Unlike in other countries, Manhattan and Miami properties come with all kitchen appliances included in the final selling price of the apartment.

In Manhattan, in contrast to Miami, floors are included when buying new construction from the developer.

The closing costs estimate is approximately 3% of the purchase price without financing, 4.5% of the purchase price if financing, which is approximately 2% of the mortgage amount. This Closing Costs estimate comprises transfer taxes, as well as recording and legal fees. If purchasing offplan new construction, depending upon market conditions, it is customary for the buyer to pay additionally the seller's transfer taxes of 1.825% in NYC and a developer fee of 1.25%-1.75% in Miami.  



For Condos, common charges generally run from $0.70 and $1.10 per sq. ft. per month. Such costs include common area heating, electricity, and cleaning; water; basic cable; security; building insurance; and operation of building amenities (fitness center, concierge, lounge, pool, playroom, etc.).

Coops charge a maintenance fee, which includes all of the common charges plus taxes (which are not paid separately by the owner) and mortgage interest on the building, if any. The Coop corporation may have outstanding mortgages on the building (for a roof repair or some other reason) and the interest would be passed on to the Coop shareholders. Therefore, you will often see that a Coop’s maintenance charges might be higher (even after adjusting for the taxes that are included in the maintenance fees), since Condos, by law, are not allowed to take on debt.



Real Estate Taxes (or Property Taxes) are calculated on the assessed value – a value given to the property by its city government. A rate is then applied against this assessed value. The process is somewhat esoteric, but the rule of thumb is 0.1% of the purchase price per month in Manhattan and 0.2% of the purchase price per month in Miami.

Manhattan has a number of tax abatement programs for certain buildings that reduces taxes for 10, 15, or 20 years in some cases. See the Real Estate Taxes page for more information.

Miami has a homestead exemption for primary homebuyers of $25,000, but the value of such an exemption is quite insignificant. See more discussion of this on the Real Estate Taxes page.



If the owner decides to obtain a mortgage, then he or she will have a monthly expense that includes both interest and principal. Due to the nature of mortgage calculations, in the early years, the buyer will be paying mostly interest, which is deductible for US tax purposes. In the later years, the buyer will be paying mostly principal.

For instance, if the buyer bought a property for $1,000,000 and financed $500,000 at 5.5% for a 30-year fixed term, the total mortgage payments for the year would be $34,067 (or $2,839 per month). Of this amount, $27,332 would be tax-deductible interest. Over time, as the principal of the loan is paid off, the amount of tax-deductible interest will decline. In the beginning years, however, it is a very large expense to offset rental income.

For more information about mortgages, go to the Mortgage Financing page.



An owner should obtain insurance on the property itself as well as liability insurance. This cost is only a few hundred dollars per year. Often, the landlord will require his tenants to also obtain insurance, so risk to the landlord is mitigated.

In Florida, the owner of a Free-Standing Home would want to obtain flood and hurricane insurance.



In the US, sellers always pay the commission in a purchase transaction. The seller generally pays a commission of 6% of the purchase price, which is divided equally between the buyer’s broker and the seller’s broker. Therefore, buyers pay nothing to have us working on their behalf in a purchase transaction.

If the buyer decides that they want to rent out their new apartment, in Manhattan, they would pay nothing for our help in finding a tenant, since the commission (15% of the annual rent, divided equally between buyer’s and seller’s brokers) is customarily paid by the tenant. In Miami, however, it is customary for the owner to pay the commission (10% of the annual rent, divided equally between the buyer’s and seller’s brokers) to find a tenant.

Find out more information about renting your home on the Property Management page.





The US government allows the owners of investment property to depreciate the purchase price and the non-financing related closing costs over 27.5 years. For example, if the buyer purchases a property for $1,000,000 and has non-financing related closing costs of $25,000 ($1,000,000 times 2.5% noted above), the buyer could deduct $37,273 per year, or $3,106 per month, as depreciation. This is a significant non-cash expense that can be deducted from rental income.



The US government also allows an owner of an investment property to deduct the amortization of the financing portion of the closing costs over the term of the loan. This is also a non-cash expense that can be deducted from rental income.




Ultimately, with all the deductions (both cash and non-cash noted above) that the US government allows, in the beginning years, an investor who finances their real estate purchase will have negative taxable income (or tax losses). This is not to be confused with cash losses, since with a 40% down payment, an owner is likely to break even for cash purposes (e.g., generate neither cash income nor losses). These tax losses can be carried forward to years when the property is making income for tax purposes, offsetting such income and eliminating taxes for those years. Over time, however, cash income will grow as will the value of the property.


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