Buying an Apt. in New York

R

Ron J

Registered User
Messages
58
Thinking of buying in NY. Have been advised that best option is to get a % of cost by way of a Mortgage in NY and to finance rest from equity here in Irl. Told that thats the best way for tax purposes also ??? I can finance full amount from equity if need be. Confused on how best to proceed. US mortgage rates are 6%+ at present & property prices appear to have dropped recently. Mortgage houses here won't do security on a US property either. Anyone any advice.
 
First post, Ron J? I'll wager you'll be asked a few more "particulars" before anyone here can/will venture any sensible advice...

(a) You live and are tax-liable in Ireland, right?
(b) What are your other assets/liabilities? Do you own a PPR here already?
(c) Why NY, particularly?
(d) Have you used the facility to check for previous posts on the ins and outs of this kind of "overseas property investment" scenario?
 
US mortgage rates are 6%+ at present & property prices appear to have dropped recently.
Click to expand...


Given that prices of condos are falling in New York can I ask why you are considering buying Ron ?
 
DrMoriarty & Duplex

Thanks for interest. In reply
(a) correct (b) assets - own home circa 500k value & liabilities of 290k. (c) frequent trips to family residing there & favourable exchange rate.

Cost of apt. in NY is 185k USD which at this mornings rates is 153,610E.
Rental income in NY on this apt is estimated at circa 1,500USD pmth.
Unsure whether I'll rent it out or keep as a "holiday home" type property.
Advice is that market will recover very soon. Hurricane Rita knock on problems & rising interest rates there have slowed everything. Maybe I'm being naieve but I look on NY as a buyers market at present and was looking to get in when prices are low & ex. rate is favourable. Just unsure as to the best route to take ie: 50-50 situation ( 50% mortgage from US & rest by way of equity release here - % can be varied of course) or 100% equity release here. I'm told that lenders here won't do security on a US property so this rules out a seperate mortgage secured on the NY property.
 
I think you should do a little more research prior to buying in the States, verify the likely rental income, get solid figures on property taxes, voids etc. This report by PMI a mortgage insurance company is worth a read as they have no axe to grind,

[broken link removed]
 
had a read of the article Duplex. Despite recent rate increases, mortgage demand there is still v high & new houses stsrts is at an all time high. Big swing to interest only mortgages in US recently which is fuelling the market.

I'm still drawn to it. I have checked out the tax situation. We have a double taxation agreement with the US. taxation situation is quite similar to here with tax due on rental income(if I go that way) etc. Insurance much the same rates as Irl..

My big dilemma is whether to go the equity only route or to take out a mortgage in NY at rates of 6.1% for a 30 yr.. Same rate applies for 5 yr. interest only. Was thinking of a mortgage of 120k USD with rest from equity here. That will cost me 600USD p mth interest only. Can't get a mortgage lender here to take security on the property.
 
Ron J said:
Advice is that market will recover very soon.
Click to expand...

Advice from whom? I trust not from the interests involved in selling the property....


Ron J said:
Hurricane Rita knock on problems & rising interest rates there have slowed everything. Maybe I'm being naieve but I look on NY as a buyers market at present and was looking to get in when prices are low & ex. rate is favourable.
Click to expand...

Anything I've read online would suggest NY is far from being a buyers market. As far as the exchange rate is concerned while it's now at roughly 1.20 it's only last year it was heading to 1.40 and most analysts would suggest eventually thats the direction it must head again (US current account deficit etc. etc.).

To be honest you sound like you've already made your mind up and are simply interested in the 'how' as opposed to the 'if' of the purchase.

(Btw an $18000 per annum gross income from a $185000 apartment sounds wildly optimistic to me, where exactly are these apartments or can you provide a link to the development?)
 
Eurofan.

Its just an apt in an existing buliding in NY - not a new development. Excuse my ignorance - your ref to "Btw an $18000 per annum gross income" - what does btw stand for??

Im really trying to figure out what the best way to proceed is ( if I proceed) - appears the only way forward is one of 2 - all equity release from here or mortgage of x% in US & balance from equity here.

As I'm a 1st time investor I'm concerned about doing it right if I move on it. Am I missing something obvious ? Are the pitfalls ie; exchange rate moves, tax issues, interest rates etc etc

If I go with all equity from here and want to sell or refinance the apt in a few years - is there a problem?

New to the game and any advice is appreciated.
 
Ron J said:
Am I missing something obvious ? Are the pitfalls ie; exchange rate moves, tax issues, interest rates etc etc

If I go with all equity from here and want to sell or refinance the apt in a few years - is there a problem?
Click to expand...

I'm no expert, but if the rate of exchange goes back up towards $1.40, the value of your property would be worth less (in Euros) than you paid for it. You will always be exposed to currency flucuations.

I don't imagine that the source of finance would be an issue if you ever wanted to sell. A lender here will simply want to be paid.

Having available equity doesn't make someone rich. It merely increases their borrowing capacity. Tapping into available equity in your private house is a dodgy way of financing an investment. Worse case scenario - if the exchange rate worsened and the rental market slowed up, could you continue to pay for the property without the lender knocking on your door seeking repossession of your family home.

If yes, then it might be worth considering. Otherwise, it might be a risk too far.
 
In addition to the above question regarding repayment capacity in the event of a downturn could you confirm where the 'advice' you received is coming from?

Also where in New York precisely is the apartment since as I alluded to earlier $1500 a month rent from a $185k apartment sounds optimistic to me.
 
You must log in or register to reply here.
Back
Top