Renting from Owners in conndo buildings

The "pros" are you are likely to get a much higher end unit...no one is going to put top-notch finishes into a unit unless 1) they plan to live in at some point or 2) they plan to flip it. OK, there's not much flipping going on now, but there were a LOT of condos built 2-3 yrs ago with that in mind, that are now rentals. If you're looking to rent a high-end unit, and don't mind paying up, but just don't want to buy yet (think prices will continue to fall, aren't sure how long you'll be in NYC, etc) renting from a condo owner is a great idea.

Another pro is that your neighbors will tend to be wealthier, more responsible, and less "low end" than in a rental-only building.

Cons include:

- You are "riding blind" when the lease ends: The owner may want to sell, occupy the unit, have a child who's going to college in NYC move into the unit, etc.
- Remember, leasing is NOT this person's full-time job. They are not that experienced in it. As a result, some are really hands-off, respect your privacy, but SOME unit owners - whew boy! In my experience, rent from middle-aged men with a lot going on in there lives. Twice, I rented from older yentas who were COMPLETE busy-bodies and made life hell. It was like I was their damn son, they were bothering me so much! I eventually said to one "I don't think you undertand how 'renting' works!". So if you're gonna rent from a unit owner, PICK THE PERSON CAREFULLY!

Kermit, I'm a big fan of renting non-rental units: quality is much higher, and because of people's irrationality about paying fees in place of higher rent, prices can be much better.

In terms of application fees, it (like the broker fee) is negotiable. On the renewal thing, say you want a 3-year lease with one-sided options to terminate with 60-day notice with pre-specified rent increases. Even though you may not end up there, that'll ferret out other intentions the owner might have. When you see a unit, ask and brokers tend to be upfront about how long an owner is looking to lease. More often than not, it's indefinitely.

I am moving into my second condo rental shortly.
The pros-
- As you observed, I find it to be a better space for the money
- Also the building itself seems to be more maintained, cleaner in general
- If you work 9-5 hours, you'll find the neighbors to be more "professional" and less "transient".. less weird sounds at weird hours
- More neighborhood options.. certain areas of the city have few or no doorman rental buildings, you have to rent in a condo

The cons-
- Lots of fees - $400 application fees, $500-1000 in "moving fees"
- Longer process - management company approval can take up to 2 weeks (yes, absurd).. So have lots of lead time.
- Owner could decide to sell (ours did, after saying he would like to renew)
- Owner really have very little (or no) obligations regarding renewals
- Neighbors can seem a lot less friendly and more rude than my old rental neighbors (I guess thats why they bought in a condo instead of a coop?)
- Dealing with individuals instead of an anonymous corporatation. At least the corporation will generally behave in a predictable, logical manner (hopefully). Individual humans can act.. in any way.

This has all been very helpful. Thank you all!!

My takeaway is that you can get nicer units for the price but as steve123 so aptly expressed, there is this uncertainty factor (with respect to many different facets of the process) with renting from a condo owner .

hey kermitnyc! Steve123 hit on a lot of key points, as did inonada. I'm going to add a few minor points and comment on what they wrote:

Application Fees / Move In & Out Fees / Etc: These cannot be 'negotiated' in the sense that you can reduce them, but you can request that the owner pay them or at least split them with you. I just wanted to clear that up.

Should the owner decide to sell you SHOULD be able to keep you lease with the new owner. On several occasions I have sold apartments with rental tenants in place with no problems. If everything goes as planned the transfer should be transparent, the only thing that will change is where you send your check every month. Just make sure that in the lease it says something in regard to that.

An owner has no obligation to renew your lease if you have no option year, but if you do they have to honor it. Just make sure that it is YOUR option. I have seen leases drafted where either party has the option and this essentially could leave you with just a one year lease. Request that it be at your option only and it shouldn't be a problem.

In some condo buildings renters are not allowed certain privileges such as keeping a pet despite the building allowing them. Maybe you don't have a pet, but it is still worth mentioning for anyone else reading this in a similar situation. Just because the building is pet friendly doesn't mean they will be for renters. Gym/Health Clubs may also require a fee whereas a straight owner would not have to incur a charge.

Because you are typically dealing with an individual there could be numerous pros and cons. One example in the pro category is that you could work out that in lieu of having them repair an appliance, you would do it (and thus get to choose) and reduce it from the rent. A con could be that the owner is simply hard to reach when you need to contact them.

All in all, the initial round of fees and applications may be a little more expensive/harder in a condo, but once you are in it should be just like a rental. Older buildings tend to have more hoops to jump through, whereas new buildings have next to none.

Let us know if you have any questions specific to what we have said!

(Matthew Russell - Brown Harris Stevens)

In my experience - the condo board and such will be MUCH MORE in your business all the time versus what a rental bldgs mgt or super would be. I got emails from the owner all the time about all sorts of petty things that the other owners found objectionable.

