This city article is part of our full size guide: Buying a House

New York Real Estate – How to Buy a House in NYC

Perhaps the most famous city in the world, New York has everything going for it. An incessant economy, endless museums and creative opportunities, neighbourhoods for every taste, and an undoubtable atmosphere. Buying real estate in New York is, for that reason, so popular and lucrative. The real estate market, as we will see below, is an opportune chance to invest safely with high profits. So, with relatively low interest rates, the lowest property tax rates in New York State, and seemingly impossibly low prices, now is the time to invest in New York real estate!

• Rather buy an apartment in New York?

Largest House in USA – New York Mega-Mansion

One of the most expensive houses in the whole of the USA, 281 Daniels Lane is a bigger house than you could imagine. Built by multi-billionaire Ira Rennert, this massive compound has multiple houses and sits on 63 acres of waterfront property. If you want to get an impression of how luxxurious and opulent this self-made entrepreneur lives, you should know that his neighbours commonly complain about the noise of the oversize helicopter which lands on the designated helicopter pad on the property.

The massive mansion boasts multiple dining rooms, a gym, two tennis courts, three swimming pools, a bowling alley, a movie theater, a private museum showcasing the billionaire’s massive art collection, and a basketball court.

• Location: 281 Daniel’s Lane, 11962 New York

What is New York’s Biggest Economy?

New York is perhaps best known for its legendary finance sector. Countless mammoth banks have their headquarters here, and ‘wall street’ is known worldwide for its trading business. Yet New York is also home to a billion dollar port, being the source of thousands of jobs. It is also a major hub for manufacturing of textile and clothing industry. More importantly though, New York is a young tech-hub. With many software and new-tech startups and companies being housed in the metropolis. Lastly, with the city being one of the biggest in the U.S., and most popular worldwide, New York also has a massive gastronomy and hotelier sector, with tourism pushing a large proportion of it.

• Tech
• Finance
• Tourism

Is New York’s Economy Growing?

New York’s economy is growing. Between 2001 and 2019, the city’s GDP rose from $1,20 tril. to $1,57 tril., a 24% increase! There are some 70.000 businesses in New York City, and this number is growing annually. New York’s real estate market also makes up a huge share of its massive economic growth.

• GDP: $960,25 bil. (8% of total U.S. GDP)
• Past 20 years, 24% increase.

Is it a Good Time to Buy a House in New York? – Real Estate Market

Right now is a very good time to buy a house in New York. Low prices are almost certain, thanks to many vacancies by lettors who are no longer interested in renting out the very low rent prices. That means prices will be low, but thanks to New York’s legendary status, and cramped market, the prices are certain to pick up again. In a few years, the current prices will have multiplied, meaning an investment now will reap profits. Prices of homes are expected to increase by 9.1% over the next year.

• Home Prices Currently Low
• Expected 9.1% increase in price

Home Price Trends New York City – New York Real Estate Crash?

It seems every year there is an impending real estate crash. Yet this has not happened until now. Some experts have warned again of a crisis, yet looking at the house price index for New York, there is no evidence. The opposite in fact, the rising house price index indicates not only a healthy economy, but also a strong real estate market.

• Strong real estate market
• Rising Price Index

Most Valuable New Constructions

This graph is perhaps indicative of New York’s real estate market. Only surpassed by Dallas-Fort Worth, and the Houston-Sugarlands areas, the New York metropolitan area is among the places with the highest value of new residential construction permits. That means that new constructions are valued very highly in New York, thanks to high real estate prices, which are, thanks to these expensive new constructions also expected to remain high.

• 3rd best in the Country!

New York Real Estate Prices

New York City’s average house has a value of $660.000. Last year the median sales price on single-family residentials hit $718.000. Additionally, the amount fo sales being completed increased by over 21% compared to last year. Per square foot, you can expect to pay $341, a number 2.4% higher than last year. Manhattan is the most expensive borough, with the hotspot’s averae sale price being ata $995.000.

• Average home: $660.000
• Average sqft: $341

New York Real Estate Market Explained

NYC is certainly a buyer’s market at the moment. There are more properties for sale currently, than there are buyers. Properties were being sold, on average, almost 3% below asking price, and were typically sold after a long 151 days on the market. This is likely also due to the high supply of properties making buyers be more specific in their wishes. Also, while it may seem like rental-heaven, New York is over 50% owner-occupied, meaning that you are not alone in owning instead of renting.

• New York’s Real Estate market in-depth: New York Real Estate Investment

Is it Hard to Buy a House in New York? – Problems

As mentioned, the New York market has many homes for sale, meaning that, apart from few issues, it’s not very difficult to buy a house in New York. Different from buying an apartment in New York, buying a house will likely leave you with a more specific and satisfactory property.

Where Can You Buy a House in New York? – Detached Single-Family Residences

You may think of New York as a place where you can only buy apartments or condos. This is not the case though, although detached single-family houses are quite rare in e.g. Manhattan. You will not have much difficulty finding a house in e.g. the southern parts of Brooklyn (Bensonhurst, Sheepshead Bay, etc.) as well as Queens (e.g. Forest Hills, Woodhaven, etc.). Of course the legendary Hamptons are also prime real estate.

What is the Minimum Downpayment on a House in New York?

Mortgage is always a major topic when buying a house in New York. Even here you will need to pay at least 20% on your downpayment. The FHA loans, which would allow you to pay as little as 3.5% without significant interest rates will be hard to find in New York, as there are so few houses compliant with the regulations. If you decide on a downpayment lower than 20%, you can expect high mortgage interest rates, and of course principal mortgage insurance. With a home price of e.g. $700.000, the classic 20% downpayment is a hefty $140.000!

Tax Tip: NY state will allow you to deduct much of your mortgage interest from your taxable income!

