Posted by Wei Min Tan on April 20, 2022
Wei Min Tan deals with the two categories of expenses as an owner of a property in New York — Closing costs on purchase and ongoing costs.
Closing costs on purchase
Closing costs are one-time expenses when buying a property.
The biggest expense is the Tourist tax. It applies to properties of $1 million or more. For a property price of $1 million to $1.99 million, the tourist tax is 1% of the price, $2 million, $2.99 million at 1.25%, 3 to 4, $99 million at 1.50%, $5-9.99 million at 2.25%, $10-15. million to 3.25 percent.
This only applies to the purchase of a mortgage and is approximately two percent of the loan amount. If you buy cash, there is no mortgage tax.
the title insurance is the insurance you pay to secure a clean title. This means that the seller has the right to sell the property. Title insurance insures against the possibility of someone claiming ownership of the property after you have closed it up and own it.
Transfer rights (if new development)
Transfer tax only applies to a buyer if they are buying into a new development. This does not apply if you are buy a resale property because then the transfer duties are paid by the seller.
When buying a new development, closing costs basically double because you have to pay transfer taxes and other expenses related to the new development.
With a resale property and if you are buying cash, closing costs are between 2 and 4% of the purchase price. If you buy resale with a mortgage, closing costs are approximately 6-7.5% of the loan amount. These closing costs double when purchasing a new development due to transfer taxes and new development expenses.
Weimin’s article: New York Stamp Duty, Closing Costs and Property
Common charges and property taxes are expenses you pay when you own the property. Common costs depends on the building and the size of the apartment. These are fees paid to cover building staff salaries, repairs and maintenance of a building. Property taxes are paid in New York City and the city’s main source of revenue.
What is a reasonable cost of ownership amount that combines common charges and property taxes? The Manhattan average is about $2.70 per square foot per month. $3 and above is considered high.
In addition, there is home insurance that costs between $600 and $1,500 per year.
Weimin’s article: How the NYC Property Tax Bill is Calculated
What we do
We focus on of global investors buy condos in Manhattan for portfolio diversification and long-term return on investment.
1) Identify the right purchase according to the objectives
2) Manage the buying process
3) Rent the property
4) Manage tenants
5) Market the property during the eventual sale
Wei Min’s media interviews by CNBC, CNN, New York Times about investing in Manhattan real estate