The Pros and Cons of a Ground Floor Apartment in NYC
When it comes to renting or buying an apartment in New York City, there are a lot of important factors to consider. You have to think of the neighborhood, your commute, and what kind of apartment you want. And one of the most important considerations when searching for apartments is weighing whether you would consider a ground floor unit or not. Some people love them, while others would never consider a spot on the street level if they live in Manhattan. Below, we outline some of the pros and cons to help you decide if that ground floor apartment listed for sale is right for you.Photo by Christian Koch on UnsplashWhat is a ground floor apartment?A ground floor apartment in New York City is the first floor of a building, and it typically overlooks the street. In some cases, the ground floor apartment may be below street level, with stairs leading down to the front door. Ground floor apartments are usually less expensive than those on higher floors, but they can be noisy and may not have as good of views. Some apartments, like the first floor of a brownstone, sit slightly above the street. Spaces like this provide a perfect view for people watching as folks go about their day in the Big Apple. Pros of a ground floor apartment in NYCLower pricesLess flights of stairsGarden or courtyard accessLower pricesWhen it comes to NYC real estate, the lower the floor, the lower the price. There are a few reasons for this. First of all, ground floor units are often smaller than those on upper floors, and they may not have as many features or amenities. Additionally, ground floor apartments may be less private than units on higher floors, and they may be more susceptible to noise from street traffic or neighboring businesses. You are also going to hear all the comings and goings of people throughout the day and night. Plus, depending on the construction of the home, you may end up hearing each step taken by your upstairs neighbors. For these reasons, ground floor apartments tend to be less expensive than those on higher floors. However, they can still be a great option for budget-minded renters or buyers who don't mind a little extra noise.Less flights of stairsPart of living in NYC is dealing with stairs. You face them on the subway and you can certainly face them in the home. Anyone who has lived in a fifth floor walk-up apartment can attest to the difficulty of move-in day when you have to lug furniture up several flights of stairs. That is why one of the main advantages of a ground floor apartment is that you won't have to deal with as many stairs. This can be especially convenient if you are coming and going a lot, have large items to move in or if you're carrying groceries. But of course, many buildings offer elevators and the benefit of being on the first floor means you do not need to wait for an elevator to take you up to your floor.Garden or courtyard accessGround floor apartments sometimes have private outdoor spaces that can take the form of garden spaces, backyards, or patios. In a bustling city like NYC, you can’t deny the benefits of having outdoor space like fresh air, natural light, and the ability to garden. Not many people in the city are able to invite a host of people over and have an outdoor oasis to entertain them in.Overall, the benefits of having outdoor space usually outweigh the downsides. If you're looking for an apartment with outdoor space, be sure to ask about the floor level when you're touring potential units.Cons of a ground floor apartment in NYCLess privacy and more street noiseGreater risk of break-insGreater risk of floodingPotential for unwelcome crittersLess privacy and more street noiseOne downside of living on the ground floor is that you may have less privacy than if you were living on an upper floor. Your windows are at or just slightly above eye-level, so while you can people watch to your heart’s content, folks on the street can take a peek in at your place, too. Luckily, a nice set of blinds, shades, or drapes go a long way to ensure privacy and safety. Greater risk of break-insStreet level apartments are usually the first choice for thieves looking to break and enter because of easier access to windows and doors. Thieves don't typically scale tall buildings, so the further up you live, the less of a target your apartment is. However, this doesn't mean that break-ins can't happen on upper floors - it's just less likely. If you live on an upper floor, be sure to keep your windows and doors locked at all times. If you are planning to buy or rent a ground floor unit, you should consider investing in a security system as an extra precaution. You can also secure yourself a home insurance policy to help give you peace of mind if anything were to happen. Greater risk of floodingGround floor apartments have a greater risk of flooding than apartments on higher floors for a few reasons. First, if you remember the 2021 super storm, most of the damage and flooding in the city occurred on the ground floors of buildings. This is because the water rose quickly and had nowhere else to go but into the ground floors of buildings. Potential for unwelcome crittersLiving at street level or on the first floor, there is a higher risk of unwelcome critters finding their way in to your home. This is especially true if the entry door to your apartment is near trash and recycling cans that attract bugs, mice, or even worse - rats.Be sure to keep your doors closed, make sure your windows have sealed screens, and speak to your building super about any other preventive measures to avoid any unwanted guests.Interested in buying an apartment in NYC? Browse listings and see how much you can save with Prevu's Smart Buyer Rebate.