Taxes! Where to Pay and How

Taxes on buying a house in New York: this is the fun part. Taxes in New York are structured so that you are advantaged when you buy a home instead of rent. That means you can deduct many things like mortgage interest and your New York property taxes from your taxable income! More on optimizing your taxes in our article:

• Saving Real Estate Taxes

How Much Money do you Need to Buy a House in New York?

There are of course a million ways to save money everywhere on your home. From saving on your taxes when buying a home to government programs, you need to make sure to take a look at the possible programs for you in your income-, cultural-, and geographical region.

How to Pay Less when Buying a House in New York

For people who are not able to pay a full downpayment, there are many support programs. Real estate purchases are generally encouraged with incentives and support programs. The best are for first-time homebuyers, meaning that if it is the first time that you buy a full residence, you will pay less taxes, and have other monetary incentives. More on that in our main article on buying a house.

• Less taxes for first-time homeowners

We have a full-size guide on all the additional costs you have to pay when buying a home:

Additional Real Estate Costs

Saving with Home Improvements

The planet is dying, and everyone has to do their part. That’s why many houses in New York nowadays are sold with eco-friendly upgrades already done. These include renewable energy sources such as solar power, or other variants such as more insulated roofing or smart thermostats. Having these can cut down on your recurring costs.

• Eco-friendly = Wallet-friendly

What you Need to Know About Buying a House in NYC

These are the top tips for buying a house in New York. You can be certain that if you adhere to these tips, you will have a good time, and end up satisfied homeowner of New York real estate.

People you Need to Hire to Buy a House

The most important step of the house buying step is the people who you will have fighting on your side. You want a group who are capable and empathetic. Additionally, you may need more people than you think. The list includes real estate brokers, agents, loan officers, mortgage brokers, and a real estate attorney. This is the step of the process where you will need to spend more time than you think. A good team surrounding your purchase will be a deciding factor in the quality of your home, as well as how much stress the home pruhcase will be to you.

• Real estate broker
• Agent
• Loan officers
• Mortgage broker
• Real estate attorney

It’s the Season – Spring

If you want to buy a house in Los Angeles, the time to do it is in the late winter to early spring. From January to March, the prices of homes are lower than the rest of the year, which means you can pay less for the same house that you would normally.

• Buy in Spring!

Location Location Location – New York Neighborhoods

Which neighbourhoods in New York to buy in? The old realtors adage, location location location. New York is home to five boroughs, all with a unique character and different qualities. Within these boroughs though, there is also large variation. For example, Brooklyn is home to some of the most high-end real estate areas in the whole city, while its neighborhood of Brownsville is considered the most dangerous. Therefore, which neighborhood you buy in can be decisive

Checklist – Where to Buy a House

What to look for in a location for buying your house? The location of a home, and the amenities nearby can decide your resale value, and can mean over- or under-paying on your house. This is our checklist of things you absolutely have to check out when looking at buying a house in a certain location:

• What are other homes or buildings on the block like? If
  neighboring homes or buildings are in poor condition, it could affect resale
  values.
• Schools: Are there good schools nearby? Do they have a good reputation?
• How close is the home to shopping areas such as malls? If you don’t have a car, public
  transportation? If driving, parking garages?
• What community amenities are nearby? E.g. museums, parks, restaurants, etc.

Don’t Forget Additional Costs

New York has an extra mansion tax, as well as a few other unique facets which make the additional costs here more difficult and sneaky. Be certain that you and your real estate broker have thoroughly discussed the details of all potential additional costs which you could face when buying a house.

• Real Estate – Additional Costs

How long a House has been on the Market – Beware of this

A major problem can often be unseen by you. Whether it’s shoddy renovation work which your inspector misses, a future construction project which could heavily affect resale value, or any number of things. Therefore it’s smart to always check how long a house that you are looking for has been on the market. Remember, in NYC, the average home is on the market a little under 5 months. Anything significantly longer than that can mean danger! It could also mean that a seller is just a particularly hard negotiator, and if you have the money to buy, it can still b the right purchase. So just make sure to take an extra close look.

• Hidden Problems!

Process Explained – How to Buy a House in New York

The process in New York is the same as for buying a house in the whole of USA. In short you save up, find the people that will help you through the journey, find your future home, and close on the deal. More specifically:

1. Save up for the Downpayment
2. Find a Mortgage Broker
3. Get Mortgage Preapproval
4. Get your Team Together: Attorney, Real Estate Agent, etc.
5. Start looking at Listings
6. Go to Viewings
7. Submit an Offer
8. Close

How Long does it take to Buy a House in New York

From start to end, the process is going to take a few weeks at least. The time can range anywhere from three weeks to three years, but on average you can expect about 6 months from start to finish. Remember! Even after closing it typically takes about 90 days before being able to move into the new property. Some people search for years and fail to find anything. In the end, how long you spend finding a new house depends on how well-prepared you are. On average though, in New York, people buying a house look for 50-70 days between starting the search and closing.

• 3 Weeks to 6 Years

Best Real Estate Agents in New York for Buying a House – Ranked

New York has more real estate agents than home buyers it seems. In this sea of real estate agents, all claiming to be the best, our ranking for the top 8 real estate agents in New York is below. These are NYC’s best realtors:

1. Richard Leasure (Howard Hanna Rochester)
2. John Farrell (EXIT Realty Homeward Bound)
3. Alexa Lambert (Compass)
4. Michael Kenduck (21st Century)
5. Bryan Karp (RE/Max)
6. John Lajara (RE/Max In the City)
7. Geraldine Andolina (21st Century)
8. Daniel Axtmann (Berkshire Hathaway)

New York City Explained

Counting the neighbourhoods, and finding out where one ends and another begins is a hard task in New York. The city is massive and spread out over 784 km² (303 mi²), being home to 8,4 mil. people.

