Do I sell my inherited co-op?

June 29, 2010 11:13 AM

Do I sell my inherited co-op?

I inherited my mother's co-op. It's in Bensonhurst; a nice (lower crime than just about all the rest of the borough,) residential, working-class middle-of-nowhere Brooklyn neighborhood. I grew up in said neighborhood and still live there -- I'm renting a place walking distance away -- but no longer wish to. I hate my hour-long commute. I hate the lack of anything to do here. And I especially do not want to live in that co-op as between the miserable, miserable things I associate it with and my mother dying in it, the vibes are just too harsh and I'm admittedly too sensitive to really feel comfortable living in it.

There's a bit of money left on the mortgage (a little over 10% of the price she estimated it is worth,) which I can polish it off in one fell swoop thanks to money that's been left behind to me. The market is shitty, and I know that. I also don't plan or have the capability to move outside of New York City. However, I do not want to be a landlord. I'm 25, disorganized and confused regarding my life, and, more importantly, live in a city where the law highly protects tenants. Which is great, but I do not want to be the landlord in a situation where the tenants might be the Bad Guys and it'll cost me out the ass to get anything done about that.

I consider myself a pragmatic guy, but I do not want to own this property. I'd be responsible and get a financial adviser and invest the money the apartment would sell for. I have close family friends in the real estate business, so I can get hooked up with a realtor who won't screw me.

Am I being too emotional? Should I move out of my hole-in-the-wall apartment and into a rather nice co-op? Or should I sell it and get this enormous monkey off my back?

posted by griphus to home & garden (30 answers total)

Why not rent it out until the market improves? You could hire a property management service to take care of the details.
posted by Blazecock Pileon at 11:16 AM on June 29, 2010

Selling it makes complete sense. Sure, the market's a little shitty, but you don't want to own it and it's not like you need to recoup the money you spent to buy it yourself. Getting a property management company to handle it for you and renting it out would be quite reasonable, but so would selling it and no longer having to worry about it at all.
posted by Tomorrowful at 11:18 AM on June 29, 2010

Oh, I guess I should mention that the co-op is an apartment in an apartment building. There's also a permanent maintenance fee.
posted by griphus at 11:20 AM on June 29, 2010

Do you really care if you get the best price for it?

My point of view with real estate is that, unless you want to be a professional landlord, it's not an investment, it's a place to live. You don't want to be a professional landlord, and you don't want to live there. Sell it, invest the proceeds wisely, and go live a happy renter's life in a neighborhood you like better.

If you keep the co-op, it sounds like it will be more of a burden to you than an asset. Keep your memories of the co-op from when your mother was alive, and sell the place.
posted by ocherdraco at 11:22 AM on June 29, 2010 [16 favorites]

ocherdraco summed up my thoughts perfectly.
posted by ThePinkSuperhero at 11:23 AM on June 29, 2010

I consider myself a pragmatic guy, but I do not want to own this property. (griphus)

Also, it sounds like you want permission to do the "non-pragmatic" thing. If you don't want the apartment, selling it is pragmatic. If you are looking for permission from someone, I hereby give it to you.
posted by ocherdraco at 11:24 AM on June 29, 2010

You make it clear in your question that you don't want to own it or rent it out (although renting it out probably won't be as bad as you think the building has a super). So, it is great that you know a real estate broker that you are comfortable with, discuss this with them.

Also, very sorry to hear about your mother. My thoughts are with you.
posted by cestmoi15 at 11:26 AM on June 29, 2010

this is the worst seller's market in a generation.
rent it for now, until the market improves
posted by Flood at 11:26 AM on June 29, 2010

OK - here is an idea if you do not want to rent.

Do an owner financed sale. You hold the mortgage.
You will get a monthly check, and you will get more money, because the sale price is amortized in your favor.

You are not a rent - they bought the house, and have to take care of it.

