Nikki’s Notes: How do we buy a place for our college-age child now that will be our pied-à-terre later?
- Decide whether to prioritize proximity to your child's university or where you'd eventually want to be
- Work with a broker who knows which buildings allow non-occupant buyers, pieds-à-terre, and subletting
Most co-ops shy away from these scenarios, but condos are generally pricier—so it often comes down to your budget.
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We're buying an apartment for our child to live in while they attend college in NYC. Later, it would become our pied-à-terre. What kinds of issues should we be aware of?
This dual-purpose scenario is becoming more common in New York City, given the steep cost of renting and Gen Xers looking to enjoy their “empty nester” years here.
That said, it can still be tricky because it raises two potential hurdles—buying a place for your child, who will not be financially responsible, and buying a place where you will not reside full-time.
You may also want the freedom to sublet the apartment when your child isn't there, such as after graduation.
These scenarios significantly narrow the potential market because many co-ops do not allow them, says Nikki Beauchamp, a broker at Sotheby's International Realty with over two decades of experience representing buyers and sellers in New York City. Co-ops also far outnumber condos in the city and are less expensive.
On the bright side, now is a good time to begin the process so you can close and make any updates before the fall semester.
Here's Beauchamp's advice for navigating the search.
Pick the location
The key question here is whether to prioritize proximity to your child's school or where you'd eventually like to spend time.
Beauchamp points out that parents used to limit the search to the Upper East or Upper West Side—both classic pied-à-terre neighborhoods—but have increasingly leaned into their kid's desire to live within a five- to 10-block radius of the university.
But you may end up being priced out of all of these areas.
"I encourage being open to multiple locations beyond your top picks," Beauchamp says. These need to be part of an initial family discussion—as in, "If it's the difference between living in a postage stamp-sized place and being able to walk to school versus having more space and hopping on the subway, you (dear child) are going to hop on the subway."
Ultimately, the push and pull is between providing the optimal college experience and getting the most out of a long-term investment, especially since parents often wait to buy until after the first one or two years to make sure their child will remain at the school.
On that note, it's worth considering your kid's post-grad plans. If they want to stay in the city, you may compromise a bit more on the target address.
If not, you may well decide to find a place near Central Park and Museum Mile—or whatever your favorite destinations. For sure, the UES is known for pied-à-terre-friendly buildings, but Beauchamp says most Manhattan neighborhoods are fair game depending on your budget and whether you want to be in a charming prewar building or a shiny new development.
Weigh the pros and cons of condos vs. co-ops
The biggest obstacle is when parents are 100 percent fiscally responsible for the occupant, unlike when a parent is co-signing or acting as a guarantor for an adult child who is earning an income. Condos allow this kind of purchase, while many co-ops do not.
The same goes for pied-à-terre purchases. According to Beauchamp, some co-op boards still believe the only way to build community is for residents to live there full-time, but since the pandemic, a growing number are allowing them outright (stating so in the listing) or on a case-by-case basis.
Still, focusing on condos is hands down the path of least resistance. Problem is, condos are more expensive than co-ops (with higher carrying costs), and you pay more for less space.
"If your budget for a one bedroom is $500,000 to $800,000, you are probably not going to be able to afford a condo," she says.
Co-ops often have restrictions on foreign buyers, too, in case you’re not from the U.S.
So, if you are limited to co-ops, working with an experienced broker can help, as they typically know which co-ops are amenable to both of these scenarios. In these cases, your broker can engage with the listing agent to learn whether this has happened before or is something that might be considered—maybe the seller knows the board president and can ask preliminarily.
"All you need is a maybe, and I highly recommend finding out as much as possible before a showing because it is very difficult to let a place go once you fall in love with it," Beauchamp says. "No one wants to be knee-deep in everything and learn the answer is a hard no."
That's especially true if you plan to sublet the apartment at some point, a policy most co-ops frown upon. For example, your kid may decide to study abroad for a year, or you may want to generate income for one or two years to help fund your retirement.
"It's important to know the rules because of all the what-ifs," Beauchamp says, adding that if paying roommates are going to be in the picture, she would steer clear of co-ops and stick with condos.
Applying to a co-op
If budget or personal preference dictates buying a co-op, then you'll need to get your package approved by the board.
"It's all about telling your story and explaining why you are making this purchase," Beauchamp says.
Recent clients used this pitch: "We are delighted to help our child get settled in the world as they attend college but we are also very much looking at the place for our long-term use because as a family we love NYC and all it has to offer."
You'll also need to present your college-age child as a responsible student who is not going to throw raucous parties. Have them be part of the all-important board interview and gather reference letters.
"There's an art to including people who know you as fine, upstanding citizens but also as parents—even better if the references know the child and the family unit and can attest to both," Beauchamp says.
Some buildings may request letters from the actual buyers and occupants (meaning you and your child), too.
Keep in mind co-ops impose more stringent post-liquidity rules than condos, so talk to your financial advisors to know your options early on. This way, you can avoid the hassle and potential heartbreak by instead finding a suitable condo within your budget.
Nikki Beauchamp is a multilingual real estate advisor at Sotheby’s International Realty with over two decades of experience representing buyers and sellers in New York City and globally. Known for her data-driven approach and market expertise, she provides clients with valuable insights to make informed decisions. Beauchamp is an active member of the Real Estate Board of New York, currently serving as co-chair of the New York Residential Specialist executive committee. To submit a question for this column click here. To reach Nikki call (212) 606-4152 or contact her via her website.
