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Real Estate Question(s)
Sorry in advance for the novel...
The mister and I bought our current apartment 6 years ago, expecting to stay for 5 years then sell/rent it out and purchase a bigger apartment (read: 2 bedroom+). However, with the state of things last year in NYC (banks going under, no one getting bonuses, banks being reluctant to give 2nd mortgages etc), we decided that it was not in our best interest to sell. We've been told that our target buyer is probably a young professional who buys based on bonus (we live in a 1100sq ft one bedroom, 1.5 bath in a luxury building on the upper east side). Ok, fine. I'm not crazy-happy we're staying, but it is what it is. Instead, we have a no-holds-barred wedding. And life is awesome.
Fast forward to now. Our real estate broker (a close friend) has always kept his ear to the ground for good "deals" for his clients, and he sends us an email. Well, the apartment is perfect. Unbelievable layout, brand new luxury building, 2 bedroom (plus library!), 3 full bath-- almost 2000sq ft. It is in our neighborhood (where Alex wants to stay), but on a slightly busier street than our current apartment.
Here is the catch. The apartment is just a little bit more than we can afford IF we have to hold onto our current unit as well (waiting for it to sell or rent). BUT it is a great deal (read: less than $1000 a sq ft-- pretty low for this type of NYC real estate). My parents have offered to front us some money in the interim (to cover both holding costs), but that makes me nervous (I hate owing people money). While we can probably swing it, our lifestyle would dramatically change until we could unload our current apartment (no dinners out, no travel, no shopping). Basically, we'd be house poor.
So here are the questions. What would you ladies do? Would you let the new apartment go knowing that when the real estate market turns up again (which it will-- its NYC), you'd never be able to afford it? Would you take unsolicited parental help? Would you give up a really comfortable life in a slightly uncomfortable apartment to be house poor in a huge one?
I don't want to make an appointment to see an apartment that I will probably fall in love with until I can answer these questions... does that make sense?
Re: Real Estate Question(s)
HomemadebyHolman
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This! Plus if you really wanted to make some money, you could do short-term leases at below market rent while trying to find a longer term renter at a preferred rent rate.
My Bio (wedding pics added 7/6)
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I would not take money from my parents.
As for the other stuff... just how "house poor" would you REALLY be? You seem to live quite the opulent lifestyle from the things you've posted. If living in a better place with more square footage would mean four overseas vacations a year instead of six, sure, go for it.
Lucy Elizabeth 10.27.12
If you have an opportunity to buy your dream apartment at a great price, you'd be stupid to pass it up. Just suck up the house poorness for the interim and go for it, even if it does reequire a little help from the parents.
Plus, I always find that money is never as tight as you think it is. It might take a little adjustment period to get used to carrying both mortgages, but I'm sure you'll find that once you get used to it, there's more money there than you realized.
AND! Learning to live a bit less frivolously now may be a good thing.
Wholeheartedly agree with this. I think in the past couple years things have gotten completely out of control in terms of spending. We have a ton in savings, but there would be so.much.more had we been more responsible. Oh the joys of being young and stupid enough to believe "work hard, play harder..."
I survived the RoLex wedding and all I got was this lousy husband.
One&Only Palmilla - Los Cabos, Mexico
Have you asked your broker what he thinks about your current place? I know it's not a guarantee but if he thinks it's a easy sell/rent, I'd say go for it.
I would probably go see it before making the final decision. When we were apt. searching we found several that were amazingly good deals on paper but when we saw them, they were not nice enough to justify higher prices.
As for taking money from the parents, I would say only if you can safely pay it back in a time frame that everyone is comfortable with. I would definitely look for room in the personal budget first though. Travel, shopping, etc. are nice but home is home.
We would probably live like we did 6 years ago when we scrimped and saved to buy our current apartment. We did not eat out, we did not shop, and on the rare occasion we did travel, we stayed with friends instead of in hotels. Yes, the past few years have changed us financially and it has been a blast, but I am in no way "used" to living like this.
To be honest, money (spending, owing, having) scares the bejesus out of me.
I survived the RoLex wedding and all I got was this lousy husband.
One&Only Palmilla - Los Cabos, Mexico
It was my first question to him after I looked at the specs on the new apartment. He said it is a nice place, so we shouldn't have too much trouble, but we most likely won't be able to sell it for as much as it is worth (though it would be more than we paid for it). The rental market is apparently strong, so there is always that option. We emailed our mortgage broker to ask about current rates for second mortgages and we're waiting to hear back.
And I agree, home is home.
I survived the RoLex wedding and all I got was this lousy husband.
One&Only Palmilla - Los Cabos, Mexico
He's a web entrepreneur and a tutor (aka nerd) for a company in NYC (SAT, GMAT, GRE, LSAT, MCAT etc), but probably not one that you would have heard of unless you're from the area.
I survived the RoLex wedding and all I got was this lousy husband.
One&Only Palmilla - Los Cabos, Mexico
Personally, from the somewhat limited amount that I "know" about you, I think I would:
1. Take short-term help from parents
2. Buy the dream place
3. Try to rent out current place (or sell it, since you said the broker thinks you can get more than you paid. Do you have a mortgage on it or is it paid off?)
I always try to make decision by thinking which course of action you will regret more. Will you regret passing it up? (I'd think you probably will) Will you regret buying it and being "frugal" for a brief period? (In the long run, probably not, especially since you won't lose $$ on your place)
I made an appointment to see it on Monday... oh geez.
I survived the RoLex wedding and all I got was this lousy husband.
One&Only Palmilla - Los Cabos, Mexico
He is a classical and jazz pianist, he just no longer does it for work. The lifestyle was too crazy for him.
Anyway, thanks for the perspective ladies. It really helped. I'll keep you posted...
I survived the RoLex wedding and all I got was this lousy husband.
One&Only Palmilla - Los Cabos, Mexico
Ok, coming late to the party (that's my style, yo) but I want to throw my hat in too.
As someone who settled for a house that was less than her dream, I say you must buy the new apartment (if, after visiting it, you love it like you think you will). What I know of the NY rental market is that fabulous things rarely come up; I can only imagine it is so much worse for owning.
Rent out the old place in the mean time or, if that's a hassle and you really don't want to, sell it for less than its "worth." You're buying your dream apt for less than its worth and you won't be selling your old one at a loss anyway. Spread some of your good fortune around.
<a href="http://www.thenest.com/?utm_source=ticker&utm_medium=HTML&utm_campaign=tickers" title="D
Oh good! I'm so glad you made an appt to see it! Let us know how it goes!
The more I read and think about this, the more I think you should do it.