Now you have done it. Ready to complicate life once again. Saved a little money, and now you are ready to buy your first New York City apartment, or maybe you are already a seasoned apartment dweller/owner. You have to ask yourself these two simple questions, What do you want in a NYC apartment, and what are you willing to do to get it?
Do you want to move in one day, and be done? If so, then you are a move-in ready kind of person. Or, are you the type of person who likes to put their own personal stamp on their space? Personally, I have always been partial to remodeling.
Move-in Ready = Fair Market Value.
When you buy an apartment that is move-in ready, you pay for that convenience up front. We will call that market value. It is usually called Fair Market Value, but based on real estate prices today, there isn’t a whole lot of “fair” about it in my opinion.
But the great thing about real estate is that there isn’t a set price. Market value is determined by you and me, the buyers. If buyers aren’t willing to purchase an apartment at your listed price, then your listing doesn’t represent market value. Now, in all fairness the listing may actually be worth the listed price, but it is really just dependent on supply and demand. Sometimes timing can make all the difference in the world when you are buying or selling.
Fixer Upper = Creativity
I have to admit I am pretty biased on this one. I love remodeling, taking the old, and morphing it into something new. Just watching the transformation can be life changing. The bigger the project, the bigger the payoff. The transformation is almost spiritual. I know (no, I haven’t become any more enlightened), but it is really an experience that is hard to convey with words.
I think we have to blame reality TV for this obsession with remodeling. I know it is the direct cause of mine. Watching some of these people makes you over confident in your abilities. It really does, I am not kidding. At the beginning of the show you have a brand new project, and at the end of the thirty minute show they have completed a two month remodel. A little misleading I would have to say. Unfortunately, remodels are usually measured in weeks and months, versus seconds and minutes.
Move-In ready does have advantages.
So why would you choose move-in ready? You pay at or above market value when you have someone else do the work. You are paying not only for the work done, but also the sweat equity that was completed by the original seller. Â People that choose this option have decided that their sanity has a greater value to them than the equity.
The process of remodeling can be life changing in a less than spiritual way as well. A failed remodeling project can ruin your relationship with your significant other, bankrupt you, and possibly even break you mentally. It is not for the faint of heart. It takes commitment and a vision, and a well-funded bankroll.
What Would Jason Do?
So that paragraph header could have been better, but when you see an opportunity like that, you have to take it. I think there are several factors that come into play. Is this your first apartment, or have you owned several apartments in the past? If this is your first rodeo, I recommend buying move-in ready. The transition from renting to owning is something to adjust to as well. Costs that were always forwarded to your landlord may now be within your realm of responsibility.
As an experienced property owner, you may be ready for the challenge, ready to test your mettle against the gauntlet. Are you married, or in a serious relationship? If so, are they on board, or are you driving the ship alone with them being pulled along behind the boat on the life raft? Support is key. Family, friends, and hell even your priest, get everyone on board. Make this a no brainer.
In the end, something is going to go wrong. Just be prepared. Set your budget lower than what you actually have available. Leave some cushion in there that no one knows about. Haggle, haggle again, and haggle some more. Don’t be afraid to ask for a deal. People get too overly concerned with insulting people with their offers. This applies to negotiating both the purchase price of the apartment as well as any negotiations with the contractors. It is your money, remember that people. Fight for it.
The Bottom Line.
If you are looking for something easy, stick with the move-in ready options. Fixer Uppers provide opportunity for a better investment, option to personalize your space, and the ability to create your own masterpiece vs. just painting someone else’s. You will be tested though. From financing to contractors to building permits to cranky neighbors, there will be several roadblocks placed in your path. Are you up for the challenge? Come on people, this is New York City. If it is not a challenge, then why bother?
