Buy Curious: Is it possible to find a 2-bedroom in NYC with sublet potential for $1.2 million?

Real estate broker Beth M. Hirsch of Brown Harris Stevens advises this week’s Buy Curious property hunter—a man looking to buy the perfect NYC 2-bedroom while living overseas.

THE WISH LIST:

“I’m currently living abroad, but planning on coming back to New York City within the next few years. While interest rates are low, I’d like to buy a 2-bedroom.

My budget is around $1.2 million and I’d like to be able to sublet the place before I'm ready to move in. I’m happy anywhere in brownstone Brooklyn, Upper East Side, Upper West Side or downtown if I can afford it.”

THE REALITY:

Buying now in anticipation of moving in later can work in your favor. In addition to keeping ahead of an upswinging market, you can take advantage of the current low interest rates you mention. Locking in your housing costs now and knowing what they will be in a few years can take a good deal of the stress out of your move.

Whether you are in town or abroad, your search starts online. To get the feel of a neighborhood, use the Street View feature of Google Maps. (Click on the “Look Right” or “Look Left” arrows to see the building’s façade and up and down both sides of the street. Use the “Search Nearby” feature to view the surrounding blocks.) Once you have narrowed your search to a few neighborhoods, the next step is to find a broker who comes highly recommended and knows the market well. Your broker can help you focus your search further.

Many of the apartments in your price range are located in brownstones and will be co-ops, which won’t work for your purposes: Although there are some super-liberal co-ops that follow condo rules, most impose specific limitations on subletting. You may be required to move into the apartment for at least a year before renting it out and the board will have to approve the length and terms of all leases, including renewals. Generally, subletting will be limited to 1 or 2 years in a 4 (or more) year period, but some co-op boards may not permit it at all.

To ensure you will be able to rent out the apartment for a few years before moving back to New York, I’d advise limiting your search to condos since they generally allow unrestricted subletting. (Before submitting an offer, make sure to have your broker review the condo rules just to be sure.) In today’s market it will be challenging but not impossible to find a 2-bedroom condo for $1.2M. You may find good value on the outer edges of your favorite neighborhoods. Try to inject some flexibility into your wish list and remember to keep an open mind.

Although a property needing work may seem to offer good value, it will be all but impossible to economically supervise renovations from abroad, so look for an apartment in move-in condition. New or freshly renovated kitchens and baths are always attractive to tenants, allowing you to achieve a higher price for your rental. Look for a location close to public transportation. Not only will this benefit your property value but it will make your (and your tenant’s) everyday life a lot happier.

Once you have a list of possible apartments, focus on purchase price, of course, but do take note of the monthlies. Add the common charges and real estate taxes to your mortgage payment to determine the affordability of each property. Research rents for comparable apartments and do the math to make sure your investment will be profitable. 

Although you can educate yourself online, purchasing an apartment requires some boots on the ground time. Prepare yourself for an upcoming visit by asking your friends or your broker for referrals to local mortgage brokers and real estate attorneys. Reach out to them from home to see who you would like to represent you. Then hop on a plane and come find your dream home.

With your budget of $1,200,000 and a bit of flexibility you will discover some interesting options. Start off in Brooklyn with these two listings in brownstone-rich neighborhoods, each within a few blocks of an iconic park:

• Park Slope 2-bedroom/2-bathroom condo, $1,250,000: Although it’s a tad higher than your $1.2 million budget, this parlor-level condo at 932 President St. between 8th Ave. and Prospect Park West has high ceilings, central air, private laundry, a wood-burning fireplace in the master bedroom and a kitchen with granite countertops. No renovations are required, which will make this a relatively easy property to manage from abroad.
• Fort Greene 2-bedroom/2-bathroom condo, $1,099,000: This condo at 230 Ashland Pl. between Fulton St. and Dekalb Ave. boasts a stainless steel gourmet kitchen, a washer/dryer closet and two spa-like baths in a building with a concierge, fitness center, live-in super and common roof deck garden. It’s also a hop, skip and a jump away from both Fort Greene Park and Atlantic Terminal, which should make it more attractive to prospective tenants.

In Manhattan, downtown may be beyond your reach but if you are willing to sacrifice some square footage and a 2nd bathroom, you should take a look at these listings on the Upper East Side and Upper West Side:

• Upper East Side 2-bedroom/1-bathroom condo, $1,150,000: This condo at 215 East 80th St. between Second and Third Aves. has a large living/dining room area, a renovated kitchen, a bar area and a variety of custom built-ins in a full-service building that recently renovated its common areas. But it does only have the one bathroom, and the second “bedroom” is set apart from the rest of the apartment by a set of glass doors, which might make it more an office than a private bedroom.
• Upper West Side 2-bedroom/1-bathroom condo, $1,175,000: Located at 230 Riverside Dr., between W. 95th and W. 96th Sts., this corner 2-bedroom in a restored pre-war building has high-beamed ceilings, hardwood floors, and a chef’s kitchen and bathroom that were recently renovated. It’s just steps to Riverside Park and two blocks from the 1, 2 and 3 trains—convenient for you or your tenants to get to work or go out and play.
• Upper West Side 2-bedroom/1-bathroom condo, $1,195,000: This renovated pre-war condo at 250 W. 88th St. between Broadway and West End has a master with California closets, a marble bath with a European glass shower, hardwood floors throughout, and a kitchen that features new stainless steel appliances and black granite countertops. Manned 24 hours a day by a doorman, the building is close to both transportation and Central Park—always pluses for prospective subletters.

Buy Curious is a weekly column in which NYC real estate brokers help buyers develop a realistic search strategy. Want some advice on your search? Send us your wish list.