Desperate to live in a studio in downtown Manhattan, but worried that a room built for one isn’t a good investment in the long run? It is, says guest broker David Gomez Pearlberg of TOWN Residential. Find out why in this week’s Buy Curious.
THE WISH LIST:
I’m looking to live downtown, but all I can afford is a studio. Is that a good investment? What should I be looking for?
Studio apartments are wonderful investments, says Pearlberg. They’re always in demand because they’re great starter apartments and a (relatively) financially feasible way to begin building real estate equity. According to StreetEasy, the median price for a co-op studio in Downtown Manhattan is $539,000 and $872,000 for a condo (as opposed to $879,000 and $1.35 million, respectively, for one-bedrooms).
As expected, studios are in demand particularly in ever-popular areas like the West Village and Chelsea, but they're usually pricey. If you’re looking to save some cash, head further south. Some of the best values can be found in the Financial District, which isn't by any means cheap, but is still a bargain compared to other downtown nabes. StreetEasy currently lists the median price of a condo studio in FiDi as $759,000, while the median price for a condo studio in Tribeca is $1,597,500 and in Soho is $1,150,000.
As for what you should be looking for, anything over 500 square feet is ideal, Pearlberg recommends. (You don’t want the place to feel claustrophobic, after all.) It’s also a good idea to find a studio with as perks as possible—a new kitchen or bathroom, in-unit laundry, closets galore, etc. This is what will help you stand out from the pack when it's time to sell. Finding a place in a building with a gym, a pool or other luxury amenities would also be wise because those, too, help you stand out and catch the eye of potential buyers. (Plus, it's a bonus for studio owners to have another "room," so to speak, to which they can escape.)
It’s also a good idea to think long and hard about whether a co-op or a condo will be right for you, says Pearlberg. There are more co-ops than condos in Manhattan, so you’ll have a bigger selection if you look at co-ops, but condos tend to have more flexibility in subletting, handy for when you need to vacate your studio for larger digs or greener pastures. (In Pearlberg's experience, studios are often apt to be sublet since singles move a lot.)
Another important factor is to make sure monthly charges are manageable. Most lower Manhattan studios hover around the $1,100 a month range for maintenance/common charges (your mortgage payment would be on top of that and vary based upon many things, including how much you have as a down payment).
While Pearlberg firmly believes that a straight studio is a great investment — and says that in his experience they don't take any longer to sell than larger apartments — he still counsels his clients to consider alcove studios (which have a separate L-shaped nook that can serve as a sleeping area) over a typical box. Although in his experience, they’re usually about 15 percent more expensive (for example, check out this straight studio on sale for $549,000, and this alcove studio listed for $615K, both at London Terrace in West Chelsea), Pearlberg says they’re easier to resell and most importantly, more comfortable to live in.
Ready to buy a downtown studio?
Chelsea studio/one-bath co-op, $565,000: Located at 405 West 23rd Street between Ninth and Tenth, this alcove studio at London Terrace Towers has a new kitchen and bathroom and a walk-in closet. The building boasts a full-time doorman, a gym and an indoor pool. Maintenance is $1,258 a month.
West Chelsea studio/one-bath condo, $750,000: This alcove studio at 555 West 23rd Street between 10th and 11th Avenues has floor-to-ceiling windows, a stainless steel kitchen and a large walk-in closet. Building amenities include a 24-hour doorman and concierge services, a fitness center, a live-in super and bike storage. Common charges are $471 a month and taxes are $383 a month.
Greenwich Village studio/one-bath co-op, $599,000: This alcove studio at 101 West 12th Street between Sixth and Seventh is large enough that it can easily be converted into a junior-one. There’s a wall of windows, three large closets and a renovated bathroom with a deep soaking tub. The unit is located in the John Adams, a full-service doorman building with a roof deck, a garage and bike storage. Maintenance is $1,009 a month.
Flatiron District studio/one-bath co-op, $550,000: This east-facing alcove studio at 69 Fifth Avenue, between East 14th And East 15th Streets, is just one block from Union Square and features hardwood floors and a renovated kitchen and bathroom. The pet-friendly co-op has a 24/7 concierge, a landscaped roof deck, central air and a garage. Maintenance is $738 a month.