Buy a property in New York

Perché investire a New York?

With more than 8.2 million people, New York is undoubtedly the densest city in the United States. The “Big Apple” is one of the largest financial, cultural and business centers in the world. Its influence in the fields of politics, education, entertainment, media, fashion and art makes it undoubtedly one of the major world cities. The city offers an excellent quality of life, household incomes are high and it is full of cultural activities and entertainment.

With more than 200,000 companies identified, the city of New York has one of the most developed and integrated economies in the world. The New York metropolitan area alone hosts 53 companies ranking in “Fortune 500” – more than any other metropolitan area in the United States.

New York è anche un hub del commercio internazionale. Con Londra e Tokyo, è uno dei tre centri di comando dell'economia globale. Questo è il motivo per cui così tante aziende internazionali hanno stabilito la loro sede a Manhattan. Un dipendente su dieci nel settore privato della città lavora per un'azienda straniera.

La città è un importante centro nei settori della finanza, delle assicurazioni, degli immobili, dei media e dell'arte negli Stati Uniti. La sola Greater New York genera quasi 10% del PIL totale degli Stati Uniti. Sebbene l'economia sia diversificata, i lavori ben retribuiti nei servizi finanziari rappresentano ancora più di 35% del reddito professionale della città.

The different properties available in New York City

To help you better understand the specific characteristics of this market, our BARNES | WARBURG office remains at your disposal to help you find the type of property that will suit you, at the best location, and at the best price.

The first specificity of the New York real estate market is that it has two main different types of property: condominiums (or condos) and co-ops. There are also ‘Townhouses’?, small buildings of 3 to 5 floors owned by a single owner or divided into apartments.

1 / The Condominums

Being the owner of a condominium (or condo), is similar to being the owner of an apartment in many cities. Upon purchasing, you become the owner of a property. A property deed is transferred to you, then filed in the public registry. You also become the owner of a percentage of the common parts of the building, as well as other owners. The building is usually managed by a managing company appointed by a condo board (similar to a French “syndic”), to which maintenance costs are due every month. In addition, each owner is required to pay a property tax (Real Estate Tax) to the city of New York. However, some condos have a tax abatement program. Do not hesitate to ask us any questions about it.

Condominiums are common in most American cities, but in Manhattan, they only represent 20 to 30% of the total housing stock. Therefore, the majority of properties in New York are Co-Ops.

The advantages of condominiums

  • Flexibility: Each owner can rent his property, sell it, or allow family members or friends to enjoy it relatively freely, in accordance with the building rules enacted by the Board. It is quite simple to apply for a mortgage in a U.S. bank to buy this type of property. U.S. residents may often expect a funding of up to 80% of the purchase price at a good rate
  • Application: In most cases, a potential buyer must file an application and go through a process called Board application. He must provide information about his finance and his past (credit history, reference letters from employers, previous landlords, bank statement,…). Depending on the building, this process takes more or less time (7-30 days), and requires variable amounts of information depending upon the building. Condos are highly sought after by foreign buyers, but also by New Yorkers themselves who wish to retain some flexibility / liquidity of their assets. Some buyers are also moving towards condos to avoid having to provide too much personal information or documents such as reference letters and extensive financial disclosure required in Co-ops. International buyers applications are often rejected by the Co-Ops because they cannot provide all the required guarantees and are often synonymous of turnover that devalues an address. Condos are often the easiest way to invest on the New York real estate market.

Their disadvantages

  • Choice: Because of the preference of foreign investors for this type of property, and the very limited supply of goods available, their prices are often 15 to 20% higher than similar properties governed within a co-op. This is the price to pay to take advantage of the flexibility of this type of investment.

2 / The Co-operative Buildings or Co-ops

Buying a Co-op is still the most common way for long-term ownership in the State of New York (70% to 80% of the apartments in New York are Co-operative buildings). Buying a “co-op” means buying shares in a corporation, which owns the building. The shares of the corporation are held by the people living in the building. This means that all decisions regarding the building must be taken by the “co-op” syndic that affect the community or the property itself (new buyer, hiring, new tenant, resale, work …).

It is up to the cooperative to pay the full amount of the mortgage on the building, property taxes, employees’ salaries and various maintenance costs. In return, the shareholder-owner pays a percentage on total expenses in proportion to its contribution to the cooperative. The amount of this share depends on the size and the floor of the apartment. In Manhattan, prospective purchasers shall provide a 20 to 100% deposit of the purchase price.

