Accountant · New York, NY · Member since 2019 · 11 posts · 2 votes
Is it better to buy a Co-Op or condo if you are trying to get rental income? I know for co-ops some board members will not allow you to even rent your co-op. I live in New York, I want to start investing but co-ops and condos range from 150k-250k. Which I can be pre-qualifed for. A two family house in New York is 500k. I rather invest in a two family house but I don’t have the proper funds. Should I start investing in a co-op or condo to start off? I want to make rental income, that’s my main goal
Most Co-ops don't allow you to rent out the unit. And HOA rules on condo's can change at any time. Both are a risk but less of a risk is the condo route. Did you look into FHA loans to get the most bang for your buck with the multi family. Remember that in most cases they'll consider 75% of the rental income towards you qualifying towards a higher purchase price.
Is it better to buy a Co-Op or condo if you are trying to get rental income? I know for co-ops some board members will not allow you to even rent your co-op. I live in New York, I want to start investing but co-ops and condos range from 150k-250k. Which I can be pre-qualifed for. A two family house in New York is 500k. I rather invest in a two family house but I don’t have the proper funds. Should I start investing in a co-op or condo to start off? I want to make rental income, that’s my main goal
I think a 2-4 family house is the way to go. There are many low money down loan options out there to help you purchase one. I also like MF because if one tenant leaves, you are not completely scrambling to refill their space, as you will still have money coming in from the other tenants.
@Scott Wolf the issue isn’t the money down. A 2-4 family is around 500k and up. How can I get prequalified for that? My past two years of w-2 weren’t the best since I was in college and working. Now I have a full time job. How can I get a pre-approval for 600k?
@Scott Wolf the issue isn’t the money down. A 2-4 family is around 500k and up. How can I get prequalified for that? My past two years of w-2 weren’t the best since I was in college and working. Now I have a full time job. How can I get a pre-approval for 600k?
Hi Raid, sorry I couldn't divine your full work history. In life you will find that you can only get what you ask for. So go ask a bank what you can pre-approved for, and they will let you know if you can get pre-approved for that amount. Are you going to buy the co-op all cash? Cause they will need at least 20% in NYC.
@Scott Wolf My goal is to honestly get a 2-3 family or a 2 family with a basement. I want the rent to pay the mortgage. I’m looking for something that is already producing income. I just graduated college and I want to invest in real estate in NY. You’re suggesting to walk to a bank and see what I can get approved for ?
@Scott Wolf My goal is to honestly get a 2-3 family or a 2 family with a basement. I want the rent to pay the mortgage. I’m looking for something that is already producing income. I just graduated college and I want to invest in real estate in NY. You’re suggesting to walk to a bank and see what I can get approved for ?
Call them. Or a mortgage broker. Happy to make referrals if you’d like.
I owned rented mainly rent out duplexes and triplexes in NYC and am aware of issues with COOP's and Condos. The short answer is, stay away.
One of the questions I often ask potential renters is what other apartments they looked at. Often, I hear there's a COOP I looked at, liked it, and they'll take it up at their next board meeting. I'll say "you got it"?. They shook their head, "don't know", and then say "I have to move" followed by because "my lease is up", or "I relocated here for a job" etc etc. Kind of feel sorry for them.
I would have the reverse problem at some condos I own in MA. It started off they approve the unit as a rental originally. Later they want copies of leases. Then some time later, they have to approve the tenants, second guessing me. They only hold board meeting monthly, so if they reject my tenant, I have to get another, and they'll take it up next months. If I get 3 rejections, I'll lose 3 months rent. I sold it when they're considering approving tenants, and I know I'll lose money with 3 month vacancies. I normally have one month at the most.
We just inherited my mom in laws coop in Rego Park Queens, currently on the market. No mortgage, we thought of renting it out originally. Told their policy is the owners have to live there originally, after two years, you can rent it out, inheriting it doesn't count, and they have to approve the tenants as they have to vet and approve buyers. I have a broker handing it, had a buyer making $150K a year at a top notch consulting firm, might not get approved because she was there only one year and six months, compared to their requirement of two. Coop fees are $850+/month in the interim, which fortunately we inherited money market funds to cover. If this was 20 years ago, this happened, we would have been in a pickle as money was tight and we would be in trouble covering $850/month for a vacant coop that's mortgage free.