First time home buyer in Queens, NY

[Gina Medayil]

Hi BiggerPockets Family! I'm new to real estate and am looking to purchase my first home in Queens, NY. Due to high property prices in the area, I am looking to get a co-op unit and then sublease it after 2-3 years. I am considering multiple areas in Queens. I am trying to hone into a particular area. Astoria is the ideal location but pretty pricey unless you get a place in the Acropolis, but after doing some research it seems like the cooperation is going through some struggles and may be a risky investment (not even sure if a bank would give a loan for a coop in the Acropolis). I'm trying to stay around 350K. A two bedroom for this price in Astoria seems very hard to find and am not sure if a one bedroom is worth the investment if the plan is to lease the unit out in a few years and have it as a rental income. Does the BiggerPockets community have any advice or recommend a real estate agent that could help me with my goals? 

[Abel Curiel]

Originally posted by @Gina Medayil:

Hi BiggerPockets Family! I'm new to real estate and am looking to purchase my first home in Queens, NY. Due to high property prices in the area, I am looking to get a co-op unit and then sublease it after 2-3 years. I am considering multiple areas in Queens. I am trying to hone into a particular area. Astoria is the ideal location but pretty pricey unless you get a place in the Acropolis, but after doing some research it seems like the cooperation is going through some struggles and may be a risky investment (not even sure if a bank would give a loan for a coop in the Acropolis). I'm trying to stay around 350K. A two bedroom for this price in Astoria seems very hard to find and am not sure if a one bedroom is worth the investment if the plan is to lease the unit out in a few years and have it as a rental income. Does the BiggerPockets community have any advice or recommend a real estate agent that could help me with my goals? 

 Hello Gina, 

That co-op is certainly experiencing some challenges so I'm glad to hear you looked into it. Super attractive when you look at it online b/c of the price point and location but if a deal is ever 'too good' to be true, theres a reason!

That being said, there are other areas in Queens with <45 minute commutes to NYC, have apartments under $350K and have 2 bedrooms. The main issue here is that many of those co-ops do not allow subletting at all OR only allow it on a limited time basis (i.e. owners have to move back into the unit after 1-5 years of subletting). Coops (and Condops) in the higher price points (i.e. 500K+) have more flexible subletting rules. 

While finding a sublet-friendly building in that price range is possible, I'd recommend anyone looking into a co-op to also consider house hacking. While $350K is a more affordable price point than a multi-family in the $750K+ range, there are some benefits to a MFR vs. Co-op in the New York market - specifically Bronx, Brooklyn, Queens and Long Island.

Since co-ops oftentimes require 20% down payment plus 6-12 months reserves (after closing), this can amount to over $80K in your $350K purchase price scenario. That same 80K can be a 10% down payment for a multifamily unit in which your portion of the mortgage could be half of what you'd pay for mortgage + maintenance in a co-op. 

The other benefit to the house-hacking route is that YOU control the asset and the rules. In co-ops, you may be able to sublet this year BUT the board can always change their policy.

Pros to purchasing a co-op: 

- You aren't responsible for cap ex

- Maintenance department usually handles any plumbing, electric, heating and gas issues

- Your loan amount will be considerably lower than that of a MFR investment

I hope this was helpful!

Best,

Abel