Looking for buying a condo/studio in NY

[wwkkim]

Hi, I am new to this forum.. actually I am also new to New York.

Because I plan to stay in New York for a long time (about 5 years) I plan to buy a small studio/1 bedroom in Manhattan (Midtown to Downtown) or Long Island City.

What I am really concerned about is, I have to choose between.

1) Buying a studio
2) Renting a studio

If I rent a studio, it will cost around $2000 per month. (Assuming that the studio costs $500000) (I'm not really sure on this one, the monthly rent fee usually costs 0.5% of the actual price)

However, if I buy a studio, approximately $500,000, then I am losing $25000 every year (assuming the interest rate is 5%) and about $500-600/month as a maintanance fee and etc.


So, to make a comparison, if I don't buy a house, I pay 2000 per month. If I buy one, I am loosing about $2600 (2000 lost from not getting money from the bank and 600 from maintanance and etc)


So, the difference of 600 per month should be made up by increase in the price of property as time passes.


Thus, I believe that it would be extremely wise for me to choose "to be developed areas" over "comfort" (near my school). Thus, I was quite thinking of Long Island City since I heard this place was going for quite a development and is expected to have some price increment, at least to fill my $600.

So, could you guys enlighten me about this topic? I am really new to big city and back where I lived I never thought about housing issues but it really became an issue for me in NY.

Thank you :D


PS: I am also new to real estate and anything related, so please forgive me if I used terms incorrectly.

[Front_Porch]

Welcome, wwkkim.

You are generally right in how you are thinking about your math, but you should assume that it will cost a little more to borrow money -- assume charges of $750 a month for every $100,000 you borrow.

So your $500,000 loan won't cost you $2,500, it will cost you closer to $3,750.

But on the other hand, the first few years, most of that is interest, so it creates a tax deduction. Depending on your tax bracket and situation, that $3,750 will "feel" more like $2,800.

I am a broker, and I write a lot about this stuff (including an article next month in Money magazine) so I would suggest you check out my website here: www.frontporchllc.com

It is set up to be searchable, so you can just type a word like "condo" in the search box and then ramble along to your heart's content.

Also, there is a thread on this forum called "buying a new construction condominium" that hits some more advanced issues:

http://wirednewyork.com/forum/showthread.php?t=13523&highlight=condominium

Enjoy!

ali r.
{downtown broker}

[shocka]

Thus, I believe that it would be extremely wise for me to choose "to be developed areas" over "comfort" (near my school). Thus, I was quite thinking of Long Island City since I heard this place was going for quite a development and is expected to have some price increment, at least to fill my $600.



For 500K you can easily pick up a new construction 1bdrm in LIC.
For LIC information check the Wired New York Thread
http://wirednewyork.com/forum/showthread.php?t=5160

Then Jake over at QueensWest.com Created this LIC Buidlings Map
http://maps.google.com/maps/ms?ie=UTF8&hl=en&om=1&msa=0&msid=110371325704774631139.00000111c77789c3c3b65&z=14