• Pop. 8,4 mil.
• Area 784 km² (303 mi²)

New York’s Counties – Are NY’s Boroughs Counties?

New York City incorporates five counties, these are: New York County (Manhattan), Kings County (Brooklyn), Bronx County (The Bronx), Richmond County (Staten Island), and Queens County (Queens). In other words, each borough makes up one county.

• New York County
• Kings County
• Bronx County
• Richmond County
• Queens County

All New York Neighborhoods Mapped – Williamsburg, Midtown, etc.

With so many neighborhoods, it’s nice to see what neighborhood ends where. Where is the famous Williamsburg? See it all in the map below.

Property Taxes – New York’s Property Taxes by County

Buying a house in NYC means looking at how much you’re going to have to pay in taxes. With some districts paying more than others, this is an important part of your investment. New York property taxes are slightly more complicated than elsewhere, but broadly, the most you will be paying is in the Bronx, and least in Manhattan.

• Kings (Manhattan) – 0.65%
• Queens – 0.87%
• New York – 0.90%
• Richmond (Staten Island) – 0.91%
• Bronx – 0.97%

Neighborhoods in New York City – Where to Buy Real Estate

What neighborhood should you move to? Where are prices low, and likely to rise? These are the questions we answer here. Importantly, you will want to decide beforehand what type of neighborhood you’re looking for. There are young, trendy, and soon-to-be-gentrified areas like BedStuy, the super-rich luxury pads in Manhattan, or a little more suburban in Carroll Park or Park Slope.

New York Real Estate – Manhattan

Manhattan… Need I say more? A timeless and undisputed king in New York real estate. Neighborhoods to keep on your radar: TriBeCa, the perhaps most opulent part of New York City, or Upper East Side, which is the hottest tip in New York at the moment.

Bedford-Stuyvesant – Future Williamsburg

Williamsburg is perhaps the most famous example of gentrification worldwide. Not yet prey to gentrification is Bedforsd-Stuyvesant, where low prices, boundless amenities and a young atmosphere allow inhabitants to enjoy the big city, without its incessant tumult.

Park Slope – Where to Raise a Family in New York

Park Slope is already more famous than it was only two or three years ago. This is thanks to its near-perfect combination of proximity to the city, neighborhood safety, as well as a nice park and more. If you want to raise a family in New York City, this is where you should do it.

T

Las Vegas: Casinos, American Way Of Life and “Big Money”

When it comes to real estate investment within Nevada, in addition to popular communities such as Summerlin in Las Vegas, parts such as Henderson and Spring Valley are very interesting and increasingly in demand for new construction projects, as the location is comparatively very central and close to the action. Here we show you exclusive luxury properties that were recently on the market or still are. In Las Vegas there is guaranteed to be something for everyone.

• County: Clark County
• Population: 644,644 (2018)
• Weather: dry desert climate
• Local time: UTC-8 (Los Angeles)
• Coordinates: 36° 11′ N, 115° 8′ W coordinates: 36° 11′ N, 115° 8′ W

Map: City and surrounding area

Here you can see the urban area of Las Vegas and the surrounding area, consisting of steppe, desert and national parks.

Summer House: Lake Las Vegas – $7.5 million

Luxurious architecture meets authenticity and naturalness. This exclusive property scores not only with its stylish interior but also with the view of the untouched nature, which invites families to settle here. Correctly read, this estate is located in one of the fastest moving metropolises worldwide, Las Vegas, only 30 minutes away from the Las Vegas Strip, this property offers you the unique contrast between the exciting city life and the escape of space and time. Arrived a Porte-Cochère, the direct view of the 90m waterfront and a private sandy beach with Zen-Area will pick you up and invites you to relax.

• Price in dollars: $7.5 million
• Price in Euro: €6.6 million
• Price in pounds: £5.9 million
• Highlight: Private sandy beach, 90m water view
• Extras: Including membership in the Lake Las Vegas Sports Club and the popular Country Golf Club Community
• Location: Henderson, Nevada
• Four bedrooms
• Six bathrooms

House tour summer house at Lake Las Vegas:

Location and Address: 23 Summer House Drive

Exclusive Property: Private Sandy Beach & Waterfall – $18.5 million

From the terrace there are direct views of 3 pools, private sandy beach, a huge waterfall and all this surrounded by a beautiful green area. This property clearly deserves to be called a paradise, not only the endless palm trees, but also the Mediterranean outdoor area with its massive stone walls underline the resort flair. Arriving at the house, you will be welcomed by a spacious living room with wall-to-wall glass windows, impressive interior and a huge sitting area with a cozy fireplace. With this property you have not saved space in any area, a generous kitchen with the corresponding cold storage. A master bedroom of around 280m² with separate room for a steam shower, as well as two Chanel boutique dressing rooms for her & Him.

In addition to the Master Bedroom, all 6 other bedrooms are equipped with their own dressing rooms and a spacious terrace. The highlight is the sophisticated guest house with private pool and putting green area. On the first floor there is a large lounge that leaves nothing to be desired and next door a fully equipped wine cellar with room for up to 500 bottles of wine. Last but not least you can park up to 10 cars in a fully air-conditioned garage.

Anyone who has been looking for an exclusive city villa will be amazed, because this exclusive property is only 10 minutes away from the legendary Las Vegas Strip.

• Price in dollars: $18.5 million
• Price in Euro: €16.4 million
• Price in pounds: £14.65 million
• Highlight: Huge water facility with unique waterfall and spa systems, exclusive guest house with private pool and putting green area
• Extras: Luxurious designer equipment, fitness studio, a spacious wine cellar
• Location: Spring Valley, Nevada
• Seven bedrooms and a guest house
• 13 baths

House Tour: Luxurious designer furnishings, wine cellar, everything you need for a good life in Las Vegas

Location and address: 93 Spanish Gate Drive

Spanish Gate (entrance)

Mansion Overlooking the Las Vegas Strip – $25 million

From a rimless pool of nothing but the clear night sky and in the distance the shimmering lights of the entire Las Vegas Strip. This breathtaking performance was hereby realized.

