One-year versus Two-year lease (apartment, renters, condo)

[libralibra]

My rent-stabilized apartment's lease is up for renewal and I don't understand the advantage to signing a two-year lease at a 5.75 percent increase over a one-year at a 3 percent increase. Over the course of a year it will be about $500 more we pay this coming year. How much would the rent have to increase the following year to justify paying the extra 2.75 percent starting this year?

Is there an advantage to a two-year lease in a rent stabilized apartment?

[Viralmd]

Do the arithmetic. If you signed a two-year lease, you'd pay more up front, but in the long run you'd save some money. Because you'd likely be signing a one-year lease at a 3% increase then, after another year, pay another 3% increase, which is on top of the first renewal lease's increase.

[Carbro]

Actually, for stabilized apt. right now, I would definitely sign for two years. I expect, with the price of everything rising so fast now, that when the Rent Guidelines Board sets the next increase, it will be substantially higher. What you do when you choose a 1- vs. 2-year renewal is gamble on whether next year or the year after will have the higher increase.

One year, when I renewed for a shorter lease, I really lucked out. It took me out of a cycle that was hit by a really major increase one year.

[smoothdude]

I'm trying to figure this out myself and I did do the math but it doesn't agree with what you guys are suggesting.

My rent will go up 4.5% for a 1 yr lease or 8.5% for a 2 year lease. I did the math assuming that when I renew again next year it will be 4.5% again for next year...and figuring it all out would cost me about another $400 total.

The thing is from the way I understand it, is that I'm gambling that the NYC laws for next year won't allow the renters to say, increase the yearly rent to like 5.5 percent per year or higher.. I am in a rent stabilized (or maybe controlled I always forget which one) apartment.

Thanks I'm interested to hear more feedback before I send off my contract.

[oopsiedoop]

I an exactly the same position and the math does not compute at all -- even on a higher rate next year -- even in three years.

Say my rent is 1000 dollars, and the increases were 4 or 8 percent this year (just to make things simpler, the principles are still exactly the same):

This year I pay 1040
Next year, even if it goes up to SIX percent, a full two points higher than this year, I will pay a higher rent than I would if I'd signed a two year (1100 roughly), BUT I will have SAVED the equivalent $20 a month amount this year, AND it just might not go up to six percent.

I ran these numbers for three years at 6 percent and I'm still doing the same or lower than paying double the increase at once. I don't know about four years, but what kind of rent stabilization would it be that had increases going up 10 percent or HIGHER???

What really irritates me is I emailed Metropolitan Council on Housing and the Rent Stabilization Board and neither one answers.

[nyctc7]

Originally Posted by oopsiedoop

I an exactly the same position and the math does not compute at all -- even on a higher rate next year -- even in three years.

Say my rent is 1000 dollars, and the increases were 4 or 8 percent this year (just to make things simpler, the principles are still exactly the same):

This year I pay 1040
Next year, even if it goes up to SIX percent, a full two points higher than this year, I will pay a higher rent than I would if I'd signed a two year (1100 roughly), BUT I will have SAVED the equivalent $20 a month amount this year, AND it just might not go up to six percent.

I ran these numbers for three years at 6 percent and I'm still doing the same or lower than paying double the increase at once. I don't know about four years, but what kind of rent stabilization would it be that had increases going up 10 percent or HIGHER???

What really irritates me is I emailed Metropolitan Council on Housing and the Rent Stabilization Board and neither one answers.

I think we should get Marilyn Vos Savant on the case.

[mathjak107]

i think the one year is a better deal usually... your paying a premium on a 2 year lease to lock in the same rate for both years and your betting that the increase the 2nd year will be even higher than the percentage you got on the 1 year now .... i dont think its a good deal with inflation falling and deflation even starting to poke up its head.


i just got screwed on trying to lock in propane prices for the winter in my pa home. i though i was smart locking in the price when oil dropped.. problem is though when you lock in they dont use todays spot price, they use the futures prices going out a few months and those are way higher. im probley paying 100 bucks a month more now then if i didnt prebuy based on the futures contracts

[mathjak107]

Originally Posted by Viralmd

Do the arithmetic. If you signed a two-year lease, you'd pay more up front, but in the long run you'd save some money. Because you'd likely be signing a one-year lease at a 3% increase then, after another year, pay another 3% increase, which is on top of the first renewal lease's increase.

its still cheaper on the one year assuming the same increase the 2nd year

10,000 dollars x 1.03= 10,300 1st year
10,300 x 1.03 = 10,609 2nd year

total rent for 2 years 20,909


now lets do 2 year

10,000 x 1.0575=10,575 1st year
10,575.00 2nd year

total for 2 years 21150.00

[scatman]

Signing 2-year leases gave me more time to save money to buy my own apartment! It also kept me, at the time, in Park Slope for 15 years.

However, I was in a studio that was very crowded. The stuffiness gave me some health problems, all of which was gone when I moved into my 1BR condo. I may have benefitted with a 1 year, having to get out of that studio.

You have to look at the benefits and tradeoffs and 1 v. 2 year and how it may affect you. 1-year gives you little time, but if you don't like your apartment, you can jet sooner. 2-year locks you in longer, but you have time in your apartment to either offset an increase or save for something else.

[lcarter7]

I'm still not sure what would benefit me more; signing the one year lease or two.