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I live in an west village alcove studio that I like just fine, love the neighborhood, but have a gf moving in and she wants more space. The landlord offered all the rent stabilized tenants a buyout offer last month and after several weeks of back and forth he came up with a figure that was agreeable to me but I just can't bring myself to sign after seeing what the rental market is like in Chelsea/West Village. Are there ANY rent stabilized apartments left out there on the market or have landlords just snatched them all up. I'm afraid if I drop $3k on a one bedroom the rent will go up after the first lease renewal Are there landlords that offer leases with set increase limits anymore? I saw one ad that claimed rent stabilized for the next 15 years. thanks!
yeah get a j-51 building. and call me and pay me the fee :D
My management company has rent stabilized apartments, no brokers fee.. feel free to email me at CCAPITUMMINO@MPI-RE.COM. We own and manage buildings in Brooklyn Heights, the Upper West Side, Flushing, Midtown, Chelsea, Clinton, Washington Heights, and the Upper East Side. Let me know what areas you are interested in!
WestVillager, welcome to the Free Market, where every year at lease renewal there's a surprise! Landlords can, and will, try to squeeze as much out of you as they can. And of course you can expect annual rent hikes of at least a couple hundred bucks. I'd give up the girlfriend before I'd give up the RS lease.
Without knowing the buyout amount, it's difficult to say whether this is a good idea. Ideally, you'd take the buyout and put a downpayment on another apartment (to own)--which would fix your monthlies (maintenance increases notwithstanding, but which are less than rent increases). Everyone I know who has accepted buyouts has done just that.
How long have you been with this girl? I'd have to be pretty in-love to give up the west village.
Well it'd be low in the six figures. Just enough to put a down payment on a place and pay off some cc debt if I'm lucky but taxes would eat away a bunch. I'm seeing listings that are livable around west village /chelsea for the high $2-3000 range which combining our current rents would just about equal $3200 a month. I don't pay utilities either.
That buyout better be at least $200k depending how much rent you are paying. I know a dude with a huge one bedroom paying $700 across the street from SALVINO. He ain't going nowhere
MIBNYC: Well it's not $200k but my rent's over double that and my place isn't huge it's a studio.
there are calculations you can google that are good guidelines about how much a buyout should be. much of it depends on what the legal rent can be increased to, etc.
The buyout should be enough for a down payment on a similar apartment in the same neighborhood.
Buyouts are taxable as income, so be sure to gross up the amount if you have a particular dollar goal in mind.
true, true. and keep in mind that the buyout will likely change your tax rate for the year and bump you up.
matt is right. and, honestly, if you can get that, take it and buy (assuming you want to stay in new york). there is no better way to stabilize your monthly housing cost and control increases. i'm in a cheap stabilized place (i pay about half of market value). it is legally mine, not a sublet. in the event my landlord wanted to buy me out, i'd take it and happily move on with my life. "golden handcuffs" is right.
Alan is right. I forgot about the tax liability.
Therefore, if you're looking for $100K, the buyout should be around $175K.
Unsure .. could you put a link for calculating buyouts ? If u can thanks
Now what buyout should my friend get for the 1 bedroom that he pays $700 a month across the street from SILVANOS ? He is 66. I believe thats the west village
I'll have to search for the link. If I recall, it was something like five years multiplied by the rent increase projection. Meaning: if the landlord can raise the rent 1000 a month by getting you out and de-stabilizing (which involves some renovation cost, of course) then it's 12,000 (one year of rent increase) times 5. So, 60,000 buyout.
There are so many factors to consider. Prime neighborhood? More money. Trying to sell the entire building? More money. Like any deal, it's ultimately about the worth of something, both literal and emotional.
An older tenant should warrant a larger payout. He's more protected by law after the age of 65. A 700 square foot one bedroom in the West Village? Valuable. Even more so considering the potential of succession rights.
I knew someone who had a similar sized/priced space in Hell's Kitchen (when we still called it Hell's Kitchen) and it was during a spell a number of years back when venture capitalists were buying up buildings for conversions. After much back and forth and much misery, they got close to 200k to leave. Crazy.
I also know a guy who had a small (400 sf) one bedroom on Prince street in Soho. He paid 800 or so. One day he decided he wanted out of New York, made one phone call to his management company and got a check for 40k. Five minute conversation. He was leaving either way and they were happy to recover the apartment.
Personally, I think it's weird to solicit a buyout. It feels totally unethical to me. But I know plenty of people who see it much more simply and make great arguments for the mutually beneficial outcome for everyone involved. I don't know. It's a strange system wherein this is possible and we're even having this conversation.
Unsure ... that was very helpful. You da man !! ... My friend was thinking of moving from that 1 bedroom back to his home in Jersey since he only collects SS. I offered him 100k cash if he can get me on that lease but it seems he really likes it there. We'll see !