The driveway and exterior façade give you an idea of what an exclusive property this is. 2.700 m² living space with a unique view over the entire Las Vegas Strip. A huge, rimless pool, a natural stone climbing wall, an indoor and outdoor home cinema, a car elevator, the list of highlights goes on endlessly, in line with the motto ‘The Bigger The Better’.

The entire Mansion was equipped with a high-end surround system, as well as RGB lighting in every possible location. The bed of the Master Bedroom is a custom-made in the size of two King Size beds.

The wow-effect is pre-programmed on this property. If you are looking for the superlatives among the properties in Las Vegas, you will find it here. Architecturally, the perfect fusion of groundbreaking technology in the sense of smart home and luxurious, timeless interior has been created. By comparison, such a property would cost at least twice as much in Los Angeles. This property is certainly equipped for the best parties around Las Vegas.

• Price in dollars: $25 million
• Price in Euro: €22.2 million
• Price in pounds: £19.8 million
• Highlights: Borderless pool with views of the Las Vegas Strip, car elevator, two home theaters
• Extras: Huge wine cellar, Unique custom made furniture, Air conditioned basketball court
• Location: Henderson, Nevada
• Three bedrooms
• 12 Bathrooms

25 million is paid for this unique mansion:

Location and Address: Carina Way

Carina Way: Villa to villa.

Real Estate in Las Vegas

Next to New York, the city that never sleeps. In Las Vegas, the lights burn 24 hours a day, as do the slot machines in the city’s huge gaming halls.

Just as huge as the arcades are the numerous (naturally air-conditioned) shopping malls in Las Vegas:

For golf fans and sports fans in general, there are many ways to relieve stress in their free time.

Skyline: Las Vegas from Above

Step 1 to Financial Freedom – Buy Real Estate

Owning real estate. That’s the way to go. But you may not have the $100.000 sitting in your bank account to pay for such a hefty downpayment on your mortgage. The better choice here is to invest in an apartment. Below we take you through the full process, from where to start, to where it ends and moving into your brand new own apartment. These apartments may be lofts, penthouses, single-bedrooms, or shared flats. The same process goes for all these types of residences in the USA.

Advantages of Buying vs. Renting

You may not be sure about whether you want to buy or rent an apartment. Real estate gurus everywhere will either swear that you have to rent, or that you have to buy. In the end it’s not such a simple decision, and what the best choice in your case is, depends on many factors, such as your income, financial reserves, the location of the property, etc. The number one factor is likely how long you intend to live in the property.

Calculate your Finances

When making this decision, the most important calculation is comparing rent to mortgage payments. Let’s say you find your dream property, and you want to live here for the next 10 years. If you can rent this property for e.g. $1.000 a month, or you can buy it and pay $1.000 a month in mortgage for 10 years you can do the math yourself. You will live there either way, but when you buy it and pay mortgage you are building equity, and once you move out, you can sell it for profit. Ownership as opposed to renting also comes with a number of tax deductions which lower the amount of money you actually invest.

When you Should Rent

Of course you shouldn’t forget the fact that a purchase always includes a downpayment. If you are strapped for cash, and cannot afford this downpayment, or it would force you to take out another loan. Then you are better off renting, and avoiding high interest. This side also has tax perks, such as not having to pay property taxes.

Top Reasons to Buy an Apartment

There’s many reasons to buy an apartment. These are the top reasons which should motivate you.

• Attractive returns on Investment
• Danger of Depreciation
• Perfect Preparation for Retirement
• Flexibility
• Safe Investment
• Safety rom Inflation
• Tax deductibles

Preparing Property Purchase – Before Buying

There are a few things to take care of before you even start looking for properties. Of course, feel free to scope out the market before doing these things, but remember that it will be quite difficult to make a serious offer for an apartmentwithout these following things.

Of course, you have to decide what you actually want to invest in, let us help you with that:

• What Real Estate Should I Invest in?

Check your Credit Score – Financing an Apartment

This is the number one thing to do. Before doing going on the hunt for any real estate you should know whether you are even in financial shape to buy. Credit scores are compiled by three so-called credit bureaus: Transunion, Equifax, and Experian. They provide you a report, which can be turned into a score. This score will also play a role in deciding what type of mortgage you can get.

Contacts – Attorneys, Mortgage Broker, etc.

Before buying you need to have a few professionals by your side. It’s probably good to have an attorney set up beforehand, and in many places, e.g. when you buy an apartment in New York, it is even mandatory. Additionally, you may opt for a mortgage broker (especially when buying into a co-op, see below), and a real estate agent.

Mortgage Preapproval – Insurance for Loan

Before you go on the hunt for an apartment, you can (and should) obtain preapproval for a mortgage. This consists of a letter which certifies that you are in fact capable of obtaining the mortgage. In a sense it is the bank telling the agent and seller, that they will lend you the necessary funds to buy a property worth x dollars. This is a vital part of the process, as most real estate agents and brokers will refuse to do showings or take up contact without such a preapproval.

Let us guide you through the confusing world of mortgage:

• Mortgage Explained Easily
• Mortgage Interest – Where it is most Expensive

Buying without Mortgage Preapproval – Paying Apartment in Cash

It is possible to buy without a mortgage preapproval, given that you are paying everything upfront. This is of course not a common case, but given that you will not get a mortgage for the property you are going to buy, you can approach brokers and sellers without a mortgage preapproval. In this case though, you must present proof of funds to view properties.

