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June 16, 2007
Rent in BK, own upstate?
Hi All,
I'm not sure how to figure this out, so I figured I'd try you guys. I'm trying to decide if it makes sense for my husband and I to rent a studio in Brooklyn and buy a small house an hour or two north of the City. We would need to sell our apartment in Jersey City, rent the studio in Brooklyn, and buy the place upstate in a relatively close period of time -- one thing I don't know how to swing is the timing so we're not homeless or carrying too much expense at any point in the process.
Has anyone else tried something like this? Pros and cons? Any other place to look for info on this?
Thanks so much for any help you could give me.
Comments
Where are you going to spend the most time? Where do you want to put down roots? You don't mention why you would want to do this. If this is a weekend house, you may not feel like going up there all the time, especially when it will involve maintaining it on weekends and your day to day life together in a studio may get a little too close for comfort. If you are doing some kind of independant work and you need the space and will be living there at least half the time, that might work. I think you should pour your money into your primary residence. Hopefully, you will be very successful and be able to do both. Good luck to you.
Posted by: anon at June 16, 2007 2:33 PM
Hi,
Thanks for your response. We want to do this because we still need to work in the City, but we really crave peace and quiet and something that feels healthier than where we are now. But we're both in fields where we can't afford to do this as a "2nd home" type thing. The idea is that eventually we could transition to upstate full-time, but for now we need to be in the city. Both of us do a lot of work from home on nights and weekends now anyway, so we could do that upstate but in a better environment, and we wouldn't need much space in the city b/c we'd be working at our actual workplaces. In theory I agree with you about focusing on a primary residence -- I guess the primary/longterm residence would be the upstate one and the BK one would be a way to maintain our fulltime salaries in the City without breaking the bank.
Thanks for your insights!
Posted by: Original Poster at June 16, 2007 2:47 PM
If you plan your 2nd home "north" of the city, why would you rent a studio in Brooklyn. You can rent in Queens or Inwood and spend alot less money, and be closer to "north". Go wherever you can get the cheapest studio near where you work, that's closer to your other home.
Posted by: Anonymous at June 16, 2007 5:13 PM
If I were you I would look other places than Brooklyn. As someone who drives up to orange county a lot, the drive will kill you. Factor in Atlantic Yards, and the BQE traffic, don't forget about the kozicusko (spelling?) bridge project. Commuting to Brooklyn will become your worst nightmare. Don't forget about parking too. My suggestion: check out the Bronx. You can find a rental cheap. You might not get the same trendy stores and cafes though. Areas to try that are safe: Throgs Neck, Riverdale, Pelham Bay, country club, Parkchester (its stuy town in the Bronx). If you are interested in specifics, leave your email and I'll respond. Its a good idea, I know alot of people who do it, but I wouldn't use Brooklyn as a crash pad.
Posted by: Alisa Colley at June 16, 2007 5:15 PM
with the commute, perhaps living near the battery tunnel would work .. then alway drive down jersey and across the lincoln or holland tunnel then past ground zero and over the battery tunnel. EZ pass the whole way. Worked for me, and going north you get to the ny thruway really quickly. Picking my times I could get to the catskills in 2 hours, door to door.
Or buy a lovely place in north fork (shelter island perhaps), then you are already on long island, kind of, and just have the LIE to manage.
Posted by: Anonymous at June 16, 2007 6:12 PM
i'd rather commute from canada than deal with the LIE on a regular basis.
Posted by: anonymous at June 16, 2007 9:08 PM
Interesting posts, thanks -- good food for thought. The reason we're thinking Brooklyn is because all of our friends are there, we spend a lot of time there, my husband lived there for a long time and misses it, etc. If we weren't gonna do BK, we'd just stay in Jersey City b/c it's relatively cheap, we like it (just not as much as BK), and it's super convenient for going upstate. And as much as it sounds nice to buy in Shelter Island, we'll never have that kind of money. Oh well. We don't want to commute regularly, basically just once a week each way -- down for 3-4 days, back for the other 3 or 4. It seemed like a feasible idea, but dunno, maybe it's just too complicated...
Posted by: Original Poster at June 16, 2007 11:07 PM
anything in brooklyn right now would be a good long term idea i believe.
Posted by: Anonymous at June 16, 2007 11:36 PM
Really bad idea. Tent in the city and own outside the city. This is a trap. You will enjoy stable rent for a while and then your building will be sold or converted to condos and you will be forced to pay double rent, meanwhile, if you had bought in the city you would have doubled your investment instead. Everyone I know who did this regrets it. I bought several brownstones and now don't have that problem
Posted by: Anonymous at June 17, 2007 7:27 AM
Bad idea. First off, you won't get mortgage tax deductions on a vacation property. Secondly, you won't be eligible to avoid capital gains tax (up to $250,000 per spouse) when you sell your vacation property. Thirdly, if you get a sweet rent-stabilized rental deal, your landlord can toss you out if he finds out you own a vacation property. Fourthly, if that's a word, rents are just going up up up, at a pace that's probably higher than real estate appreciation in "upstate." The hampton is another story....
I bought a 240 square foot studio in gramercy park 6 years ago, which I thought would be for 2-3 years. I just sold it and with the profit was able to buy a 3 family in south slope with a 1600 square foot garden. So, I say buy your primary residence. YOu will also have less car expenses and upkeep/maintenance expenses with an apartment, and will be closer to your goal of one day owning both.
