New York City living has an addictive quality. How else can you explain the phenomenon in which people who happily spend most of their time in the suburbs or out-of-state choose to purchase pieds a terre here? These secondary, part-time NYC abodes prove that a little bit of city living is better than none.
That said, there are plenty of things the pied a terre buyer should consider before taking the plunge. Here are 10 questions to pose:
1. Does the building you want to live in allow pieds a terre?
This is an obvious first question and one that bears asking because many buildings--especially older, more traditional, co-ops--restrict the purchase of an apartment unless you're planning to make it your primary residence.
“Most co-ops have policies whereby they either accept them or they don’t," says broker Jessica Cohen of Douglas Elliman. "Others will do it on a case by case basis, which often means they’ve allowed pied terres owners in the past and they’ve had problems, so now they have concerns.”
Having the ability and willingness either pay a year’s maintainence up front or put at least part of the money in escrow can go a long way in minimizing any concerns if they are financial, says Roberta Axelrod, a real estate broker and asset manager at Time Equities.
Do your homework first either by working with a qualified broker who has experience in handling these types of purchases or asking for building recommendations from friends or colleagues who recently bought one.
“As a rule of thumb, condominiums don’t designate whether they are pied terre friendly, so almost any condominium is fair game,” says Cohen.
However, a condo purchase will cost you more: According to a second quarter 2013 report from Douglas Elliman, the average sales price for a co-op was $1.09 million vs $1.89 million for a condo.
2. How will the apartment be used -- and by whom?
The board and management's most typical concerns are how often you plan to be there and who’ll have access when you're not.
“You should always be crystal clear about what your intentions are and be able to affirmatively answer that this is for your use and not anyone else’s without prior approval because the board is going to be very sensitive to this, particularly in a part-time situation," says Manhattan co-op and condo attorney Steven Wagner of Wagner Berkow.
3. Can you sublet or have guests?
“Regardless of whether the building is a co-op or condo, they almost always have specific rules in place about guests and renting," says attorney Robert Braverman of Braverman Greenspun. “When it comes to subletting, it usually has to be for at least one year minimum and most buildings don’t allow guests to live there other than your immediate family."
In addition, co-ops typically restrict the length of time an apartment can be rented to 1-2 years within any 5-7 year period.
4. Is your dog welcome?
Even if the building is pet friendly, be sure your dog meets the proper breed and size requirements before you bring him along. Otherwise, it’s probably best to make other arrangements when you’re in the Big Apple, particularly if your dog has a tendency to bark or isn't used to being inside for long periods of time.
5. Are you planning to renovate?
"If it’s going to be anything major, make sure you’ve gotten the approval of the board first,” cautions Axelrod. “People who are used to living in a private home in the suburbs often tend to forget this – either because they’ve never lived in an apartment before or they’re accustomed to doing things on their own."
6. Are you going to be working from your second home?
If you’re self-employed and plan to work while you’re in New York, you may need to get board approval, depending upon the venture and how much foot traffic it will bring.
Therapists, for example, may run into trouble because of the foot traffic they'll bring in all day. On the other hand, a job that's mostly solitary--like a writer--is typically fine.
"Check with the building first before doing anything," says Axelrod. "It also depends whether the area is zoned for both commercial and residential use. Even so, the type of business you may have is up to the discretion of the co-op board."
7. Is a large building staff essential to you?
While it'll certainly be more expensive, buying an apartment in a full-service, doorman building can afford you a sense of security that may be difficult to put a price tag on.
Aside from tighter security, there's the added bonus of lobby staff being able to receive packages and other deliveries when you aren’t around or in residence.
8. Who's going to handle repairs?
“Another thing to carefully weigh is who will take care of any repairs while you’re away,” Braverman says. “Granted, for someone who isn’t living there fulltime, there’s generally less wear and tear on an apartment, though things do happen so it’s always better to be someplace where there’s a staff or a 24-hour super who can respond quickly if problems arise.”
Give a friend or neighbor an extra set of keys in case of an emergency, or at the very least make sure the management company has your immediate contact information while you’re away.
The most frequent types of damage that occur in pieds-a-terre are the same as in full-time residences, according to insurance broker Jeff Schneider at Gotham Brokerage, including "water damage from an overflowing bathtub, sink or dishwasher. But the issue in a pied a terre is that damage can be quite severe before you learn that there's a problem."
Also, Schneider adds, "if your apartment is being rented out at all, that's something that the insurance company has to be notified of right away, because it can void your coverage."
9. Do you need financing?
Getting financing to purchase a pied terre can be a tricky proposition these days no matter how much of your time you plan to spend in your apartment.
“If it’s a second home, it needs to be at least 60 miles away from your primary residence in order to get a fixed rate loan,” says Robbie Gendels, a senior loan officer at National Cooperative Bank.
In addition, says Time Equities’ Axelrod, many banks will charge a higher rate of interest because it’s not a primary residence. Also, the tax treatment on either the purchase or sale of the property can be different, which is why prospective buyers should always consult with their accountant first to make sure it’s feasible.”
10. Where do you spend most of your time in New York City--and how do you get here in the first place?
Consider not only where you will spend most of your time in the city, but how you will arrive and depart the Big Apple.
“If you're flying into Newark, you might want to consider the West Side, whereas the East Side is often a better option if you’re coming in from JFK or La Guardia. The same holds true if you're coming by train in terms of proximity to Penn Station [West Side] or Grand Central [East side]," Axelrod points out. “If you're driving in, then it becomes, ‘where do I park, does the building have a garage, and if not, will there be accessible parking nearby?"