Monthly Archives: January 2018

Investment

Thinking of raising your tenant’s rent?

If you are a small time landlord, you will want to read the NYT article about calculating your tenant’s rent. The takeaway is while a landlord may even live in the same house as a tenant and may know their tenant personally, they should still try to keep the rent as close as possible to the market. One owner who happened to purchase his properties years ago when prices were low, passed that savings on to his tenants if they didn’t bother him. Holding on to a good tenant is always wise.

Several years ago, I had a rental apartment on the Upper west side and charged slightly lower than the market rate to rent the apartment quickly which I did. I raised the rent when I could about 2-3% per year to stay close to market rent. Then when the rents decreased, the tenant who always paid on time and never bothered me, wanted to leave to reduce her monthly costs. I asked her how much and she said $150 and I reduced the rent. That saved me thousands of dollars to paint and also money that I would have lost due to vacancy. That tenant stayed 7 years from first lease to when I sold the same apartment.

 

Selling tips, Townhouse

Thinking of selling your Manhattan townhouse?

Here is one simple tip that will help you when you are selling your Manhattan townhouse. Take a look at your certificate of occupancy (coo)and see how it complies with your actual usage. You might have a coo that says 3 family  but you have 4 apartments. You might have a coo that says SRO and you have a 2 family. The ideal is that you have a coo that agrees 100% with your usage.

If you have plans to sell and have a cushion of time, getting this in order before you list the property, will have an impact on how much the next buyer is willing to pay.

What if the Department of Buildings does not have a coo on file for your property? Now it’s more complicated. What is the history of your building as per other city agencies such as HPD? What is your building registered as assuming it’s a 3 family or higher? How many years have you owned the property and would a letter of no objection assist in clarifying this issue?

Consult with your attorney who should be very knowledgeable in these matters as well as a real estate broker experienced in townhouse sales who can assist you with the steps to take here to increase your marketability and what will add value and what will not.

 

Battery Park City, Buying tips for your NYC apartment

Thinking of buying in a building with a land lease?

If you are thinking of buying in a building where they lease the land below the condo, only do so if there are sufficient time left on the land lease, meaning 30 years or more and you understand fully the risks.

In general, the land price can skyrocket at the end of the land lease in the case where the owner is a private individual or company so have an attorney very knowledgeable in these matters advise you. Also, have a buyer broker who knows what questions to ask to save you unnecessary attorney expense. How much does the land lease go up annually and for how long are those rates locked in?

In Battery Park City, the owner of the land leases of all the buildings is the Battery Park City Authority, a non profit set up to create and preserve the neighborhood of Battery Park so there is not an interest to raise the rents beyond the realm of reason. Having said that, you and your broker, plus later attorney should exercise caution and make sure that you are getting exceptional value for your purchase.

For example, as a result of paying rent on the land, your monthly charges might be higher than a typical Manhattan apartment.  If you are going to be paying a higher than normal monthly charge then the apartment should be less expensive than something similar where the monthly charges would be on par with Manhattan averages. Also, you might not see the typical appreciation that you would see on other Manhattan apartments.

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Buying tips for your NYC apartment, Investment

Thinking of buying a Manhattan condo for investment?

If you are thinking of buying a Manhattan condo for investment with the objective to hold for rental income, here is one simple tip that is often overlooked.

In general, after paying common charges and taxes, you will gain an approximate 2% return annual. So an apartment that you acquire for $2 million will yield approximately $40,000 in net income. In some cases, you might have an even lower return.

One type of property that you might consider is an apartment with enough space to add an additional bedroom.  With the right design, you can rent an additional  bedroom/den for a higher income just due to the increase in bedroom count.  I had one listing where they converted the dining room to a 2nd bedroom and as a result we were able to rent the apartment for $4,200 whereas similar size apartments without the conversion were renting for around $3500. This made the return on the apartment based on the current market value closer to 3%.

You will need to see if the layout will allow it. Usually a space will need to have a minimum of 750-800 sqft to accomplish this but it will also depend on the current layout. A dining room or a dining area will be an ideal area to make the additional bedroom as long as there is a window and enough space.

With more people than ever sharing apartments and families remaining in Manhattan, this a nice way to gain an additional rental income and increase your yield on the property.

 

Harlem, Listings

146 West 121 street in contract

The Mt Morris landmarked townhouse has now entered contract. The asking price was $2.2 million for this home which needs a complete renovation. The current status of SRO will likely undergo a change by the buyers who will convert to 1 or 2 family most likely.

The sale price was over the asking price and occurred quickly despite the typical seasonal slowdown.

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CentralParkWest, Conversion, Upperwestside

Children’s Museum coming to 361 Central park west

According to The Real Deal the church at 361 Central Park west, which was once slated to be converted to condos was purchased by the Children’s Museum of Manhattan for $45 million. The site was purchased by the developer in 2014 for $26 million and after hitting roadblocks with the approval process to convert to condos, they decided to sell. The community will have a chance to be part of the approval and design process as the Museum will need to go through the city approval process as well.

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