Foreign real estate investors currently buy one-third of Manhattan condos, and they account for 15% of the total purchasers in the city. New York City property has long attracted international buyers, a trend that took off in 1976. Since 2010, the dollar has been especially weak against a number of foreign currencies and that has increased foreign investors participation in Manhattan.
- About NY City
- Can foreigners buy property in New York?e
- What type of properties are popular amongst foreign / international buyers?
- Financing for foreign buyers / international buyers
- What do I need for financing to buy a condo in NY City as an international real estate investor?
- Cash buyers
- Do I need to pay the broker fee if I work with a broker to help me find my apartment?
- Do I need to pay the broker fee when renting my apartment?
- How can I rent out my Manhattan apartment after purchase?
- How can I manage my apartment while living outside the U.S?
- Who can repair my condo if something breaks in my condo in NYC?
- What is NYC
- Condo Closing Costs / Real Estate Transaction Costs?
- Where are the best areas in Manhattan for investment?
- What is the current Real Estate Market in NY?
- Is it possible to buy property in Manhattan with the name of a corporation?
- What is advantage and disadvantage of buying a condo in NYC through a business name?
- Things To Know About an LLC
- What are benefits to work with a real estate agent when buying real estate in NYC?
- Should I use more than one agent?
- Selling the property
- All your real estate needs
According to the Census, NY City is #1 most-populated city in the United States with 8,175,133 Population in 2010, a modest increase of 2.1% since 2000. In a recent survey administered by the Association of Foreign Investors in Real Estate,NY City was voted the most attractive destination for real estate investment. The recent Knight Frank Wealth Report 2011 ranks Manhattan as the #1 market in the world based on factors including economic environment, political climate, knowledge and quality of life. In addition, since 2005, the city has had the lowest crime rate among the 25 largest U.S. cities. As per AOL published on Oct. 12th2011,when it comes to square footage, property in NY City ($1,068 per sq ft), is downright cheap compared with Paris($3,287 per sq ft), London($1,590 per sq ft), Singapore ($1,561 per sq ft), and Hong Kong($1,118 per sq ft),
Yes, approximately 15 percent of apartments are owned by foreign individuals and companies. They often purchase as a pied-a-terre (vacation home) or as property.
Condominiums (Condos) are the most popular choices among international buyers. There are two categories of apartments – condos and co-ops. For purposes, a condo is recommended because of higher appreciation potential and flexibility in renting. Condos are usually newer buildings and almost all of new constructions are condos. Co-ops are buildings whereby the apartment buyer buys shares of the building. Co-op Boards govern co-op buildings and every purchaser must pass their approval and any renovations usually need approval as well. More importantly, co-ops usually restrict ability to rent. For example, many co-ops only allow renting 2 years out of every 5 years. In addition, even though it is an ALL CASH purchase, full financial disclosure is required. This means perspective buyers will have to provide U.S tax returns. These options are more challenging for foreigners. The value of a condo, on a per-square-foot basis, is about 20 to 30 percent higher than that of a co-op. In addition, the appreciation potential and demand for condos are higher as well. The city has roughly 70% co-op buildings and 30% condos according to a survey commissioned by the Council of New York
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Mortgage loan financing is available and can be obtained either through a U.S or non-U.S bank. Since the credit crisis, lenders have tightened credit criteria and will require about 30 percent as down payment from a foreign buyer. Having a good credit score in your country can help to get financing either in the U.S or internationally. You will know better about your budget after getting pre-approval. Contact us for a list of U.S and international lenders who provide financing to buyers and who lend to borrowers with visas and ITINs.
The two ways of arranging financing are: (i) Financing from U.S lender: This option is easily arranged through a bank in the U.S. The requirement is usually a 30 percent down payment (70% Loan to Value) up-to-30-year loans and up to five times a borrower’s annual income. Also, the buyer needs to show liquid assets that is usually based on a multiple of the monthly payments. Since financing is in the U.S, the buyer would have to pay about 2% mortgage tax. (ii) Financing from home country: This refers to getting an international mortgage from the home country of the investor. The main difference between getting the mortgage in the U.S and in your country is saving on the mortgage tax and various bank fees. But of course, there may be other fees associated with the financing bank. Mortgage rates are about as low as anyone has seen in many decades. The rates of mortgages are determined on basis of your credit history, how much you are financing and if it’s a primary home, or a second home. The cheapest interest rate is generally for primary residence.
