One-year versus Two-year lease

[ddhboy]

Originally Posted by 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?

Sign the two year lease. Market renters like to moan about how their "subsidizing" their rent stabalized counterparts (they aren't) but ultimately this option will be the best as of now. A year from now the market rent is going to collapse anyway (see: Williamsburg) so tentants, stabalized or market renters should be able to get some pretty good concessions if they agree to long term leases (I heard a story about someone's 5K a month rental going to 1K, but if he stayed in the building for 5 years and paid all 5 years of rent up front, apparently because the rental company was broke and needed the cash.

[mathjak107]

the math dosnt workout because a 2 year is more expensive then a 1 year for the protection of having a limited raise the following year. your paying more and making a bet..... its very mis-leading but a 2 year lease lately works out to more money then a 1 year ... most folks dont realize you pay a premium over and above what a 1 year would cost if it went up the same the following year...you pay a premium on a 2 year for the protection that the rent just may go up more then the increase was on the first year,,

picture this , but im only using the percentages for illustration.. you take a one year and rent goes up 2% , next year it goes up 3%,,

you take a 2 year... rent goes up 3% first year and 3% 2nd year ,,,you pay a premuim because your betting the increase will be more than the premium in rent your paying to protect yourself against a higher increase...kind of like buying insurance....i havent found a 2 year to pay off, only cost you more but if im correct most folks take a 2 year and assume they are saving money

[oopsiedoop]

That's because people, including experts, are talking out of their a* as far as I can tell. I DID the math. You are not paying more upfront and saving in the long run. Not according to the math, anyway. I wish I could get someone who claims the two year lease is cheaper to sit down and prove it to me with the numbers -- then they'd see it doesn't in fact work the way they claim it does. Or I would. My math proves it doesn't.

Originally Posted by lcarter7

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

[oopsiedoop]

So even according to your own speculation your position about the two year lease is wrong.

Originally Posted by ddhboy

Sign the two year lease. Market renters like to moan about how their "subsidizing" their rent stabalized counterparts (they aren't) but ultimately this option will be the best as of now. A year from now the market rent is going to collapse anyway (see: Williamsburg) so tentants, stabalized or market renters should be able to get some pretty good concessions if they agree to long term leases (I heard a story about someone's 5K a month rental going to 1K, but if he stayed in the building for 5 years and paid all 5 years of rent up front, apparently because the rental company was broke and needed the cash.

[Chava61]

In the past I always signed a 2 year lease. But this year I signed a one year lease as it didn't seem that it would save me any money to sign a 2 year lease.

[mathjak107]

Originally Posted by oopsiedoop

That's because people, including experts, are talking out of their a* as far as I can tell. I DID the math. You are not paying more upfront and saving in the long run. Not according to the math, anyway. I wish I could get someone who claims the two year lease is cheaper to sit down and prove it to me with the numbers -- then they'd see it doesn't in fact work the way they claim it does. Or I would. My math proves it doesn't.

Yep, thats what i said above...your paying a premuim over and above what signing the 1 year lease and then renewing would run because your locking in a rate that may or may not be cheaper then the following year....

think of it like locking in a price on your fuel oil....

if you buy today your price is based on todays spot price.... if you lock in the price you dont lock in at todays spot price but at a price based on where the futures markets thinks prices will be in 6 months to a year...those prices are usually higher then buying today... you pay a premium for the security of locking in.

my feeling is the better deal for years now has been the one year

[marysol rodriguez]

I have been living in a rent stabilized apt since 2003 and I am registered with dhcr. I moved to this apt with my boyfriend at the time and his parents lived here. We lived with them for a while and they informed the owners this. The owners were ok with this but they had an emergency and had to fly out to Florida to handle personal business. His parents informed the owners we will be sending the rent to them while they were gone. I paid all the bills in the form of a personal check for the duration of the lease. They returned but with the his mother's husband's parents died they then had to to to puerto rico and stayed there for a while as well to take care of the property left to them. They flew back to new york and went to meet with the owners in person to ask them if they can remove them off the lease and leave us with the apt as is. The owners agreed and gave us a lease in both our names . We have been living here with a lease in our names . The son and I parted ways and I continue to live here. He is in Florida and in prison from what I heard. I have paid the rent here all this time now we are under new owners and they say I have to sign a new lease at the market value of this apt. they also say the lease I have is not a lease because leases come in fourty pages.

I have the lease which the new owners signed before they asked me to sign a new one as a new tenant at market value price for this one bedroom apt. The owners took over this building in October of 2009 and my lease renewal was as of September 2009. I sent the new owners rent on September rent then they told me the old owners are to get the september rent so I told them in an email to put that check toward another rent and I will pay the old owners directly the september rent. I have spoke to the old owners and they state they did not receive this payment. Now the new mgt says I still owe them a month when I do not because they cashed that september rent. I asked for a certified copy of the front and back of the check paid out to the old mgt as prof and they still have not given it to me. this has been a year of nothing but stress and harrassment with this new mgt and I am under so much stress. I asked to meet with them in person but they say they have no time for me and that they did me a favor by letting me live her because I was not married to there son. they said I do not have succession rights to this apt and that the the parents can move back any time. This mgt is crazy!!!! they have been looking into ever tenants rent back 3 years they also looked back at my rent and amended my lease at a lesser rent charge . then to turn around and say I am not a tenant and I should sign a new lease. I am still waiting for my new lease it was due september of 2010.

this is a long explanation of what I am going though with this new mgt but it is unbelievable how these pp make up there own laws. I have not reported them to DHCR because I am affraid. What should I do and what do you suggest? also note that I used to pay 828.40 and my new rent is 742.40 after the new mgt amended it.

[mathjak107]

just checked the last two years the increases are the same for 1 or 2 years,no premium.....
prior to that 2 year was more

[Chromekingz]

Here's are my thoughts and my calculations.
My experience is that it depends on the year and
how long you plan to stay in your apartment.
I am in my rent stabilized apartment for 20 years.
My initial rent was 990.29
I did the calculations if I did a one year lease every year and if I did a two year lease ever year.
The results are: One year every year my rent would be $2,023.14
Two year leases every other year would be $1787.88
Over the 20 years depending on how large the per cent was I ended up doing a combination and my rent with my renewal will be 1745.47.
So my recommendation is look at the percents and decide each renewal.
One year may save in the actual year over a two year, but in the long run my rent would have been close to $300.00 more now.
Hope this helps

[Kefir King]

Over a very long period of time, people have benefitted from the longer term becausue each and every increase is based on a smaller base rent and the effect compounds over the years.
Of course this does not pertain if the two year lease is very close to double the one but trasitionally it has been lower than it is today. Nor is it important if someone hops frequently from place to place.

It's s a close call and nobody would fault someone taking 3% over 5.75%.

There are imponderables...a 1 year lease is more convenient to walk away from given catastrophe like job loss , or falling in love with someone with a rent controlled 3 bedroom etc.

And there is always the possiblility that the Board might next year realize that we are in an inflationary economy with prices actually rising at more than 6% a year and act accordingly.