Now What? More Apartment Search Tips

Now that you’ve taken care of these things you can start to look around. It is best to first get an orientation of the market and how you want to buy. This is best done by taking frequent looks at real estate listing sites and going to open houses. Also, despite internet being pretty much everywhere by now, it’s never a bad idea to go in person to smaller real estate agencies in neighbourhoods which you are interested in. Some more old-fashioned shops may not be putting their listings online.

Readying Purchase – Costs Preparation

When you are preparing to buy your apartment, there are a few things to straighten out beforehand. Planning is as always key, and should include all additional costs. Note that of course these things differ in different areas. Buying an apartment in Chicago is very different from when you buy an apartment in L.A.

Taxes & Property Tax Rates

Of course, when thinking about finances you will have to consider the taxes. There are three different kinds. Three taxes you pay when buying property, which includes property tax. This property tax you also have to pay repeatedly when owning said property.

Want to learn more about property tax? We’ve got you covered

• Property Taxes U.S. – Explained

Important Extra Details

There’s a ton of details you may forget about when buying a property, which bother you a lot later on. Think service charges, which you will pay to the owners of the building. Also important here, who takes care of these services, and is this company performing the services good? Also pay attention to any restrictions, like e.g. whether pets are allowed, and noise restrictions. There may also be difficult-to-detect issues in the neighbourhood, like a large shopping center opening very nearby which increases traffic, or a night club nearby which means noise at night. Or perhaps building issues are prevalent in the area because the ground is unstable. Many of these things will be highlighted by your solicitor, so make sure to listen well. The location is key, meaning New York will have different details to look out for than L.A. or Miami.

Buying Apartment – Process from Negotiation to Close

To buy the apartment finally, you will want to start negotiating.

Make an Offer – How to Negotiate Sales Price

So you decide that this is your dream apartment. What now? Well now it’s time to make an offer. That means approaching the seller with an offer. There are two sides on which to negotiate, and you must pick one or the other. Either you try to reduce the size of the sale price. I.e. buying a property for $800.000 as opposed to $850.000. The other option is to negotiate the closing costs, e.g. agreeing on the sales price, but asking the seller to pay some of the additional costs, including real estate purchase taxes. These tactics of course mean either having more money in your bank account at that moment, or reducing the amount of montly costs in the future. You can typically expect to negotiate 5%-10% of the sale asking price.

Next Steps – Building Inspections

Your lender will most certainly require you to have an inspection of the apartment building, as well as the unit itself. This usually shows slight flaws, such as necessary maintenance in the future, or e.g. structural flaws.

Reducing Sales Price on Real Estate

Now you can renegotiate. You have found flaws in the building, and now have a strong negotiation stance. Let the seller know your concerns, and they will likely be more lenient in their negotiation.

There’s also a ton you can save on the many slight additional costs which come up when buying real estate, we give you the full guide

• All Additional Costs when Buying a Home

Final Important Step! Walk-through

Don’t forget the walk-through! This is one of the most frequent beginner mistakes. After moving out, things may change, the previous owner may have broken something, or a cabinet may have been covering up a flaw. Not doing a final walk-through can be your number one regret later on. It doesn’t take that long, and will most certainly be worth it, at least for the peace of mind.

Co-op Apartment – Buying Shares not Property

Co-ops are slightly more challenging to get, with a complicated and time-consuming process, but the time investment is worth the reward, with typically lower property taxes, the possibility to build equity, and more.

What is a Co-op Apartment? Meaning, Definition, Explanation

A co-op apartment is an apartment which is administrated by a housing cooperative. If you buy a co-op apartment, you are not actually buying the property, i.e. the four walls which you intend to live in. Rather, you are buying a share in a legal entity. The shares you buy entitle you to use a specific part of the building. Therefore, you are not the owner of real property, but rather a membership which allows you to use the apartment you live in. This also means of course that you do not take out a mortgage, but rather share loans, i.e. a loan to pay for the shares.

Why you Should choose a Co-op – Advantages

Because you are not the owner of the property itself, you do not have to pay property taxes. Rather the cooperative pays the property taxes for the whole building, and these are divided among the members, i.e. residents. The main advantage of a co-op is that it is cheaper. The property taxes which each resident pays are lower, and any additional fees are also lower, because the co-op is not intended to make profit. Lastly, residents in co-ops, despite not actually owning the property, are entitled to many tax deductions which real estate owners are entitled to.

How to buy a Co-op Apartment – Step-by-Step Explanation

There are a few steps to go through before buying into the cooperative. Before approaching a co-op, or identifying an apartment which you are interested in, you have to gather an attorney, a mortgage broker, and an engineer. Although this is not necessary, it greatly increases your chances of getting the apartment you want. This is because, once you’ve identified the apartment you want, you apply. Your application is decided upon by the board. This board obviously wants the best possible residents, therefore it’s important to present yourself as a serious buyer. All co-ops have a certain list of requirements, which include the amount of downpayment you need to pay, and how much financial reserves you have. Following this, you contact the seller, begin the title search and mortgage application, and close the purchase.

Special – Buy Apartment New York

New York, the city of dreams. You too can live your dream of owning real estate, and that in one of the top cities worldwide in everything from fashion to finance to art and food. Buying an apartment in New York certainly isn’t the easiest of tasks, but one that is likely to leave you happy you took the risk. But! New York has a complicated real estate system as everyone knows. Buying an apartment here means many different things than it does in other parts of the U.S.A.