1. A U.S Bank account at least 6 months prior to getting a mortgage 2. An established line of credit in your country 3. 30% as a down payment. 4. Copy of your visa or your passport 5. Verifications of employment 6. Four financial references 7. Verification of Rent/Mortgage Payment: Proof of rent or mortgage payments are required for at least a period of one year before the application. 8. 6 months of mortgage, maintenance and the closing cost in the U.S Bank account Make certain that if you buy into a new development that the building has a lender in place or that condo is at least 70% sold – most banks do not lend into new construction unless its 70% sold or in contract. This is very important point since if for any reason you are not able to get financing you could lose your down payment. This applies to new development only. It is very important to work with a broker. And there is no broker fee to buyers. We will guide you to avoid this kind of loss. Contact us Finally, some banks have a new rule which requires the condo building to be 80% occupied by owners… if the building has 22% renters you could be out of luck.
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Foreign investors purchasing in cash saves on the NY mortgage tax, about 2% of the loan amount. In addition, the cash buyer saves various bank related fees.
No. You don’t pay broker fee when working with a buyer’s broker. The commission in New York is pre-negotiated and paid by the seller. When the seller’s agent agrees to list a property for sale, a certain percentage is agreed upon as commission. If the buyer is represented by an agent, this pre-negotiated commission would be split 50/50 between the seller’s broker and the buyer’s agent via a process called co-brokering. If the buyer does not have an agent, then the seller’s agent keeps the entire pre-negotiated commission. Hence, it is in the best interest of the buyer to have agent representation to help identify the right property and negotiate the best price. If the buyer is not represented by an agent, the seller’s agent only has the seller’s best interest in mind. This puts the buyer at a great disadvantage. When the seller’s brokers get listings from sellers, many of them market to all brokers asking them to bring buyers to help sell the apartment before their contract expires with the sellers. And by law, seller’s brokers must present all offers to the sellers, otherwise, they lose their real estate license. Most transactions in Manhattan are done by two brokers: the seller’s broker and the buyer’s broker.
No. The agent fees for both landlord’s and tenant’s agents are paid by the tenant.
Though renting an apartment in NY City tends to come with a higher cost of living, many renters in Manhattan are willing to pay the relatively more expensive rents to live there. There are numerous neighborhoods in New York City that have their own unique culture and feeling. We manage every aspect of buying, renting and selling property in NY City. We can rent your apartment at no cost since renters pay the broker fee in NYC. We perform the following steps:
- Advertising and showing units.
- Collecting applications and screening applicants: credit score, salary, work history, references
- Executing of leases.
- Arrange for tenant move in
If any problem arises, tenants will contact you directly. Minor fix-ups can be handled by a superintendant who works for the building. If the superintendant can’t repair the problem, he will recommend a specialist. We will provide you with a list of reliable and insured repairmen after purchase of an apartment. Usually you will have either no problem or minor fix-ups. Since Manhattan tenants are usually high income and good credit quality individuals, there is usually very little management. If you choose to hire a management company, there is a fee of anywhere from 3% to 10% of gross rent. We will also provide you with a list of professional and reputable management companies after your apartment purchase.
Building superintendent can take care of minor problems. When something breaks in the property, your tenants need to talk to the doorman or superintendent. Superintendent can fix up minor problems at no charge or charge the owner for material costs. If the building maintenance staff can not fix the problem, they can recommend another specialist. I have a list of reliable insured repairmen. You may contact me if a problem occurs.
When buying a property, closing costs are approximately 5 percent of the loan amount. This includes mortgage tax, title insurance, attorney fees, recording taxes, registration, federal/state/city fees, transfer taxes if purchasing a new development, and other administrative expenses. These charges must be at closing. The broker’s commission is paid from the seller’s proceeds
Virtually any apartment in Manhattan will retain its value as long as New York City remains America’s capital of arts, culture, finance, education and a safe and secure place to invest. If you are planning to keep your property in Manhattan longer than 5 years, the following three areas may be a good ROI:
- Upper East Side near the river Construction has been undergoing along Second Avenue for two new subway lines, Q and T since 2007. The Federal Transit Authority and MTA claim that the Second Ave. Subway would open by the end of 2016 to 2018. Then, residents living in Upper East Side near the river (near York Ave., First Ave. and Second Ave.) will have easier access to subways and prices may be affected positively.