NYC Tax Abatements Guide - 421a, J-51 and More
If you started your search to buy an apartment or home in NYC, you’ve likely come across countless mentions of tax abatements in the various listing descriptions you’ve read online. Whether or not you are familiar with the concept of property tax abatement in NYC, you would probably prefer to pay less in property taxes if possible.For that very reason, below the team from Prevu Real Estate compiled a NYC Tax Abatements Guide for buyers to learn more about these cost-saving property benefits - including most widely known real estate tax abatements and exemptions.What is a property tax abatement vs exemption in NYC?A residential tax abatement program is a reduction of a real property tax bill, often referred to as a tax break, imposed on specific properties by a local government like New York City. Typically, the goal of these programs is to encourage development or renovation of residential properties in specific areas of the city.Proponents of tax abatements argue that real estate tax abatements create construction jobs, revitalize neighborhoods, and increase the tax base in a region by creating additional affordable housing units for residents. Critics contend that abatement programs have the potential to spur rampant development which in turn may cause long-term owners and residents to be driven out of communities.On the other hand, real estate tax exemptions are a reduction of a property tax bill for specific property owners that meet certain requirements - including household income thresholds or other requirements. In most cases, property owners need to apply to receive such tax exemptions.What NYC tax abatements and exemptions are available?There are various types of tax abatement and exemption programs to be aware of in New York City. The most common abatements discussed by apartment buyers are 421a, 421g, J-51, the co-op and condo tax abatement, and the condominium property tax abatement. Additionally, the most common tax exemptions discussed are STAR, Enhanced STAR, and SCHE exemptions.Types of tax abatements and exemptions in NYC421a abatement421g abatementJ-51 exemption and abatementCooperative and condominium tax abatement Eco-friendly abatementsSTAR, Enhanced STAR exemptionsSCHE exemptionVeteran, Good Samaritan, and Clergy exemptionsWhat is a 421a tax abatement?The most widely discussed tax abatement NYC buyers benefit from is the 421a tax abatement. The reason for this is that today there are almost twice as many buildings receiving 421a abatements compared to the next most common type of residential abatement.The 421a program dates back to 1971 and derives its name from the section number of the New York Property Tax Law. The original goal of the program was to encourage real estate developers to construct multi-unit residential buildings thus creating more affordable housing throughout New York City. The 421a program requires a minimum of 20% of units to be designated as affordable units.The 421a tax savings last between 10 years and 25 years depending on approval. The New York City Department of Housing Preservation and Development (HPD) administers the 421a program.The program is associated with housing preservation and has a significant impact on affordable housing development in New York City.Term lengths of 421a tax abatements and codes10-year term (Code 5110, 5117)15-year term (Code 5113, 5118)20-year term (Code 5116)25-year term (Code 5114)421a tax abatement benefitsThe key 421a tax abatement benefit in NYC is the reduction in property taxes you owe for the term of the program. The longer the term of the abatement (i.e. 10 years vs. 25 years), the larger the savings you receive during your period of ownership. The post-construction tax benefits phase out over time based on a set schedule, and the property becomes fully taxable upon expiration of the abatement.In order to understand the true benefit of a 421a abatement, you need to know the original term of the building’s abatement and when the abatement will expire. This will allow you to understand which phase out schedule applies before your taxes return to normal. Ask your real estate attorney to verify the 421a tax abatement expiration before you sign a purchase contract.How are 421a tax abatements in NYC calculated?The amount of a 421a abatement is determined by the percentage of property tax that is abated in the benefit year. For all term lengths, the abatement percentage starts at 100% in benefit year 1 and phases out based on a set schedule over the 10-year, 15-year, 20-year, or 25-year term. Following the expiration of the abatement term, the property is considered fully taxable. You will be able to fact check tax abatements during your due diligence with you real estate attorney via property records and information provided by the managing agent.In the grid below, the post-construction phase out schedule is shown for each 421a abatement term length.Benefit Year10-year Term15-year Term20-year Term25-year Term1100%100%100%100%2100%100%100%100%380%100%100%100%480%100%100%100%560%100%100%100%660%100%100%100%740%100%100%100%840%100%100%100%920%100%100%100%1020%100%100%100%11Fully Taxable100%100%100%1280%100%100%1360%80%100%1440%80%100%1520%60%100%16Fully Taxable60%100%1740%100%1840%100%1920%100%2020%100%21Fully Taxable100%2280%2360%2440%2520%26Fully TaxableWhat is a 421g tax abatement?The 421g tax abatement was a relatively new program compared to 421a. Beginning in the mid 1990’s, the 421g program provided property tax incentives to encourage the conversion of commercial buildings into residential space in Downtown Manhattan. Specifically, these conversion projects are occurring below City Hall and south of Murray Street in Tribeca.Abatements under 421g lasted 12 years for non-landmark buildings and 13 years for landmark buildings. Property taxes on non-landmark buildings were fully abated for the first 8 years post-construction and decreased by 20% per year thereafter until the property is fully taxable. Landmark buildings were fully abated for 9 years and decreased by 20% per year thereafter until fully taxable.The deadline