Also - in-unit repairs: many condos don't fix things INSIDE the unit, so I had to hire plumbers and such myself and deduct from rent, which was a hassle versus simply emailing the super.

MRussell -
"Option year" sounds like more protection than it really is.
Landlord is insisting that since he is selling he will only offer us a sub-1year lease, despite option rider being "1 year lease at existing rent".
What am I going to do, sue him? Nope. I'm just moving out.

One of the biggest problems that I had when I rented a condo unit was getting anything fixed inside the apartment. The building super wasn't interested in taking care of routine maintenance inside the apartment as would be done in a rental apartment. If the owner is easy to reach, it may not be a problem. If not, if may become an out-of-pocket expense for you which you will need to negotiate with the owner to get reimbursed.

In addition, if the apartment was purchased more than a few years ago to function primarily as a rental unit, it may have a pretty old kitchen, bathroom, etc. since it probably won't pay for the owner to renovate except for a new coat of paint between tenants.

You can be treated as a second class citizen as compared to the owner-occupied units. You are expected to follow all the condo rules, but may not get the benefits of whatever stuff the owners are allowed - for example, having a pet.

I also didn't like the uncertainty of not knowing if the owner would decide to sell at the end of my lease or not. If the owner is difficult to reach, you may have a very short period of time to vacate the apartment as opposed to getting a renewal in the mail 60-120 days prior to the expiration of your lease in a rental building.

lobster and i agree on the repairs thing. Big issue!

We've also rented a condo from an individual owner. Can't generalize but it was a smaller condo building and repairs were not an issue. I even stole the laundry carts on occasion. In a smaller condo building, I would give the super a couple hundred bucks at the beginning of the tenancy to put you in his good graces. Tip doormen generously. Not sure what you could do in a much larger building.

lobster, jason and I also agree on the repairs thing. Big Issue!

It's also building-specific. There are a few buildings on the UWS that have a good number of happy renters. Tend to be $$$ buildings, but very low rental turnover. The millenium buildings, ansonia, 45W67. It comes down to having good building staff + the right balance of owners/renters + the types of renters. If the staff has had good experiences with generous tipping-renters who also tend to be long-term, they treat renters well. If not...

Make sure the owner agrees (ideally in the contract) to keep real estate agents out of your apartment.

I rented a studio in a condo building where I often get visitors during the day with very short notice. So annoying, it's the #1 reason why I'm moving out.

I am getting the feeling that renting directly from a condo owner is one big roll of the dice (more so than renting).....

How do you guys find these things? I try but rarely find anything.

I'm a condo landlady. Fixing things for my tenant requires sending in my contractor, so it takes a week or two, which is much slower than it would be at a good rental building. (Mind you, I'm not talking big emergencies like leaks). OTOH, it's a far nicer unit than the tenant could have gotten in a rental building, which is why she took it in the first place.

How do you find these things? My tenant was a friend of my contractor and so he brought her over. The one other person who saw it had asked our doorman to let her know if anything was coming up in the building.

ali r.
DG Neary Realty

See below today's article in the NY Times.

http://www.nytimes.com/2010/03/07/realestate/07cov.html

front_porch is correct when she says that you can get a much better apartment for the money when you rent in a condo building. Looking back, I wish that I had found a good handyman to do minor repairs in the apartment and worked out an arrangement with the condo owner that those costs would be deducted from my rent.

Helen, I use SE to find such listings. Click "must have address" on the search, and ignore listings that are from rental brokers fishing for clients. If the broker is an SVP at Corcoran with 2 active rental listings and 3 active sales listings, then it's likely a real exclusive listing. If the broker is from Citi-Habitats with 15 active rental listings that pop in and out like Kramer on an episode of Seinfeld, then it's likely a fishing expedition.

I browse things in the higher price ranges, and it was quite easy to be innundated with real choices. I can imagine that at lower price ranges, you might have to scan through more fake listings. You can also limit your search on SE to "condo", though condos are sometimes listed as "rental".

Sadbird is SO right! There needs to be explicit language that they cannot show the apt until two months before the lease expires, and then only with 24 hours notice.

As a young person, I once rented from someone who wanted to sell the apt, but couldn't. So they leased it to my wife and I. Only, they never stopped listing the place! And every other day for a year, she had people traipsing through our apt!

Kermit - yes, it is more of a hassle, but worth it if you are seeking a very high end apt; you'll never get that with a pure rental.

inonada, front porch, lobster, thank you so much for the advise! We rented from a friend's cousin in the early 90's and bought it from her a couple of years later . We moved out of NY for a few years and were lucky to have sold it before everything went haywire! Now, back in NY I am dying to move back to Manhattan.
Once again, thanks!
h

What is the most important aspect to consider when looking for a condo to rent apart from the Price. Location (I:e) close to a super market, Freeway access, tranquility etc Thank you.