Buying townhouse/landed property in Manhattan, New York
Posted by Wei Min Tan on January 12, 2021
Landed property in Manhattan, New York refers to buying a townhouse. A townhouse is where the owner owns the whole building which is usually 3 to 5 storeys. Townhouses in Manhattan share walls with the neighboring townhouses. In Manhattan, there are no bungalows or semi-detached houses where the house is surrounded by a yard all around.
Landed property or townhouses in Manhattan start at $6 million and up. A good, wide, one family townhouse in a good location is around $10 million. Hence being able to buy a townhouse and have the whole property to yourself is a big luxury in Manhattan. The below are advantages and disadvantages of owning a townhouse in Manhattan.
Owning landed property means having trees and a backyard which condos do not have
Advantages of a townhouse/landed property
Privacy: Since Covid, people want more space and less density. Living in a townhouse means having privacy for your family. You won’t have to share the elevator with others, bump into people in the hallway or listen to kids jumping up and down in the apartment upstairs. Only your family lives in the townhouse.
Rules: Living in a condo building means having to abide by rules of the condo building and the condo board. But in a townhouse, there is no board and no rules to follow. You make up the rules because you are your own board.
Size: Townhouses are the size of several apartments. Sizes range from 3,000 sqft (on the small size) to 10,000 sqft and above. You will have a backyard for play, backyard BBQ, entertainment. On a price per sqft basis, townhouses have the best value, i.e. lower price per sqft compared to a condo.
Financial gain: Landed property may have unbuilt air rights denoted by the FAR (floor area ratio). For example, a townhouse may have the right to build up to FAR of 5.0, but it’s currently only built up to FAR of 4.0. This means there is development opportunity to build an additional floor above the current structure. If the owner does this, the value of the townhouse increases.
If a townhouse is a multifamily structure, the owner can live in one unit and rent out the other units for rental income.
No common charges: There are no monthly common charge (maintenance) expenses. Let’s compare a $10 million townhouse and a $10 million condo. With the condo, monthly common charges may be between $5,000 to $8,000. With the townhouse, there is no such expense.
Weimin’s article, Buying a second home in Manhattan
Disadvantages of a townhouse
Onsite staff service: The main disadvantage is there is no onsite staff or resident manager. Nobody will sign for Amazon packages or come fix the leaky toilet with a phone call. The townhouse owner may hire a part-time property manager but such property manager will not be onsite which means matters won’t be attended to immediately.
Maintenance of building: The townhouse owner is responsible for the entire building – cleaning up leaves, shoveling snow, putting the trash outside, maintaining the roof, exterior, boiler, mechanicals etc. Understandably a townhouse owner will be hiring out these services. But still, he has to arrange for these services. In an apartment building, there are 20 staff onsite to handle various tasks daily.
Should you buy a townhouse?
Ultimately this is a personal preference. Townhouses are very coveted because of limited supply. Do you want space and privacy or do you want service and convenience? These are the main questions to consider. For clients who are undecided, I always bring them to view townhouses and condos at the same price points. This helps with the decisioning process tremendously. Someone originally wanting a townhouse may decide on getting a penthouse condo while the opposite happens almost as often as well.
Weimin’s article, Investing in a Manhattan penthouse condo
What We Do
We focus on global investors buying Manhattan property for portfolio diversification and long term return-on-investment.
1) Identify the right buy based on objectives
2) Manage the buy process
3) Rent out or oversee the property
4) Manage tenants if applicable
5) Market the property at the eventual sale
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