for new 421g applications was December 30, 2007 and the last buildings that benefited from these tax breaks are nearing their final expiration in 2020.What is a J-51 abatement?The J-51 tax abatement is unique for many reasons. First of all, the J-51 abatement is rare compared to the more famous 421a program. Second, the J-51 program is a combination of both a tax exemption and a tax abatement. Similar to a 421a, the J-51 abatement is to promote the development of multiple-dwelling affordable housing, however a J-51 is more complex given its structure and is more focused on the renovation of rundown residential properties or the conversion of commercial structures in to residential structures.The mechanics of a J-51 abatement are as follows: 1) a tax exemption locks in the assessed value of the property at the level determined prior to construction or renovation, and 2) a tax abatement then reduces the property taxes owed post construction.What is the NYC cooperative and condominium tax abatement?The NYC cooperative and condominium property tax abatement, commonly referred to as the co-op and condo tax abatement for short, allows the owners of a co-op or condo in NYC to have their property taxes reduced. The reduction percentage is between 17.5% and 28.1% if the owners meet certain requirements to apply for the abatement.The abatement is solely for a co-op and condo owner that uses the unit as their primary residence. If you purchased a condo unit as an investment property, you will not be eligible.Requirements of the co-op and condo tax abatementThe unit must be the owner’s primary residenceThe unit must be purchased prior to January 5th to be eligible for that tax yearThe unit owner cannot own more than three units in a buildingThe unit owner cannot be receiving a J-51, 421a, 421b, 421g, or 420c abatementThe unit cannot be owned by a business entity or trust The unit cannot be located in an HDFC buildingIf the owner of a co-op or condo meets the necessary requirements and is approved for the abatement, the annual property taxes on the unit could be reduced annually by between 17.5% and 28.1% depending on the average assessed value of the unit.NYC co-op and condo tax abatement savings per yearAssessed value $50,000 or less: 28.1%Assessed value $50,001 to $55,000: 25.2%Assessed value $55,001 to $60,000: 22.5%Assessed value $60,001 or more: 17.5%Eco-friendly property tax abatements in NYCThere are two eco-friendly abatements for environmentally conscious installations completed by eligible property owners: 1) green roof abatement, and 2) solar roof abatement.The green roof abatement is a one-time property tax abatement for properties that have green roofs. According to the NYC Department of Finance, a green roof is defined as a roof that has “vegetation that absorbs rainwater, provides insulation and combats ‘the heat island effect’, where urban environments can have higher temperatures than surrounding areas.” The green roof abatement amount is calculated at a rate of $4.50 per square foot of the area considered as green roof space. The abatement is limited to the lesser of $100,000 or the taxes due for the property in that taxable year.The solar roof abatement is a property tax abatement for properties that use solar panels located on the roof of a building as a renewable source of electricity, and potential receipt of such an abatement is determined by the Department of Buildings. Properties that currently receive a 421-a, 421-b, or 421-g tax abatement are not eligible to receive the abatement.Property tax exemptions NYC owners can apply forBasic STAREnhanced STARSenior Citizen’s Homeowner’s Exemption (SCHE)Veteran, Good Samaritan, and ClergyBasic STARThe School Tax Relief (STAR) exemption provides owners of houses, co-ops, or condos in NYC that have an annual household income of $250,000 or less with property tax savings of approximately $300 per year.Enhanced STARThe enhanced version of the STAR exemption provides owners of houses, co-ops or condos in NYC that are 65 years of age or older and have an annual household income of $88,050 or less with property tax savings of approximately $650 per year.SCHEThe Senior Citizen’s Homeowner’s Exemption (SCHE) provides owners of houses, co-ops or condos in NYC that are 65 years of age or older and have an annual household income of $58,399 or less with property tax savings by a reduction of up to 50% on the assessed value of the property.Veteran, Good Samaritan, and ClergyThere are additional exemptions available for owners that are veterans of the United States military, owners that became disabled during a crime or in the attempted prevention of a crime, or owners that are members of the clergy. These exemptions vary in amount.For a full list of tax exemptions and abatements, visit the NYC Department of Finance website.How to verify a tax abatement in NYC?When searching through property listings, you are likely to see real estate agents mention tax abatements in listing descriptions. After all, abatements can be an attractive selling point to prospective buyers.But you don’t have to take the listing agents word for it. Buyers can independently verify an abatement via the NYC Department of Finance website.What you need to input for NYC abatement verificationNYC BoroughBuilding numberStreetApartment #When you arrive at the search result for the specific apartment after entering the address information, click on “Benefits - Business & Construction” on the left hand menu bar and you will see if there is an exemption. Also, you will see the amount for the current tax period and the proposed amount for the next tax period.Interested in buying in NYC this year? Browse listings and see how much you can save with Prevu's Smart Buyer Rebate.DISCLAIMER: This material was provided for informational purposes only, and is neither intended to provide, nor should be relied upon as tax, legal, or accounting advice. Prevu and its subsidiaries do not provide tax, legal, or accounting advice. Consult your personal tax, legal, or accounting professionals before considering any transaction as your individual situation may vary.