We take care of all questions you could have in our full guide on buying an apartment in New York

Buy Apartment New York

Special – Buy Apartment Los Angeles

Los Angeles, where dreams come true. The home of celebrities, hollywood, a sprawling cityscape, beach and surf, and everything else you can imagine. From Malibu to Bel Air, Silver Lake and Venice Beach. It’s worth the traffic and chaos of the metropolis, to experiennce the unique atmosphere of this city. So you want to live in Los Angeles, but don’t know where to start? It’s certainly not easy wrapping your head around where and how to live. Do you choose Mid City or and a retail paradise, or Silver Lake, and hang out with the young students? We give you the full run-down below. The Los Angeles real estate market, like so many of U.S.’ super cities, is doing well. Los Angeles is neither a sellers nor a buyers market. Prices are also increasing, taking single-family residences, by over 16%.

We take care of all questions you could have in our full guide on buying an apartment in Los Angeles

Buy Apartment Los Angeles

Checklist – Overview of Process: Buying Apartment

These are the most important things you need to do before and as you buy your apartment. Don’t neglect these steps, as they are each important in their own right.

Preparation Steps for Buying an Apartment

The most important things to be certain of before buying an apartment are:

1. Check Credit Score
2. Gather Professionals
3. Mortgage Preapproval
4. Remember the Details!

Remember When Buying the Apartment! Important Final Steps

During your purchase, or slightly before or slightly after, there are important things to do. These include:

1. Make an Offer
2. Negotiate Smart!
3. Inspect
4. Renegotiate
5. Walk-Through (Important!)

Condo? Apartment? House? – Type of Real Estate Decisions

So you’ve decided you want to buy real estate. Should you invest in a house or an apartment? What has better resale value? There’s thousands of questions, so below we summarize the most important facts you have to know about what type of real estate you should invest in. There are some important questions though, which we answer below.

Buying real estate? Don’t forget about the…

• 3 Taxes – Buying a House

Do I want to Live in my Real Estate Investment?

Or using the lingo: Investment or owner-occupied properties? If you’re investing in real estate, you will know whether it is for a profit via e.g. rental, flip, appreciation, etc. or whether you want to live in it yourself (i.e. as owner-occupied property). This distinction is important when deciding what type of real estate you want to invest in. For example, buying a house to flip means different taxes than when you use it as a primary residence. This is an important part of the discussion, and therefore will be mentioned often further on. The most important difference for investors is between single-family residentials (e.g. a house) or multi-family residentials (e.g. an apartment building). Note, financing with e.g. mortgages is less lucrative and more difficult to attain for investment properties.

Financing is more difficult for investment properties!

Real Estate Investment – Forming a Business Company, Types of Entities

If you’re going to invest in real estate, you will want to reduce real estate taxes, and reduce liability. This is important so that you do not become involved in a costly legal battle which can cost you your livelihood. Forming a company which rents our property means that the company is liable, and not you. There are many forms of real estate business entities, so check out the full list below:

• LLC
• Limited Partnership
• General Partnership
• S Corporation
• C Corporation
• Multiple Entities
• REIT

What Types of Real Estate are there?

There are 4 different types of real estate: residential, commercial, industrial, and land. We here focus only on residential real estate. This includes many types of buildings, which often have different names in different regions. Our list will go through the top 4 types:

1. House
2. Apartment
3. Condo
4. Townhouse

Of course, if you are deciding on a residence, you will know whether you want to live in an apartment in the city, or a house in the suburbs. Below, we focus on which type of real estate is most profitable.

Should I Rent out my Property?

This is one question which you may not be certain on. After buying real estate, you have two main options: Sell it on, or rent it out. Of course, you can leave it empty to avoid costs of repairs and reap the benefits of appreciation later, or any other number of things, but here we will focus on these two options as they are most popular. There are pros and cons to both sides, and the answer to the question depends on a few factors.

Financing

Buying a property to rent out has different tax implications, as well as different effects on your mortgage. Almost everywhere, investment properties are encouraged, and incentivized via tax deductions. That means lower taxes on the income you make from rental properties, than from selling/flipping. Looking at rental properties, you are entitled to deduct most of the expenses of your property your tax sheet. Repair services, the expenses of home office, insurance and mortgage insurance, are all deductible. The biggest advantage is likely depreciation though, where you can write off the consistently sinking value of a property from your taxes.

• Biggest advantage: Depreciation!

Involvement

The dream of real estate mogul is connected with passive income. That is, letting your investment make you profit, without the pressure of having to run a business or go to the office yourself. That’s called passive income, and it sounds quite comfortable (more comfortable, of course, than it actually is). That’s the type of income you have with rentals, where apart from repairs (which your property manager will take care of), you have little to no involvement yourself. Active income, the opposite of passive, is what most people do in their day job, working for every cent you receive. If you plan to sell your property, you are likely much more active in the process. If you plan on flipping your house, i.e. buy-renovate-resell, you can consider this a day job, as it requires much more consistent work.

Risks

If you are looking to rent out property, there is of course the risk of not finding tenants. On the other hand, there is a similar risk for flipping, when you fail to sell the house above acquisition price (i.e. the cost of buying and renovating the property). In any case, a real estate investment only carries risks if the decision to buy is made without looking at extensive information.

What Type of Real Estate Should I Invest in?

Now that we have all that cleared up, we go on to the different types of real estate and the advantages of each.

House

The so-called single-family residential. This is something everyone is familiar with, and needs no introduction. Typically when you buy a house, you pay a percentage of the full price up front (down payment), and then monthly pay off the rest of the price (the mortgage, more on all this in our article: Mortgage Explained Easily).

Advantages

Lower up-front cost means that at the point of purchase, you have to invest less money than you would for other types of real estate. There’s also the factor that you can quite freely decorate or renovate, without worrying about a building coop breathing down your neck. Another big advantage, you’re buying land at the same time as your house. Even without the house, this appreciates in value.

• Freedom & Privacy

Disadvantages

You’re the person in charge. The same way that carries advantages it also has disadvantages. You need to do repairs, servicing, etc. Of course, there’s also the price. Houses are of course much more expensive than apartments, even when finding a good mortgage. The location, with houses often being situated in suburbs, means distance to the big events or the inner city life. Of course this is also desirable for some, such as young families.

