Why Do People Own Pied-á-Terres?
There are many reasons why someone may want a pied-á-terre. The reason could be completely practical. For instance, one parent may have a family that stays full-time in an ideal community that is a few hours outside of the city. Instead of uprooting his family for work, perhaps the parent keeps a small pied-á-terre for after work, staying for half of the week.
It could also be a place to stay when taking care of elderly parents. If one is wealthier, a pied-á-terre is great for a place to crash for people who do not live in New York or in the US, but frequent the city enough that it becomes worth it. Also, if you live in the greater New York area but not in the city, it could be a fantastic way to spend weekends in the city and not have to drive home at the end of the night.
Where Do Most People Own Pied-á-Terres?
The neighborhoods that are likely to attract wealthy people outside of the city or the country are usually the most widely-known, tourist-oriented neighborhoods in all of New York. Though pied-á-terres can be found in all boroughs, they are mostly found in Manhattan. The following Manhattan neighborhoods tend to be most popular for pied-á-terres:
- Upper East Side
- Central Park South
Co-ops vs. Condos
For buyers who will be the only ones using the apartment, both condos and co-ops work. Both types of residences prefer that their residents have a commitment and vested interest in the building, so that is an important aspect to consider. Typically, co-ops do not allow subletting and frown upon short-term rentals such as Airbnb. It makes sense in some ways, as part-time residents may not treat the building or rules with the same respect that they would if they were living there full-time. Co-ops also usually request US tax returns during the application process. For this reason, international tourists who are looking for a place to crash in the city would probably be better off in a condo. This applies to people who are interested in subletting their unit as well. Generally speaking, co-ops will be more strict with their rules surrounding all different aspects of the residences.
Key Considerations for a Pied-á-Terre
For pied-á-terre owners who want to sublet their apartment or list it on Airbnb during extended absences, there are some key considerations that may not be applicable if you were living in the apartment full time. Consider what visitors, short-term tenants, and future buyers might want.
- For instance, if you can afford it, try to buy a place with convenient access to the train whether you use it or not.
- You may never cook a meal at your pied-á-terre, but keep at least a small stovetop so that guests can cook something without needing to use a microwave alone.
- You’ll probably want a place with a dedicated mailroom and doorman, so that any packages or important paperwork that arrive do not end up in the wrong hands.
- Your finances will be scrutinized to a higher degree when applying for financing. This is because your secondary residence will be a lower financial priority than your primary residence, naturally. For this reason, the banks are taking a larger risk, unless your finances are really solid.
- You may end up paying condo association fees, renovation fees, and more hidden expenses for something you won’t end up utilizing as much as your neighbors.
- Look into pet policies. Even an apartment that accepts dogs may have dog size or breed limitations.
- A new pied-á-terre tax is being considered in New York. The law would inflict a 0.5-4% annual tax on the market value of the pied-á-terre above $5 million if the property is valued at an average of over $5 million each year for five years, and is not the owner’s primary residence.
- Co-ops would be taxed at 10-13.5% of the value exceeding $300,000 in the same case if it is a pied-á-terre.
If you’re looking to buy a second residence in New York City, Metropolis Moving can help. Our team has earned a strong reputation for handling relocations with care and diligence, and we have the customer testimonials to prove it. Get your free moving quote online or call us at (718) 710-4520 to discuss the specifics of your move.