If they screw up, and stop paying - foreclose on the loan and get your house back.
posted by Flood at 11:28 AM on June 29, 2010

Sell it. Just because housing in NY is down doesn't mean its cheap. And you don't want to live it or be a landlord anyway.
posted by JPD at 11:28 AM on June 29, 2010

I'm sorry about your mom - my mom died recently too and I'm in a similar boat in that neither me nor my brothers want her property. We are selling it - which is fortunate because in 2010 there are very few states that have estate or inheritance taxes or they are capped at a point which would be "mansion" level properties. You may be in this boat.

What I would do in your shoes is consult with a tax adviser/accountant/financial adviser and find out which is the most financially advantageous way to proceed considering that you neither want to own the property nor lease it. They can figure out pretty quickly if it's better to pay it off with inheritance and then sell it or sell it and use the proceeds to pay it off. In either case, you've got nothing but time on your hands: you have a place already and the only pressure to move is your own.

That's where it gets interesting - you could choose to stay in your current digs until the property is sold and then decide, based on the proceeds whether or not you want to go house/condo hunting. Or you could decide to rent for a while longer. Interest rates on mortgages are pretty dang low, right now so it might make sense to (1) refinance her place until it sells with an ARM which will drop the payments and use what you have as a down payment to a place you can afford and where you want to live. Or heck, you could plan to be a vagabond for a while. Why not?
posted by plinth at 11:30 AM on June 29, 2010

Flood - no offense - but NY real estate relative to history is not cheap. OP could figure that out by calculating the rental yield. Dollars to Donuts it is less then 5%.
posted by JPD at 11:31 AM on June 29, 2010

I hear you that you don't want to be a landlord. And I hear you say you don't want to own this piece of property. But I don't hear you say you don't want to own any property. It seems like you are overlooking another possibility, which is to sell the apartment and use the proceeds to buy something you like somewhere you'd rather live? If the apartment is 90% paid for, the proceeds ought to generate a sizable down payment that you could use to buy a place somewhere you'd rather be, shorten your commute and so forth.

If you have close family friends in the real estate business, they could advise you as to what you could buy that would keep your monthly housing expenses (mortgage, maintenance, taxes) roughly on par with the rent you are paying now.

If your mother's apartment was someplace you could afford to live in and maintain, in an area you liked, would you be thinking about keeping it?
posted by ambrosia at 11:36 AM on June 29, 2010

If you really can't stand living in your neighborhood and don't want to be a landlord, the best thing for your sanity would probably be to sell it, especially if you could then move to a neighborhood that you actually want to live in. But I'm not a realtor and I don't live in New York City, so I don't know how feasible that is. I would find a financial advisor or some other Person Who Understands Money Stuff, and get some actual professional advice before doing anything, so that you aren't totally screwed ten years down the line.

If you end up finding that it's not currently an option to just get out of Bensonhurst altogether, I would think about moving out of the hole-in-the-wall apartment and into the rather nice co-op. But I would make the most drastic alterations that I possibly could before moving into it. Sometimes if you totally change the way that a house or space looks, it makes it easier to move past the bad associations. It's like you get a clean slate or a fresh start or something. (FWIW, I grew up in a household that included my grandmother and my great-grandmother. I spent several years sleeping in the bedroom that my great-grandmother died in -- creepy at first, but three coats of paint, new area rugs, and different furniture went a long way towards dispelling the weirdness. My mom still lives in the house, although her mother and grandmother have both died there and the house in general has a lot of creepy/miserable associations with it. We tend to deal with it by completely throwing out all the furniture, redoing the floors and decorations, etc. -- if it looks like a different house, you can make yourself believe that it's a different house).

P.S. I'm sorry to hear about your mother; that sounds like a really shitty situation in general and I hope you're doing OK.
posted by kataclysm at 11:36 AM on June 29, 2010

Admittedly, I am not up on the real estate market in Brooklyn. Your market should dictate what you do.

