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Old 08-14-2013, 11:40 PM
 
28 posts, read 59,460 times
Reputation: 17

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Our family lives in a rent stabilized apartment. We been living in this apartment for 25 years. Our rent is 900 dollars per month and the market price is somewhere between 2.5x to 3x the amount. I know my landlord has asked other tenants who lived in my building to move out and 1 of them did because he offered a sum of money for them.


My first question is, is this legal to receive money from the owner of the building to move out? I read it is online and this is called a buyout.


My second question is why would anyone move out if the rent is stabilized? I understand why the landlord wants you to move out because your rent is stablilized and they would be collecting 2300/month in rent as oppose to your 900/month in rent. But if we want to rent the same place, it would cost 2.5x to 3x the amount. Thus the rent in 1 year is 10800 currently but if you rent the same apartment its 31200.


Assuming we move to another location, it still would cost 2000/month for the same location at the very minimum. He really wants us to move out. But if we do, wouldn't the amount we receive have to be a high amount since rent stabilized apartment is saving us 1400/month?


We have no plans to leave the apartment but the landlord keeps asking us many times. But if we then decide in the future to move, how much is the right amount? I can't imagine it worth it because if we get a similar apartment for say 2000 per month in another place, we paying an extra 1100 per month which is 13000 per year. I read online that most buyouts are usually 65k max but for our apartment, how much should a buyout be relative to your rent and the market value? I know they have to spend money to renovate the apartment so that will cost them money. But from what i read if an owner makes back their buyin in 2 or 3 years, then its gravy for them and buyouts are very good deals for them and almost never the renter of the stabilized apartment. Is this true?


Landlord first offered us 5k and then 10k and then 12.5k. We told them we weren't interested in moving at all so he went up and we told them we still was not interested. I thought in my mind, why in the world would we accept 5k when its going to cost us more than that if we go and get another similar apartment and then pay over 5k in total rent difference in just 4 months. We have no interest at the moment to leave but if we do in the future, is there an amount that is right? We know someone that lived a few blocks from us who live in a rent stabilized apartment and told the landlord he was moving and wanted his security deposit and the landlord said okay immediately. He did not know anything about the buyout and that he could have gotten money for it since he was already planning to move so the landlord was definitely happy he was moving. The reason why he was living in the rent stabilized apartment was because it was under his fathers name and they didn't live there anymore and it was just him.


I read a thread about this and ppl say this is gaming the system but how is it gaming the system if you don't plan to move? I assume its only gaming the system if you plan to move soon and just want the extra money? Would you say the person that we know who told the landlord he was going to move out after his lease ends and just wants his security deposit back stupid for not getting a buyout? Obviously he had no clue about it and was honest and the landlord was very happy but was it kinda foolish for him to not ask for one?


Also is there a way to have the landlord not keep asking us this? He spoke to us multiple times trying to convince us and we said we weren't interested many times. I thought even if we were interested, isn't the buyout he is offering us kind of a joke?
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Old 08-14-2013, 11:54 PM
 
204 posts, read 292,928 times
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I'm no expert but if your landlord is gonna be making over 20k more per year after you're out you should be looking to get way more than 5k, I'd be looking for 40k at least - especially since hes almost tripled his first offer already without you even negotiating.
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Old 08-14-2013, 11:57 PM
 
12,340 posts, read 26,017,873 times
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Get a lawyer who will negotiate the buyout for you.
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Old 08-15-2013, 12:16 AM
 
28 posts, read 59,460 times
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Quote:
Originally Posted by Abe Vigoda View Post
I'm no expert but if your landlord is gonna be making over 20k more per year after you're out you should be looking to get way more than 5k, I'd be looking for 40k at least - especially since hes almost tripled his first offer already without you even negotiating.

Yes we didn't even negotiate. He just kept saying 5k and then the next time went up to 10k. Then a while ago he said how about 12,500. I even told him we were not interested at all and he kept going higher. I thought those prices were still very low.


