Jackson Heights Life

I recently moved to NYC and am not particularly knowledgeable of the real estate climate here. I want to buy a condo in JH, but not sure if it's a wise investment since I plan to move out of the city in 3-4 years. My questions are, how well do the property prices appreciate in the JH area? I don't want to spend lots of money making mortgage payments only to see the property value at par or below the purchase price when I leave. Any help would be appreciated.

This really isn't the climate in which to flip properties; short term you're gonna be safer renting. It's a pretty good rental climate, a lotta folks are having trouble moving co-ops and condos and are sub letting, so there's a lot of choice out there.

If I buy a condo and get a roommate or two, that may soften the blow to my wallet.

I would never buy based on the possibility of a roommate.  A lot of today's foreclosures are the result of the owner losing a roommate/tenant.  Moreover, while a condo may allow a roommate, coops are more touchy about it.  I believe NYC law allows an adult to have a roommate, even in a coop.  However, the board may not let you purchase the unit if they are aware of your intentions.

With respect to your buy/rent question, it all depends.  There are definite tax advantages to buying and, yes, the money is not going to some landlord.  But there are also a lot of other "hidden" costs for the owner, such as assessments and insurance.  Also, future home prices are unpredictable and considering today's economic climate, and as Mike V. points out the prospect of higher mortgage rates, I wouldn't count on much of a return after just 3-4 years.  Of course, you may fall in love with us and stay for the rest of your life, in which case I would recommend buying. 

I am a happy co-op owner and there are certainly many advantages to ownership.  But for someone with short term horizons, I have to agree renting is probably the best bet.
 
Based on a standard amortization schedule for a thirty year mortgage, the vast majority of the monthly mortgage payment will go to debt service for the initial 3-4 years of ownership -- very little to paying down principal. So your monthly payments really are not a meaningful financial investment in the future until you are a good ten-fifteen years into the process. 

As for appreciation, while no one knows for sure, I think it’s unlikely that we’ll see substantial appreciation in property values over the next several years. There was a very dramatic escalation in JH real estate prices a few years back -- but I think much more modest value increases are likely to be the norm for the next few years (and there is at least a possibility of a decline, depending on how the national and local economy does over the next couple of years). 

Add to that the substantial transaction costs associated with both buying and selling -- as well as the fact that when you are at a point in your personal life when you are ready to sell and move on, you will nonetheless have to continue making mortgage and maintenance payments on the property until you find a buyer (which could take some time).

I am a happy co-op owner and there are certainly many advantages to ownership.  But for someone with short term horizons, I have to agree renting is probably the best bet.
 
Based on a standard amortization schedule for a thirty year mortgage, the vast majority of the monthly mortgage payment will go to debt service for the initial 3-4 years of ownership -- very little to paying down principal. So your monthly payments really are not a meaningful financial investment in the future until you are a good ten-fifteen years into the process. 

As for appreciation, while no one knows for sure, I think it’s unlikely that we’ll see substantial appreciation in property values over the next several years. There was a very dramatic escalation in JH real estate prices a few years back -- but I think much more modest value increases are likely to be the norm for the next few years (and there is at least a possibility of a decline, depending on how the national and local economy does over the next couple of years). 

Add to that the substantial transaction costs associated with both buying and selling -- as well as the fact that when you are at a point in your personal life when you are ready to sell and move on, you will nonetheless have to continue making mortgage and maintenance payments on the property until you find a buyer (which could take some time).

Thank you for the detailed info. Maybe I'll buy a property and when I move out will rent it to my relatives instead of selling it. Are co-ops really strict on roommates, subletting, or renting?