OK, I've revised my advice.
DUMP THE GIRLFRIEND.
Here's why. Any relationship with a woman selfish enough to force you to give up a rent stabilized apartment is doomed to fail. Eventually she will screw you, and unless you've wisely BOUGHT your new place (WITHOUT her funds, that you can afford on your own), you'll be stuck in an overpriced rental you cannot afford after you've kicked her self-absorbed ass to the curb.
Then you'll end up as one of those tragic stories of middle-aged men forced to live with 8 roommates in an apartment in Sheepshead Bay, or in a lovely, affordable flat in Peekskill -- where your life will forever revolve around the 5:28 out of Grand Central.
In the end, girlfriends will come and girlfriends will go, but a good piece of real estate will always be with you.
I must say I agree with Matt.
Me too. Perhaps he's described an unlikely worst case scenario. Perhaps you won't really end up in Sheepshead Bay. But the heart of his argument (namely, that she's making a pretty intense demand) is true. I'm on the conservative side when it comes to money (so adjust my argument for that fact) but I think the smartest and kindest thing you guys could do is to stay in that apartment (however small it might feel) and use it as a wonderful opportunity to save, save, save. Split the low rent, individually sock away as much as you can. Then, when you're ready to marry and combine funds (or if not marry--I know I sound old fashioned--to make an equally solid commitment) you'll have a downpayment on a home. It just seems insane to me to make a lateral move (alcove studio to one bedroom) and waste all that money on rent. It is to both of your benefit to be smart about this. I have no idea what your financial situation is, but this economy is dodgy and unpredictable. How great it would be to use this as a temporary compromise that will ultimately provide you something much better.
I'm guessing your girlfriend just hasn't thought this through and isn't meaning to put you in such a crummy position. But my Valentine's Day card reads as follows: Love means never having to say "I"m sorry I can't go broke for you".
So have her move in while you pretend to help look for another apartment. You're unlikely to find one, and meanwhile while you stretch out the process, your rent is cut in half. If the relationship can't withstand close quarters for a while, better you find out before throwing a huge asset down the pot.
I don't think she's asking for relationship advice regarding her girlfriend, so much as real estate advice.
excellent relationship advice.
I mentioned a scenario similar to this on this board about a LL trying to evict a tenant from a RS because they claimed it wasnt his main residence meanwhile he stayed half the time at his fiance place about 10-15 blocks away. He wanted the relationship to work of course but giving up a good RS is not easy if shit goes south.
For all this brass-tacked talk of how to value a relationship against an RC/RS relationship - has anyone considered the real cost of hanging on to said apts? On my nice-ish UWS block, there are about half-a-dozen single people in their 70s who have lived in their studios for all their adult lives. Possibly having made those calculations and finding the apt to be a better bargain than any relationship.
Or maybe they're just confirmed bachelors, and spinsters who couldn't find a suitable husband by the time they turned 30.
Moving in together is a first big step. A larger fresh apartment would be a logical choice to hedge your chances of long term success in a relationship. The question is, will your combined incomes comfortably cover the change in monthly expenses? Will you both continue to live the same life style and save for your future? Have her move on in to tiny town. Modify your current digs for maximum storage and comfort. Begin a search together for just the right place at the right price...no rush. Allow the opportunity to present itself. You can always cut a deal with a LL to relinquish a RC.
If by accepting a buy-out you will gain a nice "nest-egg" (that you don't currently have) why not consider taking it and moving to a more affordable part of the city? Just a thought.
@nyc10023 .. real cost ? .. I would rather sacrifice staying with a RS or RC costing me up to 1k a month and contribute with a partner towards a bigger place if i can. I currently have nice RS studio by Tudor city only paying $900 with utilities included and i use it for family or friends visiting so they won't have to spend $300 a night at hotels. Also use it when my wife goes nuts on me : )
And for yourself 183 nights each year. Otherwise you're a lawbreaking supervillain.
10023 The interesting thing about people in their 70s who have lived their entire lives on your "niceish" UWS block, with few exceptions beyond CPW, Riverside West End, most of of the UWS blocks were hardly "niceish" 50 years ago when those people moved in. They could have been more accurately described as "slums" to use the contemporary terminology.
"Moving in together is a first big step. A larger fresh apartment would be a logical choice to hedge your chances of long term success in a relationship. The question is, will your combined incomes comfortably cover the change in monthly expenses? Will you both continue to live the same life style and save for your future? Have her move on in to tiny town. Modify your current digs for maximum storage and comfort. Begin a search together for just the right place at the right price...no rush. Allow the opportunity to present itself. You can always cut a deal with a LL to relinquish a RC."
Sorry, I disagree with this.
This isn't as simple as merely "moving in" and finding a larger home.