• Responsibility & Work

Apartment

Apartments are often the first step for first-time home buyers. An apartment is any form of residence which is situated within a larger apartment building. Although they are not always the most spacious, they are relatively cheap, and offer a good choice for those people looking to live in the city, as opposed to the suburbs. People often think that it is only possible to rent apartments, and although this is definitely the most common choice, it is also possible to buy and sell an apartment.

The advantages listed above are of course the most convincing. On top of this, you have people like the property manager, who come take care of issues such as plumbing. That means less responsibility for you, the resident. Additionally, the modern apartment building has amenities such as a pool or a fitness room. Lastly, it’s much less lonely, with the common spaces giving room for interactions with your neighbours. Looking at finances though, your apartment is less likely to appreciate in price, meaning that you won’t make profit when selling it.

Condo

A condo is for many the in-between option of apartment and house. It offers the size and relative privacy of a house, without the responsibility of owning a free-standing house. Attached to condos are often things like concierges, and security. Again, here it is also possible to rent, but also buy a condo.

Like apartments, this form of real estate is also less of a risk, as well as less of a commitment, than buying a house. People often neglect the fact that, just like in apartments, you will pay fees for repairs, or to the building managers. These ‘condo fees’ are somewhere between $100 and $700 a month. Another disadvantage is also the close proximity to neighbours.

• Condo Fees: $100-$700 /month

Townhouse

A townhouse is the often-forgotten fourth option. Here, just as with a house you own the property, i.e. the land as well as the building in which you live. This is advantageous because it allows you to build equity over time. So what’s the difference to a normal house? Townhouses are usually set up in a row, wall to wall with the neighbouring houses. That means less privacy, and common issues. Yet, for this reason, and because these are usually smaller than your average house, townhouses can be cheaper to finance. Additionally, they are great options for more space in more populous areas such as downtown city centers.

If you’re thinking about buying a condo, make sure to inquire in the other condos in the association/development. At least 90% should be owner-occupied. Even if you’re renting, ask around and find out how the rest of the owners are doing financially. An association means that if a singificant proportion of tenants are unable to pay, or are simply not paying, you will have to shoulder the load. So if they don’t pay you may suffer.

• >90% of Condos should be Owner-Occupied

Invest, Sooner or Later

No matter when you do decide to invest. Real estate is often the right choice, given that the necessary leg work is done beforehand. That means, getting informed, knowing about the options, and the dis- and advantages of all these options. Our guides on mortgage, property taxes, and costs, give you a strong foundation for what you need to consider.

Looking at real estate in Germany? Our encompassing guide tells you all:

• German Real Estate – Everything you Need to Know

Additional Fees When Buying a House?

Everyone knows that you will pay money to another homeowner when you purchase your house, and for a long time as part of your mortgage interest. You will likely be aware that there are some fees that you will pay to a realtor in case you have hired one. Yet there’s many additional fees you can expect on top of that. In general, a rough estimate is that these costs are usually between 3 and 6 percent of the total purchase price of the home.

• Additional 3-6% of total purchase price

That means a $1 mil. home can incur $60.000 additional costs on top of the purchasing price.

$1 mil. House = $60.000 Additional Costs

People like to call all these costs closing costs, yet taken strictly, closing costs are all costs which occur at a point of sale of real estate, which are not the basic value of the real estate. This does not include e.g. furnishings or mortgage insurances though. Below all additional closing costs as well as additional fees which you may incur when buying a home.

All Fees – List

Below we shed some light on what the fees are which a buyer will have to deal with, who pays these, and why these are paid. Here we list the most important ones:

Earnest Money – Real Estate Deposit

The first expense you will incur when buying a home is called “earnest money”. It is a form of downpayment, a deposit paid by a future buyer which demonstrates the seriousness of his or her intentions to purchase a property. It is usually paid to a broker or agent, and held in an escrow account until the purchase is completed. It is later used to pay for the down payment or closing costs.

That is, unless the deal fails and it is found to be your failt. If this is not the case, and the deal falls through for reasons out of the buyer’s control, he or she will be refunded the money. Typical ‘earnest money’ deposits in the USA range from $500 to $2,000.

• Between $500 and $2,000

Down Payment – Beginning Mortgage

Everyone’s heard of down payments, and they’re vital to understand. A down payment is a portion of the total price of the home which you pay at the point of sale. As most people cannot pay the full sum of the real estate at the point of sale. It typically works as follows: an individual pays a downpayment to the seller of a piece of real estate. A financial institution, such as a bank, will pay the seller the remaining amount, and receive scheduled payments from the buyer. These scheduled payments form part of a mortgage, read more in our article

• Mortgage Explained – Easy, How-to, Definition, More

How much is a Down Payment?

In the U.S., the rates vary, but the typical rate is 20%, with 5% or less being rare, but still possible. The higher this percentage is, the less an individual is typically going to borrow from the bank, and therefore the lower the interest rates will be on the money needed to pay back. Additionally, the more that is paid, the lower the amount on which interest is collected. E.g. if the rate is 20%, you pay less if this is 20% of $200.000 than if it is 20% of $800.000.

• 5%-20% of Purchase Price

Taxes you Have to Pay Buying Real Estate

There are a few taxes which you need to pay when purchasing a home. These include mortgage taxes, property taxes, and transfer taxes. These are not universal across states, and need to be regarded as a critical part of the additional costs you pay when buying a home. We have a full article on the matter giving simple details

All Taxes You Have to Pay when Buying a Home

Mortgage Insurance – Real Estate Safety Net

Mortgage insurance, not to be confused with mortgage tax, is an insurance on being able to pay your mortgage. Typically this is only required if you make a down payment less than 20% of the original purchase price. Also called private mortgage insurance or mortgage insurance premium (the same thing, but when you receive a mortgage through the Federal Housing Authority). Additionally, those receiving a loan over the department of veteran affairs are not required to pay mortgage insurance of any kind.

