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Once again, for some people who are apparently allergic to facts: landlords' profits continue to increase on RS apartments, and they made on average over $500 A MONTH per unit in 2017, the year for which the stats were just released:
so how many rent stabilized apartments do you you own ?
i love when people speak in terms of straw people like one outcome fits all landlords ... they do the same thing in the investing and rent vs buy threads ... like these supposed results and outcomes hold true for each and everyone .... all i know is if that is true someone has to much rent coming in and someone has my share because i can say without a date we don't clear 500 a year at this point let alone 500 a month on the rent.
but we bought them to sell not for income ... so situations are not one size fits all ..
Once again, for some people who are apparently allergic to facts: landlords' profits continue to increase on RS apartments, and they made on average over $500 A MONTH per unit in 2017, the year for which the stats were just released:
It is so funny When you have those who always want to cap other people’s livelihoods but their income should be as high as the market allows ....it is always someone else who should take the hit
This state and city won't learn what every economist on both sides of political fence have said for ages; government meddling in any market causes distortions and more problems that solves. One huge reason NYS rental market is so messed up is that very little of it is free market. Over 60% if rental housing is either RC, RS, NYCHA, Section 8 and or other various schemes.
Do you know what 60% is to a politican? A super-majority. RS/RC and whatever other schemes exist aren't going anywhere exactly because it's such a huge voting block. Unfortunately, it's the law of unintended consequences that often forces change in democracies and if Universal Rent Control goes through, that's exactly what will transpire.
Once again, for some people who are apparently allergic to facts: landlords' profits continue to increase on RS apartments, and they made on average over $500 A MONTH per unit in 2017, the year for which the stats were just released:
$500 a month is $6000 a year. A 1-bedroom apartment in a halfway decent area in the outer boroughs cost $300K+ to buy. That works out to only a 2% return on investment for the landlord. Money markets and CDs have better returns than that.
$500 a month is $6000 a year. A 1-bedroom apartment in a halfway decent area in the outer boroughs cost $300K+ to buy. That works out to only a 2% return on investment for the landlord. Money markets and CDs have better returns than that.
Well, then, even granting your numbers, don't buy it. If you buy a building without examining the rent roll, or assuming the rent roll will somehow magically improve drastically, then you are too stupid to deserve to earn any money in a capitalist system. Why should anyone feel the need to rescue you from your terrible choices in business?
I don't have a problem with the concept of landlords getting a return, but people--most of whom aren't even landlords themselves, but people eager to carry water for their betters, apparently--constantly lament as if RS buildings were hopeless black holes of money, when in fact the average RS landlord is pocketing a decent profit. Most landlords didn't buy yesterday, nor did they buy with all cash. If you only put down 20% of $300K, $6000 a year turns out to be a 10% profit.
no investors pay any where near market for stabilized apartments .. 30-40 cents on the dollar is the normal range. if succession rights are involved it could be 25 cents .
investors don't buy stabilized apartments for rental income , usually they are co-ops with stabilized tenants .. you typically buy a package of them . then offer lease buys outs ... you sell the ones that free up at market and the rest become a waiting game ...
we hopefully have a buyer for the two remaining we have at .32 cents less the broker fees and transfer fees. it can be highly profitable even though rents may be near break even . our buyer will get 2.10 million in value for 675k
Last edited by mathjak107; 04-08-2019 at 02:56 AM..
Renters are paying theoretically for wear and tear. Even without MCI’s, it’s a reason that the profit outside of mortgage for old RS buildings are so low and that can also fluctuate given expenses. People who own condos/co ops have to pay a maintenance fee to maintain the premises of a building and amenities.
Maybe landlord should start charging maintenance fees, so renters start taking some acccountabilty of where they live. It’s one of the reasons nyc is so dirty, renters usually don’t care about their neighborhood because they view it as temporary (even though they most likely will live here forever).
When I looked into buying a co-op (approx. 20 years ago) it seemed a bad idea due to all the restrictions on owners including monthly maintenance fees and who/for how long one can rent the property to if one decides not to live there. So as a renter (which I decided to stay as long I continue to live in NYC) I don't expect to be paying maintenance (which is part of my rent!) or building improvements from my own pocket as that is for the landlord to pay out of his rental earnings IMHO.
When I looked into buying a co-op (approx. 20 years ago) it seemed a bad idea due to all the restrictions on owners including monthly maintenance fees and who/for how long one can rent the property to if one decides not to live there. So as a renter (which I decided to stay as long I continue to live in NYC) I don't expect to be paying maintenance (which is part of my rent!) or building improvements from my own pocket as that is for the landlord to pay out of his rental earnings IMHO.
That isn't how things roll with rental properties.
In normal (market rate/unregulated) apartments rental income should cover regular operating expenses. That is things like utilities, routine maintenance, minor repairs, dealing with wear and tear, that sort of thing. When those expenses increase (say cost of heating oil rises) a LL normally would pass on such an increase by raising rents. Then again he may not, depending upon various circumstances.
Major capital improvements are just that; an expense so great it cannot be covered by funds from daily operating expenses. Major capital improvements as we discussed earlier also raise value of building. OTOH if they aren't done it can lead to a decrease in value.
In terms of accounting there is a difference between "improvements" and regular operating expenses/minor repairs. Replacing a damaged kitchen sink is a regular operating expense. OTOH ripping out the entire kitchen and putting in new, is an improvement.
Under first situation a LL may not take a increase (certainly cannot under RS), but the second he can because it improves value of the apartment/building. This why many RS tenants would rather sit in a busted apartment that hasn't had major work done since it went up when God made dirt and spit. They just don't want to pay the capital improvement increase.
Back in the day when things were different LLs of RS units often didn't give a darn if tenants installed entire new kitchens and otherwise did major work on the apartment. Why should they? They were getting someone else to improve their property. Today if you try that stuff you'll find yourself quickly in housing court and likely evicted.
Finally to speak to the first part of your post about co-ops; yes many do have restrictions on rentals especially long term.
From the board's point of view people buy into a co-op for just that reason; to live cooperatively with neighbors. Renting means transients coming and going which is the opposite of ownership.
Most buildings don't have a problem with a family member or friend house sitting while shareholder is away.
at the central park south apartments we have sponsor rights which are nice to have ... since our shares came from the original sponsor directly , his rights are passed down to us like a partnership would , as long as we never live in the apartment .. once we live in the apartment our sponsor rights die .. that means we require no board approval to sell or rent to anyone we like , we also fall outside the rules , like the building requires 25% down to buy ...we can require our buyer to put nothing down ... we can sell for pennies on the dollar too and the building can't say it is not high enough .
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