Life Situation: USA, NYC. 25 years old sole dependent. Inherited IRA with a minimum distribution each year starting with just over 600k
Gross Salary/Wages: Student. Freelancing I've only had a minor job this year, also negligible.
Pre-tax deductions: None yet.
Other Ordinary Income: Currently i have just over 900k in a Merill CMA managed by the same group managing my familys assets for 30some years, my intention is for that to create 4k-6k a month (compound whatever little is left) to pay my current lifestyle bills. I haven't had the money there for even a quarter yet, so I haven't seen anything yet.
Qualified Dividends & Long Term Capital Gains: None yet, except that I have the minimum distribution from the IRA every year.
Rental Income, Actual Expenses, and Depreciation: Home owner maintence in a COOP building for 4,200/mo, various bills and food for about 800/mo, health insurance about 1000/mo (cobra) but is saving me roughly 1000 a month on my perscription medications.
Adjusted Gross Income: -6,000/mo
Taxes: Thus far I haven't had to take a distribution and this year have only been a student, so my account claims the 20k deductable from owning the apartment negated any taxes I have. Same guy has done my family taxes for awhile so he's familiar to the situation.
Current expenses:
Home ownership 70%
Health insurance 15%
Misc: 6%
Electricity/Heat/Water/Internet (dont have cable TV): 5%
Dog: 4%
No mortgage.
Expected ER expenses: Low if it happens while I'm covered by Cobra.
Assets: NYC Apartment - valued at 2.7m for probate probably closer to 3m (1800-2100 sqft 2BR 1 1/2 BTH view over looking central park city and fireworks). Inherited IRA valued at 640k, and an investment account I'll be calling my FA today about investing with about 950k. 175k in a 1% CD waiting for me to move it somewhere better (emergency fund). 30k dwindling cash (day to day fund)
All of my investments are invested across a broad range of stocks by some wealth managment group. On paper they both are moderate, 50-70% in equity, 0-50% in bonds. In reality, the IRA will likely compound and the distribution fill in any losses on the CMA while the CMA (hopefully) makes the 6% I need. I'm about to call my FA and have been talking to him, so suggestions on how to invest this that I should mention to him could help?
Liabilities: No loans.
Specific Question(s):
I wan't to rent out my old families apartment as I finish school so that I can move back here later on in life, build up my fiscal equity, and feel in general like I've done right to my family. It seems to either be this or sell, since it's not maintainable as a student. Possibly before money runs out I'd find the cushy CS job I needed but that's a guessing game with my motivation and plans on getting a degree.
My hope is to be able to passively mantain it with investments until I rent it out. This could take several months, maybe even a year as the transfer process in a coop is long and extensive and still not quite done, and then there's also the approval process for tenants. What I plan to do in the meantime as it transfers to fix up the parts of the house that need fixing.
I figure I'd do this regardless of rent or sale, so it's definitely what to do. This apartment has been in the family for 70 years, so there's alot of clutter, bookshelves filled to the brim. What kind of apartment should I be trying to create to create the ideal rental? My target would be a family, not college students. I've lived in with roommates before and would rather not be owner to the disaster it can become.
How bad an idea is it to hold out and rent given my situation? Some seem to think it's a bad enough idea that I sell the apartment outright with no future plans made. I may want to transfer schools, move to an entirely much cheaper state, or just follow the CS relocation jobs as I've heard is very lucrative.
I think this is feasible, and won't burst into flames sanz I do something stupid with the money like an expensive startup, but at the same time I'd like to be able to invest in such a thing if I think it's actually gonna turn out well.
So, I feel like I have a property with some potential for rental income, and even if not, I'd like to keep it due to sentimental reasons. I understand that there is a possibility I'll have to sell it if I plan to keep a certain lifestyle.
Anymore information I can give you?
If this plan does rock bottom, the stock market crashes while I'm unemployed and I find myself without an apartment, I'll probably go grow weed.