Actually i made mistake about the market rate. Its more like 2.5x than 3x so lets just say its 2.5x and thus around $2250 per month. So they are making $1350 extra per month if we leave and thus like $16000 a year.



Can anyone answer my other questions about the person that we know who didn't even bother with a buyout and just left and ask for his security deposit? And also is there a way to tell the landlord nicely we aren't interested? We told him a few times already but he keeps on asking.



Is 40k really the amount minimum for a buyout in this case? That number does seem right if we ever decide to move but kinda on the higher side. Because whne you factor them having to renovate etc its adding up costs.
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Old 08-15-2013, 06:38 AM
 
108 posts, read 119,284 times
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hold out for 40-60k that's what I saw most people i know got.
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Old 08-15-2013, 06:51 AM
 
Location: Manhattan
25,341 posts, read 36,840,879 times
Reputation: 12730
I am thinking in terms of $100,000 minimum.

Remember an $1100 differential will cost you $132,000 in only 10 years.

The landlord is not likely to opt for this because he cannot decontrol the apartment without putting a great deal of money into the place in capital improvements. Without capital improvements he can get only $1080 from the next tenant...LEGALLY. <wink>

I doubt you will reach a happy median with him.

Quote:

Yes we didn't even negotiate. He just kept saying 5k and then the next time
went up to 10k. Then a while ago he said how about 12,500.
He's talking nonsense.


How big is the place, Broadband?
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Old 08-15-2013, 07:02 AM
 
Location: Bronx, New York
2,134 posts, read 3,031,529 times
Reputation: 3209
I don't know what the maximum amount is but I would aim for the highest I could get. If you have decent credit scores and decent jobs you can take that money and use it for a downpayment. I see an opportunity to go from renter to owner here.


Quote:
Originally Posted by Broadband View Post
Yes we didn't even negotiate. He just kept saying 5k and then the next time went up to 10k. Then a while ago he said how about 12,500. I even told him we were not interested at all and he kept going higher. I thought those prices were still very low.


Actually i made mistake about the market rate. Its more like 2.5x than 3x so lets just say its 2.5x and thus around $2250 per month. So they are making $1350 extra per month if we leave and thus like $16000 a year.



Can anyone answer my other questions about the person that we know who didn't even bother with a buyout and just left and ask for his security deposit? And also is there a way to tell the landlord nicely we aren't interested? We told him a few times already but he keeps on asking.



Is 40k really the amount minimum for a buyout in this case? That number does seem right if we ever decide to move but kinda on the higher side. Because whne you factor them having to renovate etc its adding up costs.
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Old 08-15-2013, 07:08 AM
 
105,708 posts, read 107,700,939 times
Reputation: 79329
this thread was already started here by op.

//www.city-data.com/forum/renti...-our-rent.html
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Old 08-15-2013, 07:14 AM
 
105,708 posts, read 107,700,939 times
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Quote:
Originally Posted by nowyok View Post
hold out for 40-60k that's what I saw most people i know got.
it all depends on the situation. our co-op apartments are worth 1 to 2 million so we offer as much as 100k which is a fair buyout price for a stabilized lease .

however we are looking to sell them and not re-rent them..

had this been a pure rental building and all we would accomplish is to get another stabilized tenant at a higher rent we would offer a fraction of that 100k, maybe 10k at best if we would even offer anything at all.

Last edited by mathjak107; 08-15-2013 at 07:55 AM..
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Old 08-15-2013, 08:25 AM
 
Location: Manhattan
25,341 posts, read 36,840,879 times
Reputation: 12730
Quote:

had this been a pure rental building and all we would accomplish is to get
another stabilized tenant at a higher rent we would offer a fraction of that
100k, maybe 10k at best if we would even offer anything at all.
That's the way I see it too.
The landlord won't pay much and it would take a great deal to compensate the tenant.
So basically, a deal AIN'T gonna happen. The spread is just too wide.
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