Buying an Apartment in a Mixed Use Building
Go Back To Previous PageBuying an apartment—any apartment—in New York City can be daunting. It can be rough even if your apartment is in a complex filled with friendly
neighbors. It gets even more intimidating when you want to buy an apartment in a mixed-use building in New York. But is it supposed to be scary? And are there any considerations you need to be aware of when you decide to get a mixed-use building? As it turns out, the truth is that it might be more hassle than you’d expect it to be.
What Is A Mixed-Use Building?
A mixed-use building is a building officially zoned for both commercial and residential purposes in New York City. This usually happens in one of two ways.
Either the building is new construction built with mixed goals in mind, or it’s an older building initially meant for commercial uses but later became mixed-use after remodeling.
Are Mixed-Use Buildings Common?
They are becoming increasingly common, but the truth is that there’s a little problem when it comes to buying a mixed-use building. Many buildings that are mixed-use in practice aren’t mixed-use on paper. At times, this type of fraud has led to severe problems for both buyers and sellers.
This means that there have been several cases where apartment buyers bought an “apartment” in a building they believed was mixed-use, only to find out their new “home” was in a commercial-only building. To avoid this, have your real estate agent double-check to see if it’s a mixed-use building.
What Can You Use A Mixed-Use Building For?
You can use them for either business or residential purposes, making them ideal for people who want to live and work in the same place. However, it’s not for everyone.
You need to know the perks and pitfalls of buying a home in a building like this.
Unequal Split for Common Charges
The most common trick shady developers plays is to retain the commercial unit for themselves or sell it to a related party. They’ll then write the offering plan in such a way as to give special rights and few responsibilities to the commercial unit owner. And one of the most common tricks played by the original developer is to specify limits on what common charges the commercial unit will be liable for in the original offering plan.Separate Utility Meters
One of the dangers of buying an apartment in a mixed-use building is that the commercial unit owner may use way more than their fair share of any shared utilities, such as water or gas. For example, what if the commercial unit is leased to an ice cream store that uses a lot of water? If there isn’t a separate water meter for the commercial unit, the residential unit owners might end up subsidizing the commercial unit owner’s extremely high water bill.The Perks Of Buying An Apartment In A Mixed-Use Building
Mixed-use buildings are hot on the real estate market in New York City, and it’s easy to see why, too. These perks below make it an excellent buy for the right person.
- Businesses aren’t likely to be there at night, so that you might get more privacy. These buildings are also less prone to noise
complaints at night because of that little fact. - Since businesses are pretty on top of things, they act as a good “neighborhood watch.” This can prevent the wrong crowd from moving in. Besides, who doesn’t like having a lot of professionals nearby?
- Getting funding from FHA loans and Fannie Mae is possible if you want a mixed-use building in NYC. However, the details can be pretty hard to get a grip on. At least 51 percent of the property will have to be residential for you to get an apartment via a loan.
- These apartments are often more affordable than all-residential buildings. If you’re looking to stretch your dollar, this will be a great way to do it, and you might even be able to get more space.
- You can write off a large portion of your apartment in taxes, and this is because it can be placed as a legitimate office space.
The Pitfalls Of Buying An Apartment In A Mixed-Use Building
While mixed-use buildings are significant for some, some pitfalls are too big to ignore. Thankfully, this isn’t always the case with every building under this label. To ensure you get the best home for your budget, avoid these major pitfalls below.
- There is a chance the “mixed-use” isn’t mixed. This is a rare occurrence, but there have been renters, and buyers ushered from their homes after finding out that they can’t live there. Doing your due diligence here is a must!
- You will not have peaceful nights if you have nightclubs as a neighbor. Though (once again) rare, it has happened in the past. Worse, you can’t call the police for a noise complaint as the nightclub owners often own entire buildings, and this has caused litigation in the past.
- Restaurants that share your building can put you at an increased risk for pests. Cockroaches and rodents are two of the most notorious ones that we can think of. However, it can also lead to other foul issues, such as the smell of cooking wafting in from the place next door.
- If you have beef with a business, it’s going to be harder to get them evicted. Companies are hard to evict, even if you have reasonable grounds.
How To Buy A Mixed-Use Apartment And Avoid Problems
Getting into mixed-use apartments isn’t precisely wise for everyone. If you want one, it’s best to ensure you have all the information you need. These tips can help you make the most of your apartment hunting.
Do Your Due Diligence
Please don’t believe the building owner when they tell you it’s mixed-use. Instead, check out what the official documents designate the area for. If it says it’s all commercial, you should find a new landlord.
If it genuinely is mixed-use, then you should take a look at other issues that it may have. Make sure it’s up to code and check for any problems.
Scope Your Neighbors
Look at the businesses in the same building before you move in. If you notice dingy restaurants or potentially problematic businesses, think long and hard about buying an apartment in the building.
In most cases, companies are pretty easygoing. However, if you get stuck with a business that is a bad neighbor, you’re stuck.
Go In With A Plan
A mixed-use apartment is one thing you must consider before going all in. Before you make an offer, sit down and ask yourself the following questions:
- Do I make a lot of noise during the day? If you do, businesses might complain about you, and you might be at odds with your neighbors if it could harm their business.
- Am I okay with the kind of businesses that are already there? If you’re looking for a family-friendly place with an adult store on your block, you might want to rethink your location. On a similar note, if you notice businesses that seem to have sanitation issues, run.
- How am I going to use my space? If you want to add a live-work space, you might want to plan your home’s layout before moving in.
Do You Need Help Finding The Right Place To Live?
You are not alone! These types of properties can be pretty intimidating. If you want a good selection of new homes or don’t know where to begin, you can call a real estate agent and talk to them. After all, they have the experience they need to steer you towards the right property.