How much is Mortgage Insurance?

The rates of mortgage insurance are typically between 0.55% to 2.25%. This percentage is calculated as a proportion of your loan. For example, a loan totalling 2 mil. with a mortgage insurance rate of 2% will be $40.000. Additionally, these are typically paid annually.

• 0.55% to 2.25% of total Mortgage

Furnishing – Critically Underestimated

Actually putting your furniture is an often underestimated part of buying a new house. Although irrelevant for those merely seeking to spread investments, for home owners, these can be substantial sums. The costs of moving into a new house can be on average up to $35.000. Moving costs on average between $1.100-$5.630 for the average homeowner, and for those buying properties in the millions, this sum is substantially larger. These include a thorough professional cleaning of the new house, hiring movers, which can costs up to 50$/hour adding up to thousands. Then supplies to move such as a blankets, or paint to paint walls, as well as hired painters. The list goes on.

• Up to $35.000

For property investors looking to rent out their property, even more significant costs can be expected. With sums of $10.000 to be expected for an unfurnished house, homebuyers often do not calculate this into their expected costs.

Discount Points: How to Reduce your Mortgage Payment

Discount points are also called mortgage points, upfront points, or just points. These are not mandatory, but if paid offer considerable advantages, given that there is not a low loan rate. The buyer pays a certain amount to the seller, which then enables the buyer to lower the interest rate on their mortgage. These can be used similarly on conventional or government loans. If you invest in one discount point, you are able to reduce your interest rate by 1%.

• 1 discount point = 1% less interest

When to Buy Discount Points

It is advantageous for a buyer to invest in discount points when two factors come true

1. The buyer intends to own the property for a long time, which means that the interest will be paid for a long time. A discount point would then mean leass dollars paid each month, and over many years this would be worth it.
2. If you plan on paying your mortgaeg off in the designated time period or longer. For persons who intend to pay an e.g. 10 year mortgage off in 5 years, a discount point would be worth it.

What is an Escrow Fee?

This is a fee which is paid to the title company, escrow company, attorney, etc. who helped the buyer close the sale. Like most other closing costs, these are a percentage of the sales price. Often teh value of which is split between the buyer and the seller.

This fee goes to the escrow agent who helps you close. It can vary based on the purchase price of the home, but it is paid to the party who handles the closing: the title company, escrow company or an attorney, depending on state law.

Title Search Fee – Paid to Title Company

The title search fee is another closing cost. It pays for the work which the title company (an organisation which typically the buyer has hired) does in ensuring that there are no issues in ownership or past disputes. This is an aspect of closing costs in which it is quite simple to reduce costs by investing time to identify high quality and low-cost companies.

Survey/Appraisal Fees – Land Inspection

You will need to be have an official and registered survey and appraisal of a property for the lender. If an existing survey of the land you wish to purchase cannot be procured, a new survey must be carried out to determine the exact boundaries of the land. These usually cost about $500. For the appraisal, you pay a certified appraiser to determine the value of the house. Most lenders require this, this usually costs between $300 and $400.

• Between $300-$400

Property Tax – Pro Rata at Purchase

Property taxes must be paid pro rata at the point of sale. This means it is included in closing costs. For a full overview about this and other taxes, such as the recording tax (also called recording fee or notarization fee) refer to the full article

• All Taxes you Pay when Buying a Home

Origination Fee/Loan Origination Fee

Part of the mortgage closing costs, this fee covers administrative costs for processing a loan, and is usually 1% of the loan amount. Some lenders do not charge this, and instead have a higher interest rate. It is important to know that, often, these fees can be itemized in your final statement.

• Cost about 1%

Homeowners Insurance – Extra Security for Home

Just like with property taxes, when buying a home, you are required to pay a pro-rated share of the homeowners insurance. That means you need to pay ahead for a given time period. This time period is generally one year. Because you pay the insurance premium, the cost depends on the insurance of the house

• One year Insurance Premium

Attorney Fees – Should I get an Attorney?

These won’t be necessary everywhere, or with every purchase. Some states require an attorney to oversee the purchase of the house, and in some situations the buyer may want an attorney for other reasons. These attorneys take fees of course, and when purchasing a property, you will need to pay them. Attorneys are actually mandatory when buying property in New York.

Title Insurance – Protecting Against Claims

Title insurance is intended to protect both the lender and buyer from claims. These claims may be against the house in the case of the lender, and for the buyer prootection against past contractors making claims.

Lender’s Title Insurance

The lender title insurance is a one time fee paid at time of closing. It is paid to the title company, to protect in the case of an ownership dispute, e.g. when a lien arises that was not identified in the title search. This fee is usually betweeen 0.5 to 1% of the loan amount

• One-time fee, up to 1% of loan amount

Owner’s Title Insurance

This is an optional fee. Although you may come to regret it heavily in the case that someone does challenge the ownership. Therefore, while it is not mandatory, it is done by almost everyone, and highly recommended in any case.

Broker Fees – Commissions for Real Estate Sale

Broker fees are probably the first thing people think of when thinking about closing costs. These are also called agent comissions or real estate commissions. These are often paid by the seller, but are also usually part of the negotiations, and in a sense therefore also paid by the buyer. They are the fees which are paid to the brokers of a real estate purchase. These brokers are usually the listing agent (i.e. the seller’s agent who offers the property) and the buyer’s agent (who finds the property for the buyer, organizes, etc.). The fee is usually between 5-6% of the purchase price, meaning an additional cost of up to $60.000 if you are buying a property worth $1 mil.

• 5-6% of Purchase Price