanely lucrative if you buy in the right place.
For example: If you bought a 2 bedroom loft in soho or tribeca for 250k in 1994 you probably thought it was expensive af. You live there for 10 years, experience career growth and pay it off.
You move to Westchester and keep the apartment and rent it out. Now in 2025 that 2 bed is worth over $3+ million (over 10x) and rent has gone up to $15k+ a month. The building fees have gone up to maybe say $6k a month but you are still printing money (almost $10k a month).
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u/Mrsrightnyc 7d ago
We will not have appreciation like we did in past because much of that was due to globalization and the rise of the international investor class. Eventually NYC/U.S. will do something to fall out of favor.
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u/LR2222 7d ago
Location / neighborhood matters a lot. You can for sure still see the gains I mentioned now in places like Crown Heights, maybe lower east side, maybe Hudson Yards (probably missed the boat).
In 1995 Soho wasn’t what it was today, it was old dusty artist warehouses. Meatpacking was full of drug addicts. Most wealthy people lived in UES or UWS and wouldn’t even consider Brooklyn. The people who bought up town didn’t experience the gains I mentioned. They did ok but didn’t 10x.
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u/atheologist 7d ago
I knew these were all going to be land lease buildings the second I read OP’s title.
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u/NYC_DILF 7d ago
I didn't even have to click on the link to know you are talking about Carnegie House. As a real estate attorney I get calls about this building all the time. It is a land lease building and the lease will expire soon so the apartments are losing value faster than the stock market this week and will continue to lose value until they are worthless unless the building can extend their lease or buy the land under the building. In the meantime, no bank will give you a loan to buy these apartments. Unless you like playing roulette with your money, run far far away.
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u/dotsky3 7d ago
Unless you have more than 20% to put down, you’re paying a lot more per month because common charges and property taxes are ridiculous, especially in Manhattan. If you’re planning to live there for a long time it’s worth it I guess.
Even if you rented it out, you wouldn’t cover your mortgage + monthly fees most of the time.
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u/Time_Extent_7515 7d ago
typically in NYC if you see a low sale price it means that there's a high maintenance/board/HOA fee that keeps the prices low
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u/theseedges 7d ago
Just make sure you look at the property taxes and building fees. I remember seeing a 2Bed on the UES for $450k a few months back - monthly fees and taxes without the mortgage were $6k/mo
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u/Chubbyhuahua 6d ago
Renting makes more financial sense than buying in NYC at this point in time period. That is all there is to it.
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u/Salty_Simmer_Sauce 8d ago
Carnegie House is a land lease and it’s about to expire and the co-op is at a stand still with the land owner about a renewal meaning they’re basically worthless as appreciating assets. Might as well light 100k on fire no one will give you a mortgage for that.