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We own a small studio in a walk-up co-op in Carnegie Hill and have been renting it out for 7 years. The co-op is now restricting rentals to 1 year with a possible 1-year extension, so our tenant will not be able to stay any more than another year. We bought the place with the idea of eventually using it ourselves as a pied a terre, and this seems like the time to try that out, but we're not sure. The cost of the place for us is about $800/month (maintenance + insurance; there is no mortgage), and it would be really convenient to be able to pop up there any time we want. If we sell now we might get back what we paid, but probably no more than that. I've talked it over with the tenant, and she's okay with having to move, but also might be interested in buying it herself if we decide to sell.
So what to do? I realize it's a personal thing, but sometimes it helps to think out loud on the 'net. Some of the trolls will probably come up with something snarky to say, but whatever. Just curious if anyone here has had experience maintaining a pied a terre and feels it was worthwhile, or not.
You should first consult with a real estate attorney to see if you should be "grandfathered in" to the old bylaws and allowed to continue to rent out your unit. You weren't violating the coop bylaws by renting it out for 7 years, correct? Then, it is my sense that you SHOULD be allowed to stick with the old rules and continue to rent.
They usually can't change rules like that on you because it will substantively affect your use of the unit.
Yes, we have done everything by the book. They changed the rules once limiting subletting and grandfathered in those of us who were already subletting, but this latest change specifies that this no longer applies -- we can only extend the current lease one additional year. So this isn't legal? It was my understanding that co-ops can change the rules at any time, and that is the chance you take when you buy into one. I think they made the change because they want to refinance and found they couldn't get the rate they needed with they number of sublets they had.
Why not enjoy the place when you want or need to. $800.month wont buy many decent hotel nights in the UES. Give it a try.
We had a pied a terre that we kept for four years. We didn't use it enough to get our monies worth but in the end it turned out fine because it appreciated in value and the profit was used toward another apartment. we sold it to someone in the building who was known to the board. The only issue was showing they could afford the larger apt. If your current tenant wants to buy the apt and you will break even then I think you should go for it. You will save on the commission, she will have an easier time passing the board assuming financials are fine and you can use the funds to buy another apartment which permits pied a terre and rentals so you continue to have both options.
We bought te apartment with the goal of eventually moving in. It didn't happen with the first apt but did with the second.
My husband and I had a studio (about 600 sf, with a good layout in a prewar building) that we used as a pied-a-terre. Our main house is in DC, and I work as a freelancer, so it was easy for us to go up frequently. In fact we spent so much time in NY that last year we bought a one-bedroom, and are selling the studio.
But the studio was great for this purpose. It didn't require much upkeep but had enough space to keep a decent amount of stuff there, making it easy to take last-minute trips. It was like having a nice hotel room available any time. I'd recommend it highly.
My building went through the same process, also due to a financing scare. How big of a building, and how many subtenants? If you're in a smaller building and you have a long-term, well-liked subtenant in place and the other sublet units all decide to sell to owner-occupants, the board may look the other way.
Our official policy (for financing reasons) has to be only one unit sublet for a period of exactly one year (no more, no less), with no renewals. In the case of extreme hardship, we will also consider a second sublet unit. In no case can there ever be a third sublet unit. Mortgage companies need to see this policy, in writing, to be comfortable lending to a small building.
Right now, we don't have any sublet units. If someone had a valid reason to sublet (e.g., someone whose circumstances changed), had a tenant we all liked, and no one in the building wanted to sublet, I am 99% sure we'd allow the tenant to stay until someone else asked to sublet.
You may want to see how it shakes out with the other sublet units first.
Thank you for the comments. nycsometimes, we are in the DC area also. Your scenario is what we had envisioned. There are lots of things we'd like to do up there that would be easier if we had access to our apartment, so we're leaning in the direction of keeping it. And yes, sma10022, hotels on the UES are scarce, and hotels anywhere in Manhattan are pretty pricey but especially there.