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Buy smart and your monthly charges will be manageable

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Got the down payment covered, but worried about how you’ll swing your monthlies? Mike Malul of City Connections offers strategies for keeping the monthly fees to a minimum in this week’s Buy Curious.


I've saved up a sizable down payment for an apartment, but I need to keep my costs every month as low as possible. How do I find a building with lower monthly fees? 


A larger than usual down payment will start you off on the right foot. After all, your mortgage payments will comprise a large chunk of a big chunk of your monthly bills, so if you can put more down at the start and find the best interest rate, you'll spend less on an ongoing basis. Likewise, finding a place with lower property taxes will help keep costs down.

Nonetheless, that said, you still have some control over how much you spend on maintenance fees (in a co-op) or common charges (in a condo). Here's how to minimize your carrying costs:

  • A financially sound building:  Make sure your attorney burrows deep into a building’s financials before you make a purchase. After all, you shouldn’t have to pay for poor budgeting decisions made in the past.  That’s not to say that some buildings with higher monthlies are necessarily financially shaky or that some buildings maintain super-low monthly charges by neglecting expensive capital repairs and routine maintenance. Just make sure you and your attorney do your homework.
  • A co-op building that's paid off its underlying mortgage:  If a building isn't making monthly mortgage payments on the underlying mortgage, neither will you. Just be aware that this doesn't mean the maintenance will stay low. Maintenance fees also cover property taxes, renovations to common areas, upkeep, staff salaries and so on. (This doesn’t apply to condo buildings since they don’t have building mortgages.)
  • A condo building with tax abatements: Although co-ops generally cost less than condos, new condo developments sometimes offer so-called 421-a tax abatements that will reduce your monthly tax burden substantially—at least for a while, since these incentives do expire. You’ll find such condos throughout Manhattan and even in Brooklyn.
  • A place in Upper Manhattan: Apartment prices are lower in some parts of the city, meaning they'll have lower monthlies just by virtue of their location. Take Manhattan from 110th Street in Harlem up to 220th Street in Inwood, for example. Many co-ops in these neighborhoods are well-established and financially sound, making the monthlies low. But there are also a number of newer condos where a buyer could benefit from tax abatements.
  • An HDFC co-op: A Housing Development Fund Corporation co-op is another option. These units—which were converted to co-ops or built with subsidies from the city—usually sell 40 to 50 percent below market rates, but they come with income restrictions. Maintenance fees tend to be lower in these co-ops for a couple of reasons. First, since the co-ops are meant to be affordable housing, the city reduces real estate taxes, property taxes, mortgage-recording taxes and transfer taxes. Second, since they are sold below market, your monthly mortgage payments will be lower because you're not getting as big a mortgage.
  • New buildings: If there are fewer repairs or renovations needed--as is usually the case with new(ish) developments--the building won’t be spending money on that, and in turn, they won’t raise the bill for owners or shareholders.

Listings with low monthlies:

  • Financial District studio/one-bathroom condo, $899,000: Located at 20 Pine Street between Nassau and William Streets, this alcove studio loft has beamed 10-foot ceilings, oversized closets, central a/c and a washer/dryer. Amenities include 24-hour doorman, concierge services, a gym, a yoga studio, a roof deck lounge, a pool and a spa. Common charges are $897 a month and taxes are just $99 a month thanks to a tax abatement that expires in 2021.
  • Financial District studio/one-bathroom condo, $725,000: This apartment at 75 Wall Street between Water and Pearl Streets has low common charges ($514), and monthly taxes are just $132 thanks to a tax abatement that expires in 2023. The property can either be sold vacant or with a tenant already in place. Building amenities include a gym, yoga studio, a lounge with a pool table, a screening room and parking.
  • Morningside Heights one-bedroom/one-bathroom co-op, $427,000: This recently updated one-bedroom at 622 West 114th Street between Broadway and Riverside Drive features a stainless steel kitchen, remote-controlled ceiling fans and a new apartment front door. Riverside Park and the Westside Highway bike path are right down the block. Maintenance is just $726 a month and there’s no building flip tax.
  • Park Slope one-bedroom/one-bathroom co-op, $475,000: Just one block from Prospect Park, this south-facing one-bedroom at 411 15th Street between Eighth Avenue and Prospect Park West offers exposed brick, hardwood floors, an open modern kitchen a renovated bathroom and in-unit laundry. The building offers a shared patio garden, storage space and bike storage. Maintenance is just $498 a month.
  • Morningside Heights one-bedroom/one-bathroom co-op, $499,000: An HDFC co-op, this property at 175 Claremont Avenue between Tiemann Place and West 122nd Street features 10-foot ceilings and a surround-sound system. The building is well-maintained and features a live-in super, a video security system, basement storage, bike racks and a small gym with a children’s play area. Monthly maintenance is $451 a month.

Related posts:

How to buy a NYC apartment

Buying, renovating or refinancing next year? 5 mortgage trends to watch in 2014 [sponsored]

What 8 first-time buyers wish they had known

Here are the 7 most likely reasons you'll get turned by a co-op board

7 questions to ask about the building before you buy an apartment there [sponsored]

Buy Curious is a weekly column in which NYC real estate brokers help buyers develop a realistic search strategy. Want some advice on your search? Send us your wish list.  

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