Can a Foreign Buyer or investor buy NYC co-ops?

Facts about True Foreigners invest in Manhattan New York Real Estate.

Foreigner and investors are majority of our buyer clienteles, we often have to explain to the buyers about the Manhattan housing market, which consist of Condominiums and Co-Ops. Often, we encounter the question….

“Can a Foreign  Buyers and Investors buy NYC co-op?”

Co-ops are 90% or more of New York Real Estate. Co-op buildings are governed by Co-op Boards, which make every esseential decision about the building and set building house rules and policies. Among those decisions, Co-Op board of directors approve every potential purchaser.

Foreign National Buyers or Investors to buy an apartment in a co-op building are not easy for several reasons:

  1. Co-op buyer/purchaser approval takes months — and is a time consuming and notoriously difficult process. The majority of Manhattan co-ops only approve buyers with New York employment, United State income tax and excellent US credit history.  Most important, United States law DOES NOT require a co-op  to provide any explanation for a potential buyer’s rejection.
  2. There are often limit restrictions on how much financing a buyer can use (for example, no more than a certain percentage of the unit price).
  3. Almost all co-ops restrict the right to sublet your apartment, which makes it un-desirable to investors. Usually, co-op apartments cannot be rented out at all or can be rented out for 1 or 2 years after a certain number of years of owner occupancy.
  4. Co-ops regulate your use of the apartment in many other ways, this including having guests using the apartment or performing renovations.
  5. When selling (or renting it out when allowed) a co-op, your buyer will be subject to co-op approval as well, which reduces the number of qualified buyers and therefore reduces the price of your investment.
  6. There are often additional “flip taxes” on the resale of a co-op to discourage speculators.

 All these measures are intended to protect interests of other co-op shareholders and make sure that a new buyer is financially stable, and will always be able to pay for monthly maintenance, improvements and expenses of the building. In addition, often residents of co-op buildings often view their building as exclusive clubs and want to make sure that the building attracts only a certain type of people who use it in a certain way that makes all the residents comfortable.

The purchase price of most co-ops is 10-20% lower than that of condos. Monthly expenses (maintenance), on the contrary, are usually slightly higher and include utilities, maintenance expenses, real estate taxes, and the corresponding share in the mortgage indebtedness of the building… if the building has a mortgage loan. In addition to the mortgage interest on their own loan, co-op shareholders can deduct their portion of the corporation’s real estate tax from their taxable income.

Still, co-ops can be attractive for those who would like to use the apartment as a primary residence or as a pied-a-terre (part-time stay). For the most part, co-ops are older (prewar) buildings with beautiful authentic features, fireplaces, high ceilings, moldings… and sometimes even their own gardens.

If you are looking for a Real Estate Professional who understands Foreign Nationals buying in Manhattan New York city Real Estate and are looking for the right investmentment, or are selling your property contact Eileen Hsu or Morgan Evans at (212)321-7122 or email us at:

disclaimer: We are not a bank and we cannot loan you or your broker any financing. We work with the top banks and borkerages in the country and can put in front of the best loan officers in New York. These requirements listed above is merely to give you an idea of your financing options; not to market our services.

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