Space has always been at a premium in a city as crowded as NYC. There’s not a lot of it here, which is what makes every square inch so expensive. Fortunately, now might be the opportune time to buy and trade up for more space in the city. Due to the pandemic, there’s been a steep drop off in signed contracts and new listings. But with physical home tours now possible again, the rebound seems to be in motion. Historically low interest rates are another cause for optimism. It’s now possible to borrow more, even if this also means a tougher time getting approved by mortgage lenders.
If you’re in the market for a new home in NYC and want to get square footage for your dollar, there are a few changes you can make to your housing search to make that easier. As you might have guessed, they all have to do with that tried and true cliché of real estate, location, location, location.
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Look for a First-Floor ApartmentLook for a First-Floor Apartment
The higher the floor, the higher the asking price tends to be in an elevator building. New Yorker’s have a habit of preferring apartments that are on the higher levels. After all, a higher level means less noise pollution, better security, better views, and, of course, the prestige that comes with being the king of the hill. But like all things, this comes at a price, one that increases by as much as 5-15% for each level you go up. Choosing the first-floor apartment means you’ll have a wider selection of apartments to choose from that fit your budget.
An exception to this would be first-floor townhouse apartments. These can sell at a premium, especially if they come with garden access. This is also, generally, the case with first-floor walk-ups. Think of it as an inverse relationship when the building is a walk-up. However, be warned, you could be facing tough competition now for apartments on the first floor. The pandemic has led to a renewed interest in them due to their ease of access.
A Postwar ApartmentA Postwar Apartment
While they may not come with the romantic splendor of prewar apartments or the modernity of new developments, postwar apartments are an easy way to get more bang for your buck. In general, this refers to any building constructed between 1947 and 1990. Much of this construction was in the suburbs, but it also transformed a few urban neighborhoods. For instance, the Upper East Side largely what it is today because of this building boom.
With a time period lasting more than 40 years, it’s little surprise that there’s a lot of variety in how many of these buildings look. Building architecture changed a lot from the ’50s to the ’90s, with each building tending to show characteristics of the decade it was built in. The oldest postwar buildings might be made of brick and have parquet floors, while newer ones might have more modern amenities and perhaps a ‘cookie-cutter’ appearance.
But what these buildings lack in style and convenience, they more than makeup for in space. In terms of square footage, a two-bedroom in a postwar apartment is about the same as a three-bedroom in a new development. As for price, the difference can be as much as 10-15% between prewar and postwar. They also tend to be far easier to renovate than prewar buildings.
An Apartment with a Slightly Higher Maintenance FeeAn Apartment with a Slightly Higher Maintenance Fee
While no one likes the idea of taking on a very steep monthly maintenance fee, sometimes it can work in your favor if it means a lower asking price. So long as you’ve got a secure line of cash coming in every month, this can be a useful way to get more for less.
However, be wary if you take this approach. A higher than average maintenance fee tends to negatively impact the value of an apartment. This might not be much of an issue if you’re just looking for a starter home, but anyone looking for a long-term investment would be cautioned to look elsewhere. There’s also the issue of why the maintenance fee is so high in the first place? It could be something innocent like the building having more staff than average or something far more insidious like litigation against the building that has to be paid out. Be sure to do plenty of digging into why a building might have a high maintenance fee.
Consider Living in a Less Desirable LocationConsider Living in a Less Desirable Location
Let’s not be coy; we all dream of living in the Upper East Side, Tribeca, or any other of the city’s top and most exclusive neighborhoods. But if you’re on a budget and want to stretch those dollars, then you need to look elsewhere. Generally speaking, the less well-known a neighborhood is and the further it is from public transport, the more affordable it is.
Of course, this does make commuting a little problematic. But if you’re working from home, this shouldn’t be much of an issue. It all depends on what your cutoff point is. The average commute time for New Yorkers is just over 40 minutes. The further you go beyond that, the more affordable things get.
Walk-Ups and Non-Doorman BuildingsWalk-Ups and Non-Doorman Buildings
Any building with a doorman tends to be much safer and more modern. But it also tends to be much pricier. About 10-15% pricier compared to non-doorman buildings. As with your choice of neighborhood, your choice of the building type will significantly impact what you can afford. If space and affordability are priorities for you, then going for a non-doorman building is the way to go.
The potential savings are even greater if you choose an apartment above the second floor in a walk-up building. On average, the price difference can be as much as 5% for each level you go up.
Places that Banks are Reluctant to Lend toPlaces that Banks are Reluctant to Lend to
When a seller knows the banks are a little reluctant to lend for their particular property, they tend to offer discounts to attract all-cash buyers. Some of these ‘problem-child’ properties include HDFC co-ops, walk-ups above the fourth floor, and condos where a single entity owns more than 10% of the apartments. There are many reasons for this, and each bank will have its criteria for determining what a safe bet is.
Properties like this can be a steal, but before you make an offer, it’s worth looking into why the bank might be hesitant. It could be something that you’re willing to deal with, like having an apartment on a fifth-floor walk-up. But it could also be something far more concerning, like structural issues with the building or unusual property titles. These are issues that could mean you end up buying a lemon. So be well aware of the risks before you proceed with buying any property that the banks won’t touch.
A Fixer-UpperA Fixer-Upper
Proven tried and true way of getting more space for less. Depending on how much work you’re willing to put up with, this is a great way to get a good deal. Just be aware of what you’re getting yourself into first. Renovating a fixer-upper isn’t nearly as easy as they make it look on HGTV. Get a few quotes from approved building contractors and have plenty of cash in reserve in case (more like when!) you go overbudget.
You’ll also have a far more difficult time now if you live in a co-op or condo. New safety and cleaning requirements mean that renovations jobs now take much longer. If all this sounds like too much trouble, then remember not all fixer-uppers are full-gut jobs. In some cases, it might only be a small project, like a new kitchen or redoing the floors.
Traditional LayoutsTraditional Layouts
Open-plan layouts have been in vogue for quite some time now. It’s how most new developments design their units and what most buyers are looking for. But if you don’t mind going for a traditional layout, with a separate dining room, living room, and kitchen, then there’s a good chance your money will go further. Traditional layouts like this are not very high on most buyer’s wish lists. It makes them a key choice when you’re on the hunt for a deal. Also, if you don’t mind doing a little renovation, you can always knock a wall or two down and turn it into an open floor plan. Just make sure to check with a contractor first to see if this is feasible.