Buying a Condo in NYC – Step by Step Guide for 2024
Living in New York City is the dream for millions of people, and with rents steadily rising and space becoming evermore limited, it’s no wonder that many people are flocking to buy apartments.Owning a condo in NYC allows you to enjoy all the benefits of living in the city without the stress of wondering when and where you’ll have to move next. To make the process of buying a condo in NYC a bit easier, we’ve created a step-by-step guide to assist prospective homebuyers in their journeys. This guide will walk you through the buying process, covering essential steps, insider tips, financial considerations, and the benefits of using a buyer's agent.Find Your Dream Home (1 to +4 Months)If you plan to finance your purchase, obtain a mortgage pre-approval or pre-qualification early on to ensure you are operating inside a budget you can afford.Think about what features you are specifically looking for (neighborhood, beds, baths, etc.) and which amenities will matter most in your eventual condo. It can be difficult to find an apartment that checks every single box on your wishlist, so determine which items to prioritize in your search.Understand the differences between co-ops, condos, or single-family homes, to determine what this means for your budget and which one might be best for you. Also, be sure to familiarize yourself with market trends for condos in your favorite neighborhoods - include price trends and the level of competition you will be faced with from other buyers.Prevu’s digital buying platform will send you curated listings that meet your criteria. Plan to visit the properties that catch your eye, and also be sure to attend open houses. You can book private showings online through Prevu’s platform.Our customer success team and local buyer’s agents are here to help throughout the process, don’t hesitate to reach out with any questions or concerns! A knowledgeable real estate agent can guide you through the apartment hunting process, providing market insights and helping you prioritize your needs.Prepare an Offer (1 to 2 days)Fill out a REBNY financial statement, as this is a common requirement when making an offer in NYC.Rely on local data for comparable sales in your neighborhood to determine the fair market value of a property. Prevu’s expert agents will analyze the data to help you come up with a competitive offer.Sometimes it’s an art as much as a science, and Prevu’s local agents will help evaluate more nuanced aspects of homes that the data may not capture. Hiring an attorney who specializes in real estate transactions is crucial to ensure a smooth process.Discuss contingencies.Get an Accepted Offer (1 day to several weeks)Our licensed agents will negotiate a fair price for the apartment based on local market data and their experience. Some negotiations happen quickly, while others take time as sellers may remain firm in an effort to get the highest price.Condo buildings generally have more amenities and a less intense approval process compared to co-ops.While waiting for an accepted offer, it’s a good idea to line up your next two professionals:A local real estate attorneyA home inspector should you plan to do an inspection.Once the offer is accepted a deal sheet will be circulated. A deal sheet outlines all of the specific terms of the transaction.Time kills all deals so it is important to be prepared to move quickly once the offer is accepted. An accepted offer means very little until the deal is in contract.Legal Contract Review and Due Diligence (3 to 7 days)Once the deal sheet is finalized, it will be sent to both the buyer’s and seller’s attorneys. The deal sheet will be used to start the due diligence process on the building. Your attorney will investigate the building, its finances, condo rules and regulations, and the unit itself (e.g. are there any open permits, lawsuits, etc.), asCo-op owners purchase shares of a corporation and abide by strict financial requirements and rules set by the co-op board, which is different than that of a condo.Your attorney will negotiate the terms of the contract and ensure the contract reflects the terms of the deal as well as your best interests with buyer protections via appropriate contingencies.Typically your attorney will provide you with a summary of the due diligence they have compiled. Assuming no issues, at this point you would sign the contract and wire 10% of the purchase price as the contract deposit to be held in escrow. Once the seller and their attorney receive the signed contract, the seller will countersign and send back a fully-executed contract.The seller’s attorney will also confirm receipt of the escrow funds into their escrow account. The contract deposit will eventually be applied to the down payment and money you will need to bring to closing.Mortgage Process (30 to 45 days)Once you have a fully executed contract (commonly referred to as being “in contract”) and if you are planning to finance your purchase, the next step will be to work with your mortgage broker or lender to obtain a commitment letter. Be proactive here as you want to make sure the lender has everything they need so this part of the process moves quickly.Make sure that an appraisal is scheduled as soon as possible.Note that many attorneys