In Florida, and in much of the country, this is a really bad time to sell. But, NYC often seems to play by its own rules.
posted by Flood at 11:39 AM on June 29, 2010

But I don't hear you say you don't want to own any property.

Fair enough. Let me clarify: I do not want to own any property.
posted by griphus at 11:40 AM on June 29, 2010

If you're currently renting and have a perfectly good empty coop sitting right there, then logically it makes the most sense to get over it and move in.

If that's not your first choice, the next most logical answer is to sell it - but I would only advise you to do this is you can take the proceeds and buy something else. You are in the most cut-throat real estate market in the US. You have a tremendous leg up on the ladder here. If Bensonhurst isn't where you want to live, can you buy something with the money - a studio, anything - somewhere you do want to live?

Even with maintenance, the ability to live your life with no mortgage is a glorious thing. Please don't, in the midst of not knowing what to do, lose sight of that.

Otherwise, I might if I were you, get a mgt company and hold on to it.

Oh. On preview: if you don't want to own any property, then obviously sell it. The question of what to do with the money becomes, just so you know, as large an issue as owning a home. But perhaps you have fabulous or prudent plans for the cash already!
posted by DarlingBri at 11:42 AM on June 29, 2010

yes because buying a home is always prudent financially.

Jesus Christ - the guy doesn't want to own property isn't interested in living where the co-op is. Any other advice other than Sell makes no sense.
posted by JPD at 11:52 AM on June 29, 2010 [1 favorite]

Emotional well-being and $$ are rarely commensurate goods -- so the argument that you are 'losing money' by selling now rather than holding onto it doesn't hold much water for me. If you don't want to own it, don't -- sell it, take the money, and invest it in something else if you don't need the cash for living expenses.
posted by modernnomad at 11:59 AM on June 29, 2010

Move into your mother's place. If you can pay off the mortgage and pay just the maintenance fee, that's fantastic. And you can wait till the market gets better to sell. Bensonhurst isn't by any means a hot neighborhood, but someday it might be, right?
posted by roomthreeseventeen at 12:02 PM on June 29, 2010

Fair enough. Let me clarify: I do not want to own any property.

So, sell. There isn't even a question. Yes, it's not the smartest financial decision, but life isn't all about money.

Just remember: you're still grieving your mother's passing -- and I'm very sorry, all best to you and yours -- so post-mourning you may regret the decision you've made. If you actively decided you don't want to own any property well before her death, then selling seems like a decision you won't regret to any significant degree -- but if you haven't thought about it before, then your decision now might be influenced by your mourning.
posted by davejay at 12:02 PM on June 29, 2010 [3 favorites]

Yes, it's not the smartest financial decision, but life isn't all about money. (davejay)

Repeated for truth.
posted by ocherdraco at 12:03 PM on June 29, 2010

Oh! And one more thing: it may take a while to sell, in this market. So, consider moving out of your hole-in-the-wall and into this co-op while you look for a new apartment elsewhere, and you'll save money in the short term -- plus if it turns out you like it (you never know!) you can cancel the sales process. If you keep the old apartment at first, you can always say "wow, this was a mistake" and go right back to your old apartment.
posted by davejay at 12:05 PM on June 29, 2010 [1 favorite]

How much anguish are you willing to take for the chance, not even the guarantee, but the chance at more money in the future when the RE market may get better? Sounds like a lot less anguish than owning this co-op will cause. Sell. Whatever you get from it will be more than you had previously. It is not like you are making a trade of the money for your mum and you need to maximize the amount to justify your feelings for your her. Based on what you wrote, I cannot see any reason to hold the apartment.
posted by JohnnyGunn at 12:38 PM on June 29, 2010 [1 favorite]

I'm sorry for your loss.

I've been where you are. Sell it.

Home ownership is a major responsibility, and an emotional drain when you are committed to it because you bought the place *you* wanted.

