Tag Archives: rentstabilization

Real estate, rentstabilization

Can a Manhattan rent stabilized tenant own a 2nd home?

Although, it might seem unfair,  a rent stabilized tenant who pays well below market  is allowed to own a 2nd home in Miami or South America or wherever they choose.  As long as the tenant lives in their stabilized apartment for 183 days per year, they can do what they want with their money according to NYT.

As a matter of fact, in my building, there is a rent stabilized tenant, that owns an apartment right next door to their rent stabilized apartment and allegedly they tried to combine the two!

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.

 

multifamily, Rentals, rentstabilization

NYC landlords score victory in courts in rent stabilization case

The New York Appeals court has confirmed that a landlord who deregulated an apartment back in 2004 did so correctly. The case had to do with the 20% vacancy allowance and how it is applied. The apartment was deregulated after applying the 20% vacancy allowance but a lower court had said the rent paid by the previous tenant needs to exceed the rent stabilization threshold. Previously, the court system had awarded the tenant over $100k in overcharged rent and that decision was vacated.

Real Deal coverage

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.

Investment, Upperwestside

How does a rent stabilized tenant affect a Manhattan townhouse’s value?

In an ideal setting,  a Manhattan townhouse will be delivered vacant and sold to a buyer who can convert it to a single family mansion, condos or a rental building. However, when a Manhattan building is conveyed with a rent stabilized tenant or a few rent stabilized tenants, then the buyer pool will narrow but it still has tremendous value. The factors that impact the value will be size of the apartment, likelihood of accepting a buyout, and what percentage of square footage, the RS tenants occupy within the building. The calculation of value is going to be based on the net operating income.(NOI). The NOI and cap rate will dictate the value, but the upside which the buyer/investor will evaluate will have to do the likelihood that the tenant might be bought out now or in the near future, the age of the tenant, and how likely they might have immediate family who will succeed them within the apartment.

For example, on a recent tour of Upper west side townhouses with an investor we looked a one building that was asking $5.4 million with 6 units 2 of which were rent stabilized. Within the same neighborhood, a 7 unit building was asking nearly $1 million more with all free market tenants. Both were both offered at an approximate 3% cap rate.

Now what happens when the majority or all of the building is occupied by rent stabilized tenants and the cap rate is extremely low or the income is not even covering the expenses, now you will see an even more narrow pool of buyers whose expectations for a discount go up as the rents paid by the tenants goes down as does the likelihood of a buyout. In this situation, a more thorough analysis based on current market conditions will need to be done by a Manhattan real estate broker experienced in the transfer of townhouses and multifamily properties.

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.

 

Real estate

Can you take over your relative’s rent stabilized NYC apt?

According to the NYT Ask Real estate column, the answer is maybe. You need to have a legitimate claim to the apartment. The advice is that if you have lived in the apartment for 2 years at the time that your relative leaves the apartment you will have a strong claim. If the person is elderly or disabled, you need to live there for one year.

From an investor or landlord perspective, I often get questions on apartments that seem to have a price of 1/2 or 1/3 of the market value and buyers inquire why. In my experience, this have been apartments sold with a rent stabilized tenant in place. If it’s a large enough apartment, it’s probably more feasible to see a relative moving in and sharing the space with the leasee for a period of time and then gaining succession rights keeping out of the owner’s hands for many years.  However, if it’s a studio, it might not be worth the trouble for a relative to gain succession rights. These type of investments are risky and should only pursued if you can support them as typically the rent does not even cover the monthly charges.

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