- Midtown West – An extension of the Subway Line to Eleventh Avenue and 34th Street from 42nd Street and Eighth Avenue is expected to be operational by December 2013. A new station at 10th Avenue and 41st Street was dropped from the plans in October 2007 due to cost overruns, leaving the terminal station at Eleventh Avenue and 34th Street as the only new station on the extension. The MTA indicated that the 10th Avenue station could be included in the project if funding were found. If this plan is restored, many newer condo buildings in the area can be appreciated in value.
- Financial District – Commonly known as “FiDi” the Financial District is located at the bottom of Manhattan and has recently become not just predominately a business district but also a neighborhood on the rise with a tremendous amount of Real Estate development of new condominium projects and high end rental buildings. The neighborhood feel of FiDi has improved as farmer markets such as the New Amsterdam Market, both rocery and school districts are some of the best in the city. High end shopping such as Hermes, Thomas Pink, Tiffany’s and Tumi can now be found in the area. There are many subway lines closeby and the area is surrounded by the parks and the river.
Unlike other States of the United States that have a depressing market, indicators show New York is a flat market. The following is the Market Reports by Miller Samuel Real Estate Appraisal and Consulting Firm Manhattan 3Q 2010 – 3Q 2011 Manhattan 2001-2010
Yes. Foreign investors may take title to real estate in their own name, in the name of a domestic corporation, a Limited Partnership (LP), a Limited Liability Company (LLC), or a Real Estate Investment Trust (REIT)
While it can be beneficial to buy an apartment in Manhattan through the name of a corporation, the advantages for foreign buyers can be diminished by potential treaties between the United States and your country. An international investor should consult with a tax professional who specializes in international law. Contact us for a list of international tax specialists.
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1. It takes approximately 1~4 weeks to form an LLC and costs about $165~$500. 2. An LLC has to be formed in the same US state in which the property is located. 3. An LLC can have unlimited membership including non-residents and US residents. 4. The LLC is required to file tax returns (New York State, Federal). 5. At the time, owners can transfer or sell LLC shares to a buyer.
Buyers do not pay broker’s fee. In other words, the services of buyer’s broker are at no cost to the buyers, since commissions are paid by the sellers, and then divided between the buyer and seller’s brokers, and most of the transactions are done by both seller’s and buyer’s brokers. It is beneficial to you to work with a broker when buying property, because most sellers have brokers, and these seller’s brokers have fiduciary duties to work on behalf of the sellers’ best interest and do not represent the buyer’s rights. Therefore the buyer should have a broker for their best interest. The top advantages to having a broker is that he or she can intercede on your behalf for a price reduction or request concession. In order to make sure you are getting the property you want, and at the most reasonable price, a broker is indispensable. Without one, a buyer can find him or herself losing a great deal of money, due to not knowing the ropes entirely. We are here to help you every step of the way for you to save your time and money. We have access to every available NY City property, find homes that suit your needs and wants, make appointments with seller’s brokers for viewing apartments, help with the presentation of applications and other documents, coordinate the entire team of professionals that one needs in order to conclude a sale.
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No. It is not necessary. We have ALL listings currently available on the market in our database whether or not listed with a seller’s broker. There is no Multiple Listing Service in Manhattan. Our database is updated daily from broker’s database, other print sources and websites. This enables our team to have much more extensive and up-to-date database than the public will find on the Internet. We receive the listings even before the public has access to them on the web. And we immediately notify our clients with new listings and changes of prices in their criteria. The brokerage community strongly discourages the buyer on using multiple agents as this would create confusion. As we are a dedicated team and work hard for each of our clients on helping our clients identify the right property, we in turn expect client loyalty. This expectation is consistent amongst all brokers.
We aggressively market your property using multiple channels to both domestic and international buyers. Whether you are looking to buy a home, sell a home, or investment, Kelsey Uh’s Team provides professional services, information and knowledge to make a successful transaction for the best possible price.
We provide a full service to foreign buyers. This includes identifying the right property, negotiating price, bringing the team together (attorney, tax attorney, accountant, financing, etc.), finding tenants, eventually marketing property for sale.
All information is from sources deemed reliable but is subject to errors, omissions, changes in price, prior sale or withdrawal without notice. No representation is made as to the accuracy of any description.