It's much harder when it's a place that's full of conflicting emotions, sadness, and the responsibility becomes a burden that you do not want.

Yes, you can rent it out, and hopefully the rent income will cover the mortgage, taxes, insurance, upkeep, etc. You'd have to figure out the financing on that, as to whether it makes sense.

But honestly, unless you really want to keep it, sell it. Sell it. Sell it.

And don't worry about market timing, the market turning around, etc. If you're going to sell it, sell it now - the market's not going to turn around and take off anytime soon - massive increases like we saw in 2000-2007 were the result of an artificial bubble that we're still paying the price for.

But do yourself a favor - if you do sell it, don't just blow that money. Take a portion and have fun with it, but sock the rest of it away. It's your mother's legacy to you, don't go through it without a reason.
posted by swngnmonk at 12:42 PM on June 29, 2010

I'm not on going to comment on the sell/don't sell angle. But I will speak to the "miserable, miserable things" associated with living in a place where your mom died. My bf and I are living in his childhood apartment, now that both of his parents are dead. His mother died in 2006 after a long illness, after which he moved in to help take care of his elderly father. While his father's health started to fail, the apartment became more and more damaged as the building "renovated". Ongoing leaks, massive water damage, no heat for three weeks during the winter... calls to city and lawyers. It was like a terrible analogy to his parents' mortality, with everything becoming sick and dark and depressing.

The difference is that this was a rent-control apartment, not something his parents owned. After his dad died, my boyfriend was eligible to take over the lease, which he did, because the only other option was to leave. But there were a lot of complicated emotions at play. The first six months were occupied by dealing with estate issues, and 40 years of his parents accumulated possessions. Then I moved in, and somewhat ironically, almost immediately began suffering serious health issues and repeated hospitalizations which delayed the repairs to the apartment even further.

But eventually, the apartment was painted and repaired... and during that process, we began treating it as "our" apartment, instead of his parents apartment. We've bought new furniture, rearranged rooms, changed colors. We've kept many of his parents nicest things, but re-purposed or rearranged them. We've also had lots of people come visit (including his sister) who had spent much of their youth visiting that apartment, and I was totally nervous that they would find it disappointing that things had been changed, but everyone loves it. And we love it.

In the midst of all this, I ran across this article in the NY Times about the adult children taking over there parent's homes, which rang very true to my bf.

I know this doesn't address the particular issues about the neighborhood. But it might let you reframe the issue of living there if you choose to hold off on selling.
posted by kimdog at 12:56 PM on June 29, 2010 [3 favorites]

In your shoes, I wouldn't care whether property values were down or up. As an inheritance, this is a windfall--you didn't invest in that property--and it's probably not going to matter much to you if the windfall is a little bigger or a little smaller. If I felt as strongly as you do about neither living in it or renting it out, I'd sell it for whatever I could get and let it recede in my rearview mirror, with perhaps the additional bonus of using the cash to move someplace I'd rather live.
posted by not that girl at 1:30 PM on June 29, 2010

Let's assume the apartment is worth today some arbitrary number, $250,000. The only question you should ask yourself is, "If I didn't inherit this apartment and I had $250k in the bank would I buy it?" The answer seems to be no. So sell.
posted by JohnnyGunn at 1:53 PM on June 29, 2010

Sell it. It makes the best sense for you for the framework you have. Spend some, invest some and cherish the memories of your mother.
posted by arcticseal at 2:21 PM on June 29, 2010

You'll sell it for whatever it's worth in this market. Nothing to stop you from turning around and buying a different apartment, which will also be priced for this market. Or invest the money wisely, and potentially profit from the market's recovery.

I'm sorry for your loss, and I think you're making a perfectly reasonable decision. If you feel weird about selling the family home, before it's transferred, go there and so something to remember Mom, whether that means drinking a bottle of good champagne, reading poetry out loud, or smoking a cigarette.
posted by theora55 at 3:25 PM on June 29, 2010