I've long said unmarried couples should NEVER buy real estate together. But making the decision to give up a rent-stabilized apartment is just as significant and financially impactful as buying or selling real estate.
If the happy couple REALLY needs more space, they should wait until after they're married, and have saved up a sufficient down payment to buy a place. HE being forced to give up an apartment that could be saving (the both of) them four figures a month just so she could have more space for her shoe collection is not a good enough reason.
I know people who went thru the HELL of the 70's in LES, ALPHABET CITY and HELLS KITCHEN and still are there. Now look at those neighborhoods. They deserve every right to keep those gems of apts.
"They deserve every right to keep those gems of apts."
OK, let's not get silly now.
I've yet to see any RC or RS apartment that would in any stretch of the imagination be called a "gem".
@NYC MATT .. have you seen how some folks have fixed those apts thru the years ? Have to admit that some folks have them looking disgusting. Also a gem could mean the rent they are paying...HELLOOOOOO !!
Okay. I'll add this: Moving to a 3k a month one-bedroom will also put you out over 10k between broker's fee, first/last month, security, movers, etc.
I have no problem with leaving RS apartments and moving on with one's life. I think more people should do it when the moment or incentive is right. I just don't think wanting a slightly bigger space in the exact same neighborhood (or nearby) for significantly more monthly outlay (and no guarantee of rent increase) is one of them.
You could hire someone to come in and make your space more accommodating/beautiful/organized for less than it will cost you to move.
Maybe your girlfriend would be open to that.
As well, your landlord might have another/bigger RS place in another another neighborhood. Many landlords have multiple RS places. You could negotiate a buyout AND a move into another (maybe less desirable) stabilized place. It's worth asking. He gets the village apartment back and you get a regulated alternative.
Unsure ... 1 bedrooms are looking more like 3.5 to 4k. I don't think 3k can really get you in a doorman, elevator building. Your ideas are good but some people just don't trust their landlords because some are plain doucebags. Can you believe my friend came to the landlord with his RS in the west village and he offered him 25k ???
"You don't need to pay a broker fee, and there is no "last month" rent."
Not for shitboxes, no. And yes, there often is "last month" rent.
Please. I helped a friend find a place recently in the east village. Those shitboxes (dirty, sixth floor walk-ups with no closets) came with a 15% broker's fee. It's insane.
@unsure ... by your experience we can all see why some folks hold on to those RS or RC. Now if you want to move to MD, PA or FL and still hold on to it and sublet then thats wrong.
Well just to clarify, I'm by no means being forced by my gf to leave my apt, she's willing to move in here but just sees this as an opportunity for me to pay off my credit card debt and move into a place that would be more accommodating. to hopefully having a child in the next couple of years. The main factor is my finances aren't adequate enough for me to buy a place or go larger on my own without this payout (I'm a freelancer rocked by the economic climate of the last few years but she has a solid corporate job). I'm also factoring in my interest payments to the cc companies into monthly expenses so that's like another $400 right there.
I like this apartment but never thought I'd be here for decades when I moved in. It's sad to me so see all the shitty tiny walkup apartment options that are out there in my neighborhood for over twice the rent.
I'm probably being a little theatrical about this! But I do believe there is a lot of extraneous expense and risk in giving up this apartment. Keith's suggestion about taking the money and moving to a cheaper hood was smart, but I get the feeling they want to stay in the village/chelsea area. Because we don't know they buyout amount, it's impossible to say. The op's hesitations suggests it isn't a gigantic payoff. Otherwise, I suspect he'd sign without reserve.
I'm guilty of hyper-caution. Especially when it comes to money. A couple I know just bought a place. They were incensed at the liquidity requirements of boards; most of whom wanted a full two years of mortgage/maintenance liquid post-close. They found it restrictive and overbearing and bossy. I, on the other hand, thought, "THANK GOD!". Thank God they are making you have that. EVERYONE should have that. That board is saving you from yourself. They aren't trying to protect you, of course, they are are trying to protect themselves. But in doing so they are forcing you to enter this arrangement in a solvent, responsible state.
On a good day, I'm a voice of reason. On a bad day, I'm an epic buzz kill. It's not a sexy quality.
Just to clarify I'm the one that wants to stay in this area, I've been here for 16 years and it's my favorite part of the city. She's got a perfectly nice decent-sized 1 bedroom in Clinton Hill that's a $150 a month more than I pay here in the WV that we could move into for the time being. Her building is older but has an ev and in only 3 years since she moved in the apts in the "luxury" glass box that recently opened next door are $3250 for a 1 bedroom.
"most of whom wanted a full two years of mortgage/maintenance liquid post-close"
This is what EVERYONE should have in savings *at any given time*, all the time!
Seriously ... for a $2400/month mortgage/maintenance or rent, we're talking less than $60K. For a $96K HHI, that is really not a very big savings anyway.