will advise you not to lock in a mortgage rate until your lender knows from the contract “on or about” when the property should close. Closing dates can be delayed and can result in extra fees paid to the lender to maintain a rate.The lender will eventually issue a commitment letter (different than a preapproval or prequalification). The commitment letter requires a deeper look at your financial situation than a pre-approval. The commitment letter essentially is a letter that states that the lender will fund the loan for your new home.Note this letter may have some additional contingencies for the lender (e.g. that you keep your job). A commitment letter usually isn’t binding until the property appraisal is completed and satisfactory versus the purchase. The appraisal can occur after the commitment letter is delivered.It is a good idea to get going straight away once your contract is fully executed because many times if your contract is contingent on financing, you will have a certain window, usually 30 days, to submit your commitment letter to the seller side.If at the end of the window you are not able to secure the commitment letter in good faith you are able to cancel the contract and receive your deposit back. Alternatively, you could ask for an extension to allow for more time.Title Report & Title InsuranceAfter a fully-executed contract, your attorney will begin work on the title report. Lawyers will use outside companies to do title searches on the land, building, and unit. The title search is completed to make sure there is confidence that a clean deed will be able to be delivered at closing. Your title insurance policy will protect against any issues that may arise in the future relating to your home’s title. Condo Board Application (If Applicable)Even though you are buying in a condo building, there is still typically a condo board application (except for new developments). Condo board packages are typically much less rigorous than in a co-op building.Condos tend to be found in newer developments, have more amenities, and are generally more expensive than co-ops.A condo board has much less power than a co-op board. Typically a board can only prevent you from buying the condo if they execute their “right of first refusal”. What does this mean? It essentially means that the condo has the right to buy the condo ahead of you for the same price. Rest assured, they almost never exercise this option.The package will mainly include financial statements and documents but may require letters of recommendation as well.Preparing to CloseAfter the condo board has decided not to elect its right of first refusal and you have “passed” the board, the condo board will approve the sale/transaction. This will come either through your Prevu agent, the management company of the building, or your attorney. The next step is to get the “clear to close” from your lender. This will come from the bank, likely from the bank’s attorney. Your attorney will be in close contact with the bank attorney during this process.After getting both the clear to close from your lender and the approval from the condo board, you can proceed to scheduling a closing date. There will be many peoples’ schedules to coordinate with, so you may have to be flexible in the timing or take what you can get. Should you not be able to attend the closing in person, it is not unusual for buyers or sellers to use a Power of Attorney and skip the closing altogether. If you haven’t already, make sure that you have secured homeowner’s insurance for your new home effective on the closing date. This is especially important if you’re financing the purchase with a mortgage, as homeowner’s insurance is often a requirement.The Actual Closing and Closing CostsCoordinate with your Prevu agent for a final walkthrough of the apartment to make sure everything is in good order before closing. This typically occurs the day of closing or a day or two before closing. Be on standby in the final days prior to closing. You will likely only receive your instructions a couple of days beforehand, and there are two things you will need to pay special attention to: 1) your closing disclosure or statement (by law, this must be sent to you three days before closing, otherwise you can’t close until that time has elapsed) and 2) check instructions. If you are financing, the bank will be bringing the lion’s share of the money to closing, and you will be bringing the rest. Checks are important, pay special attention to instructions from your real estate attorneyAll checks need to be certified or official bank checks, from a bank that is a member of the NY Banking Clearinghouse.The best way of avoiding the headache of getting checks yourself is to simply wire the amount to your attorney and have them take care of this task for all the remainder of your down payment and closing costs. The closing can take a couple of hours. Make sure your hand is rested and don’t forget to bring a comfortable pen with you as you will have a lot of papers to sign. Get your new keys, and congratulations! You just bought a new home!Condos for sale in NYCBrowse NYC condo listings by boroughManhattan condos for saleBrooklyn condos for saleQueens condos for saleBronx condos for sale
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