Good luck!
Posted by: phoffy at June 17, 2007 9:26 AM
LIE? why give advice when youndon't even know what you are talking about?
I don't think it's such a bad idea, I know 2 people who are doing this and aer very happy.
I would say that you should definateley look in queens to rent. check out forest hills or jackson heights. rents are much lower and the commute will be about 1/2 hour less
Posted by: anon at June 17, 2007 9:36 AM
I have to agree that this is a trap.
I've given this a lot of thought. It seems like such a good idea because it's easier to buy more upstate, it seems like it's so close, etc.
But when you do the math for reals (factoring in all those hidden costs like EZpass, gas, car maintenance, financial dings like capital gains tax, and the fact that rents in NYC increase faster than property upstate appreciates... don't even mention all those extras you can't add up like how much more you'll eat out, the cost of furnishing and maintaining two residences, all the milk you'll throw away, how much time you will spend on the road, the negative helth impact of sitting in traffic, etc. etc. etc...)
It starts to look like a big drag that only works if you're rich.
My advice: Either be in the city or don't. Trying to be in two places makes you a half a person in each. It's great that you love Brooklyn. Maybe it makes sense to get a brownstone with a backyard in Bed Stuy (where we have a lot of different kinds of birds and raccoons and lovely patio an stoop sitting green relaxation...) and be with your friends and have space of your own and get a tax benefit.
Whatever you decide, think about your health in real terms like how much time and energy you spend living and what you get in exchange and whether you are doing exactly what you want for as much time as possible--and not in terms of Upstate romance v. dirty city. If what you really want is upstate, figure out a way to really be there all the time. If what you want to do is this city stuff you've been doing, then make the city work for you.
(We wound up getting a brownstone in Bed Stuy instead of this renting and buying upstate thing. We are really happy with our choices. YMMV)
Posted by: Anonymous at June 17, 2007 1:11 PM
We have a place in Beacon and Brooklyn. It takes an hour and a half to drive down to Bklyn or an hour to get to Manhattan. It's about an hour, 15min. on the Metro North line. The Bklyn house is our weekend place and Beacon is our primary residence. You can have your upstate home as your primary and avoid higher interest or capital gains. If you do a reverse commute, like us, you can avoid weekender traffic. We love it because we have the best of both worlds. Put me down as "great idea".
Posted by: Anonymous at June 17, 2007 10:25 PM
Why do people insist on posting information that is just plain wrong, when it's so easy to confirm? You certainly can deduct the mortgage interest on a vacation home. You can deduct the interest from a first and second home and so long as you don't rent out the second home, there is no minimum amount of time you have to spend in it to get the mortgage interest deduction.
http://www.irs.gov/pub/irs-pdf/p936.pdf
Posted by: anon at June 18, 2007 2:35 PM
My husband and I did this 6 years ago and we don't regret it. We had really cheap rent in Brooklyn, but couldn't afford buying something better so instead we bought a place outside of Kingston. Earlier this year we finally bought a place in Brooklyn and decided to keep the house upstate. It has taken major sacrifices to keep both, but for us it was worth it and we actually think it has become a good investment.
We go up as much as we can and my husband's job often allows him to work from there so we spend a significant time of time up there. So, my only advice is to make sure to get something as close to the city as possible so you can actually use it all year long.
Lastly, in NY you can deduct both mortgages for tax purposes.
Good luck.
Posted by: Anonymous at June 18, 2007 2:41 PM
we just sold our house upstate after owning there and renting in bklyn. the appreciation in value let us put a down paymnet on a brownstone in brooklyn. right now real estate upstate is cheap - the market it terrible - so you could find a decent place. the problem is finding an affordable rental in brooklyn. it can be a pain getting out of town - on bad days it took us almost two hours! But for some reason was never a problem driving back into NYC. Also, market upstate may be down for a while, so no guarantee that it will appreciate in near term. A fine plan if it is long term but good luck in finding a cheap "pied a terre."
Posted by: anoan at June 18, 2007 5:11 PM
Hi All,
The various comments here have been really helpful in my process of trying to think this whole thing through, I really appreciate it. We're not trying to make a killing here, we're just trying to get by and be happy without being foolish -- but we live on nonprofit salaries so we're limited. I'm glad that the Beacon and Kingston folks have had a positive experience, that gives me a little hope at least. Having these different perspectives is great.
Thanks,
Original Poster
Posted by: Original Poster at June 18, 2007 10:32 PM
OP, I'm the Beacon person, but I've lived in the Kingston area also. If you want to post your email address, I'll be happy to give you more info on these areas, including the names of some wonderful mortgage brokers, so you can find out just what you can afford to do and make it a reality. (Gosh, sound like an infomercial!)
Posted by: Anonymous at June 19, 2007 8:54 AM
It seems to me that you will be splitting the time somewhat evenly between upstate and Brooklyn. What I would do is list the upstate house as your primary residence. This way you have the tax benefit of home ownership, cheaper car insurance and the tax free flip of the property after 2 yrs of ownership (with a max of 500k in profits for married couples). This way your Brooklyn home is the vacation property so to speak. Believe me, I've been there and done that.
Posted by: GuyFromDoBro at June 19, 2007 9:19 AM
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