I own a condo in NY (Queens borough) since 2002 that I’ve lived in and still live in for most of those years since. From that perspective its been good for me. However, I purchased a condo specifically to have flexibility with renting when and if I needed to. I had moved out for a few years but had to return and I then had to deal with my tenant who would not get out and so it turned into a whole eviction process. An eye opening process especially here in NY.

I know that I want to move on from living in the condo as I have contemplated a change for a while. I’ve lived here many years and feel its just time for a change. Additionally, my immediate family who live in pretty close proximity to me (Parents & brother) are all moving to Florida soon. Being close to them was a pretty good reason to be nearby but with them leaving, that’s one less reason to stay where I’m located specifically. With that said, I have been on the fence about my options:

#1) Sell the Condo – Sell it outright and use the proceeds to rent temporarily somewhere until housing prices cool and buy then or buy investment property

#2) Rent the Condo – This would mean I move out, buy a new house but keep the condo and rent it again

In either scenario, I would be moving to Long Island, NY to be closer to my kids. There are pros and cons for each option which I will spell out below. I have been leaning towards a sell and getting out before what seems like an eventual downturn in the market. I want to make a decision by June2023 which is less than a week away

Year of Home Purchase 2002

Year of Home Mortgage Payoff 2032

Mortgage Payoff Amount ~$54K (Slightly under)

Unit 2 BR / 2 Bath + Balcony (1050 sq feet)

Building Complex 5th Floor of a 6 Story Condo (Part of a 2 Building complex)

Note: Refinanced to a better rate when 20 yrs was left on mortgage to a 20 yr loan (rate of 3.875%)

Financical Stats:

Costs While I Live in Condo

Mortgage (PITI): $933.00 + HOA: $1,256.00 = $2,189.00

PITI (Principal/Interest/Taxes/Insurance) per month

Note: Mortgage is inclusive of PITI (Principal / Interest / Taxes / Insurnace)

Note: HOA Covers Building Insurance, Super/Porters; Garbage/Snow Removal/Landscaping/Cleaning of Interior & Hallways; Covers Water Usage & Home Heating/Cooking (per month)

Costs If I Rent Condo (Includes expenses above plus these additional ones)

Condo Costs: $2,189.00 + Condo Sublet Fee: $250.00 + Vacancy: $183.00 + Renters Insurance: $10 = $2,632.00

Note: The Condo requires a $250 sublet fee if I rent out my unit; They do this to discourage rentals and keep units mostly owner occupied

Note: Vacancy per month equals the monthly cost (1/12) of 1 months rent

Decision - Keeping Condo & Rent It

Pros

Through Rental, tenant will pay off my mortgage over time (10 years remain)
In 5 years when the mortgage is down to half amount for example, I will prob have the flexibility to just pay the remainder outright and have a unit free and clear

Cons

The maintenance costs are a bit crazy to me but not necessarily out of the norm; There is an assessment that has just been levied for some major repairs and a 10 year loan has been taken out to do the repairs and minimize the per unit owner cost to a manageable size; That assessment is increasing maintenance to $1,256 p/month. A lot more than my PITI costs combined.
The condo charges a $250 sublet fee for renting out my unit; That would bring my total monthly expense over $2600; Based on what I researched I could get for rents in this area, not sure I can get $2600; Even if I could I would just be breaking even with no cash flow; Wont include amount needed for potential vacancy; The sublet fee kills my flexibility

Decision - Sell Condo

Pros

Would probably get top dollar on sale of home selling now; if there is a downturn it can be MANY years before I can get the money I would be able to get now (anticipate $425k to $450k)
Sell and use part of the money to buy new home for myself and/or use the money on alternate investment(s)
Keep the money liquid for opportunities that come up in the next 1 to 2 years
Free myself from the politics of the condo board and how the complex operates; A lot of the issues are financial in that over the years money has been collected and not well managed or spent which is why HOA fee is so high; this provides a level of inflexibility on managing expenses which I have limited control over

Cons

Don’t have that much left on mortgage; selling now would mean investing elsewhere via new long term mortgage at todays higher interest rates (albeit at smaller mortgage amt since I would be able to put down a larger down pymt); Additionally, at todays market prices, I would not be able to get a unit like this one for the price I paid over 2 decades ago and for the interest rate I have now
I have been wanting to build a real-estate portfolio and my thought has been that this would be my 1st unit in that portfolio and I should keep it & build from there; Selling would mean starting from scratch instead of building; However is this Condo Unit really a good investment?

I'm hoping the amount of info I posted doesn't turn anyone off from responding. I tried to give the full story so that you knew where I was coming from. Again your insights and comments are welcome!

New York City, New York

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