condo real estate?

Question

Could I rent out a condo in NYC because a friend told me I cant it is illegal to do and if I could would I make a good profit off it particularly a 1br or 2br?

Laura Williams · Answer

@Eva Lowther I believe you'd have to check with that particular condo association in order to be 100% sure what your options are and before you make such a big investment. Each one can have different rules. From my understanding usually condos aren't so restricting as a co-op. You are allowed to rent out, have foreign owners, own in an LLC etc. which is why they sell for more money than co-ops in this area because you have more freedom to do what you want. But I have heard of condo's that have rules where they won't allow rentals or have waiting list of people wanting to rent out to keep the numbers of renters down. This usually has to do with financing cause banks won't lend on condo buildings where there are too many renters and not enough owners living there.  In general co-ops and condo's are a pain cause people love to make rules and get in other people's business but if you want to invest in our area there's not much of a choice.

Eva Lowther · Answer

Dear Laura and Shawn,

Thanks so much for your guidance in this area. I will follow up with the agent and ask her to find out more from the condo association. As per the IRA I will be attending a lecture from Equity Trust this evening on how to use an IRA for real estate as well as becoming a lender. Should I have any other concerns will post and do more research via Bigger Pockets!!!!

Shawn Mcenteer · Answer

@Eva Lowther the advice @Laura Williams provide is accurate, make sure you do you due diligence.  Also search the forum for more information about using your IRA to purchase properties.  It is my understanding you need to transfer your funds to a self directed IRA and from there you it must be handle by a separate entity meaning you cannot use the money yourself, a third party would have to do the investing.  IRS 590 goes more into detail  of what you can do.

Eva Lowther · Answer

Thanks for the question as well as the answers. I was wondering if the condo was in New Jersey and I paid all cash is it legal to rent out. I have seen two great deals in N.J and was going to try and buy one via an IRA and then rent it out. Any feed back will be appreciated. I am still in the game just studying. Also it I buy it can I lease option it to an end buyer?

Thanks

Eva

Luis Quintanilla · Answer

@Robert Vel You can rent out a condo in NYC. A long time ago I wanted to buy one but they wanted to me occupy it for a certain amount of time before I was able to rent it out.

Unfortunately, I don't think you'll be able to make any profit in NYC. I own properties here and I've looked everywhere but I can't find any good cash flowing places. Like Laura said, people in NYC buy for appreciation. I'm having better luck looking elsewhere.

Laura Williams · Answer

@Robert Vel Are you talking about buying a condo and renting it out with a yearly lease? You can do that legally but in answer to your question if it will cash flow that is a no unless you pay all cash or have a huge downpayment. I don't even think you can buy any kind of condo here for less than 400K or 500K.

Now if you wanted to buy a condo and rent it out by the night (for less than 30 days) on AirBNB then that is illegal unless you are staying there also. People do it but it's not legal. 70% of the housing stock here is Co-op which most will not allow you to rent out at all, you have to live here but they are generally a bit cheaper than condos. There are the rare few co-ops which are investor friendly that you can buy and rent out. I found my friend one of these co-ops (which was hard to find) for 270K and maint/taxes/sublet fee is about 770 a month and he gets 2K a month rent. Is a really small studio but that is considered a good return for here. New York City is not a cashflow city. People that buy here buy based on the fact they think the prices will increase and they will get the appreciation.

Daniel Alegre · Answer

@Robert Vel  are there any HOA fees involved with the condo? Because they could potentially eat away at any profit you have even if it is legal.

condo real estate?

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