“Co-ops” advantages

  • For a building of comparable quality, prices are often 15-20% lower than those of condominiums.
  • Wider range of choice, Co-ops representing a market share of approximately 75% of all apartments in New York.
  • Tax-deductible maintenance fees. Each building is subject to specific taxes. Shareholders may then deduct a portion of the maintenance, which includes the property tax.

Their disadvantages

  • Lack of flexibility: Co-op management approves or rejects an application according to its own criteria without even having to account for it. Buyers and tenants are subject to what may look like a detailed interrogation to prove their income levels and their background (including credit background and personal background). The main task of management is to protect the shareholders interests.
  • “Co-op” management must give permission prior to every major change for an apartment: buying, selling, leasing, renovation.

Financing in the United States

Obtaining financing as a foreign owner in the United States is possible as long as you pay at least 40% of the purchase price in cash.
If you apply for a loan, some steps are added in the transaction process. A survey is necessary if you buy a house (analysis of the lot and boundaries). The bank will send an appraiser who will estimate the value of the property. Insurance is mandatory and will have to be purchased before signing the contract.
We benefit from a wide network of bank and insurance partners who are accustomed to dealing with loans for international clients and we can put you in contact with them.

Main expenses during the Ownership of the property

1/ Imposta di proprietà

Si tratta di un'imposta annuale calcolata in base al valore della proprietà. L'imposta è compresa tra 1,5% e 2% del valore stimato della proprietà (valutato da un perito della contea). Questo valore è solitamente inferiore al prezzo di acquisto della proprietà (da 10 a 30% inferiore).

2/ Common Charges (for a property in a condominium)

Questi costi possono variare e dipendono dall'edificio o dalla comunità in cui si trova l'immobile. Il tuo agente ti farà conoscere le spese condominiali di ogni condominio che vedrai durante le proiezioni. Devono essere confermati al momento della ricezione del rendiconto finanziario del condominio.

A special assessment may be an added charge, in the event of construction or renovation of the building and has to be disclosed by the seller when the offer is made.

3/ Assicurazione (uragano, alluvione, proprietà)

Per conoscere i costi assicurativi possono essere richiesti diversi preventivi ai broker assicurativi. L'assicurazione della casa è spesso un requisito per la chiusura, soprattutto in caso di mutuo. Le polizze vento e alluvione non sono obbligatorie se l'immobile non viene acquistato con clausola di finanziamento.

4/ Contabilità

Sentiti libero di ask us for recommendations di studi contabili e avvocati specializzati in acquisizioni immobiliari e diritto tributario.

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The Owner representation / Property Management

Are you the owner of one or several apartment for rental and you want to make sure to have regular and optimized rental income? When you entrust to BARNES the management of your rental property, you no longer have to worry.
BARNES real estate consultants are rental and property management experts in New York. Our agents are experienced with a true knowledge of the local real estate market and a comprehensive expertise to perform all property management tasks and assist you with every technical, legal, and tax requirements related to your assets.

1/ Why you should entrust BARNES to manage your assets?

a. Your property will benefit from our expertise to rent at the best price

We will estimate the rental value of your property, based on a central file that lists the prices of
properties recently leased and available on the market.

b. Your property will benefit from a comprehensive marketing plan for quick rental

Utilizziamo il database dei clienti BARNES che ci consente di pubblicizzare la tua proprietà a una base di clienti internazionale. Mostriamo la tua proprietà in una varietà di media per un noleggio veloce al miglior prezzo. Senza indugio, studiamo attentamente le domande degli inquilini per affittare nelle migliori condizioni.

c. You are free of all administrative and legal constraints

Our American lawyers prepare for you a secured lease in compliance with the latest local regulatory and legal developments. We collect rents, charges, and deposits. We pay the charges and taxes.
We help you to chose professionals for any technical, legal and tax requirement concerning your property (relations with administrations, government agencies, insurance companies,…).
We update you regularly and precisely on our management activities.

2/ Our Services

a. Rental packages

  • Apertura conti (elettricità, acqua, internet, telefono, cavo)
  • Tenant profile and history checking.
  •  Inventario, in/out
  • Riscossione canoni, tracciabilità dei pagamenti e applicazione di penali in caso di ritardo
  •  Troubleshooting and repair organization (leaks, air conditioning, electrical appliances,…)

b. Administrative Package

  • Pagamento: fatture, spese condominiali, mutuo, tassa di proprietà, assicurazione…
  • Quarterly accounts shipping.
  • Availability and efficiency of the application process.

3/ Our team is also at your service for specific needs

  • U.S. tax return follow-up together with an accountant
  • Any request and additional travel will be charged per hour (moving in and moving out follow-up, furniture storage, furniture purchase and delivery, various work supervision).
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