And by the way, I'm talking *savings* -- over and above what you have in your 401(k) and other investments.
@NYCMatt .. many people do have that amount in CREDIT CARD DEBT !... SAD
True. And anyone who has been through a rough patch, financially speaking, will tell you that having that cash cushion in the bank is worth more in peace of mind than anything you could buy.
I'll actually take it a step further (since the 90-year-old-depression-era-grandma part of my personality is in full swing) and advocate for buying slightly less than you can afford and being realistic about neighborhoods you can afford. There is no shame in not living in Soho. There is no law that states a person has to borrow the maximum amount a bank will lend them. When I was looking to buy, I was constantly struggling with this nagging concern over what other people would think of where I lived and what my purchase reflected about my success in life or lack there of. It was all very subtle, but I totally had those feelings of, "Well, this place is slightly out of my budget, but it's such a good area and it'll appreciate and I'll eventually get a raise and I could blah, blah, blah..."
I'd feel excited, then terrified.
Finally, I had to smack myself over the head and trust my instincts, not my fears.
None of this, of course, has anything to do with the original post...
Except that this guy's instinct is not to give up his current RS rental. And that tells me something.
Your buyout from a surrender agreement can be treated as a LTCG, not OI, so your take home estimate is a bit low.
Native: I have spent time talking to the oldies on the block. Slum - no, grubby - yes. It was chockful of single people/couples with modest incomes in small walk-up studios, many of the buildings owned by LLs with small portfolios. Yes, I understand the need to save $ whenever possible and to build savings. Yes, it's true that an RS/RC apt in NYC is worth more than the 5x diff. in rent.
But if no romantic relationship is ever worth giving up that studio (supposing that cohabitation is impossible for whatever reason in that space) or that is the very first thing that comes up, then there is a price one pays. Unless you're determined to stay single forever or you're happy with fleeting romantic relationships. If the ability to keep that cheap apartment was the single determining factor to stay unattached or childless, I can't say I feel that much envy of the low rents.
How much should this buyout be?
easy 350k !!!
If that last example isn't proof that the rent stabilization system is busted, I don't know what it. If the goal is to keep up with costs, it has clearly done a poor, poor job of that.
@Somewhere .. RS is busted ? How ?
Hmm, well they're sticking by their original offer even though I requested more cash. So trying to contemplate my options taxing is the biggest issue, will it be taxed as income or some kind of capital gains. I've had a rough couple of years financially, don't make much of a salary as a freelancer and don't wanna lose it all on taxes.
Live life ....take a risk ...move on...give the apt up.
Or you will be living in the studio by yourself when you are 70(if you make it that long)
Real catch 22! Unless you know you want to die in that apartment, you might want to explore buying a place even if it means moving out of Manhattan - where rents are rising fast too. If you think you might want to have a family, something to consider although I know a family (parenst, 2 children who make a 1 bedroom 700 sq. feet work).
Very good point, Tommy.
Now might be a good time for him to explore Brooklyn or Queens.
And hopefully by now the girlfriend is history.
If you're going to take a buyout, it should be to purchase a place. What your landlord is offering should pretty much cover a down payment. Start looking at places. Moving to another rental -- in the New York area -- would be insane. Either buy or stay put.
...or I should say at least 75% of a down payment, depending on what you're looking at.Start looking at places, and when you see something you like that you can afford, take the buyout.
Well they specifically told me the buyout would not be enough to "buy my own place" in their words I'm open to buying but as an underemployed freelancer with cc debt (though that would be eliminated by buyout). What're my odds of getting a mortgage? GF/family would probably need to cosign. I saw something nice in BPC but the monthlies were pretty high.
An underemployed freelancer with cc debt who is not married should not give up his rent stabilized apartment. Shift happens. See:
I thought you said your buyout was going to be in the 6 figures? It will be taxed at the lower capital gains rate (not as income). If you don't have a steady income to show (it's fine to be a freelancer as long as your financials add up to what's needed), getting a mortgage would of course be tougher, would come at a higher interest rate. But even if you got a mortgage, and you might not rights now (you should pull your credit reports and scores to see how you stack up) you'd have to pass the co-op board, which will examine every detail of your finances.It seems that for now you should stay put until your work and financial situation stabilizes. Why don't you sort of move in with your girlfriend, but keep your place? Spend enought time there so that it's still your primary residence. The buyout will always be possible, even in a few years from now. They're not going to suddenly not want you out. Don't feel prssured. Stay put till your stiuation stabilizes. Again, the buyout will still be there.
GF or family would probably need to co-sign . . . . . I'd really be cautious about giving up this apartment since you're at a disadvantage financially in this situation. GF would be able to co-sign; GF wants more space. I'd suggest you get more income & get your finances in order before you contemplate giving up this great deal where you're obviously very happy. Best of luck to you.
agree waveda, sit tight where you are.