Buying vs. Long Term renting

You don't need any help; you answered it yourself: "Lots of things about the idea of buying are still unsettling (massive downpayment, high/increasing maintenance and RE taxes, prices that still feel sort of nuts, etc.)"

Over thanksgiving, when you have a spat with your sibling, do you suckle on your 80yo mother's shriveled breast for comfort?

Or do your wait until your 5 other siblings have their turn?

The only comment i have with regard to a long term 5-7 year lease is that you need to make sure that you are covered every which way. While this sounds nice, in a year or two, what happens if the owner decides to sell. You need to make the lease so airtight that this will never be a concern. So there has to be either a buyout provision so you are made whole, especially if you are going to pay to renovate, or a provision stating that the owner does not have the right to sell.

I am not a lawyer, but I believe that if there is a sale of the apartment, that the new owner is under no obligation to keep the lease in place, as you are neither stabalized, nor controlled. If this is the case you really have zero protection and may be doing the owner a favor by renovating the place.

Mikev--I'm also not a lawyer, but my understanding is that you have things backwards: unless the lease specifies otherwise, it survives a sale and the new owner is obliged to honor it.

jordyn: Not in all cases. It depends on how the lease is drawn up.

No, the lease is valid for the next owner, who does not, however, have to renew it. If it is a market rental, sale is a moot point unless they convert. If it's rent-controlled, the lease always survives. If it's a foreclosure the rules are different; I think the owner has 90 days or through the end of the lease, whichever is greater, but I could be wrong.

"jordyn: Not in all cases. It depends on how the lease is drawn up."

That doesn't really make sense. We're arguing about the default, not what happens if the lease specifies one way or the other.

Jordyn you are correct that I may have it backwards. Depending on how it was written it most likely would survive. But it does not change my opinion that it is all in the wording. So unless the owner really knew that they were going to not want to sell under any circumstances for the next 5-7 years, I would believe they would leave themselves an out, just in case. Otherwise if the market increased and they were locked into a tenant with lower rent and wanted to sell in a few years it would negatively effect the sales price.

So if it was me as the landlord i would write a 5-7 year lease with each year after lets say year 2 as a guaranteed option that the tenant could exercise, with the only out being if i wanted to sell the apartment.

I definitely agree that you should make sure you're very familiar with (and happy with the terms) of a lease if it's 5-7 years in length. This should go for both the landlord and the tenant, of course. I'd presume that these sorts of arrangements would generally be rather more involved/customized that typical boilerplate leases.

newbuyer, what you are looking for is difficult to find, there is a lack of reasonably priced, quality inventory (to rent or buy) with your space requirements. Thinking creatively to find something right for your family is a wise move. I would explore the option further.

newbuyer--I'm in a similar boat. My husband and I have decided to buy after renting for several years. We both want to be able to renovate a place we own, not spend money on doing upgrades that don't ultimately belong to us.

Personally I'd be wary of signing such a lengthy lease. Seven years is a long time. What if you do decide to leave sooner? You will obligated by contract to pay out the entirety of the term.

"Personally I'd be wary of signing such a lengthy lease. Seven years is a long time. What if you do decide to leave sooner? You will obligated by contract to pay out the entirety of the term."

Or include a provision in the lease to allow subletting, in which case you'd be no worse off (probably better off, in fact) than if you bought and wanted to move, presumably.

I'm currently in a longer-term lease, newbuyer99. It's a 3-year lease with a one-sided option for me to terminate early. I didn't ask for a longer-term setup because I don't want one (I'm a fan of changing every 3 years or so because I like it), but I would have guessed the owner would have been open to the idea as they (for whatever reasons of their own) don't have plans to sell. You should have no trouble finding family-sized apartments that are open to longer-term leases, though 5-7 years is longer than I have ever tried and may give you trouble.

As far as availability of apartments of that size, I think it is pretty easy. I've generally found that the larger / more expensive the apartment, the cheaper it becomes to rent relative to buying. At some price points and sub-markets, it even becomes just plain silly.

On renovations, I've never done anything major and have just found places whose majors (e.g., kitchen / bathrooms / layout) are good enough. On minor things, I just have gotten it done. For example, I've done a build-out of a closet, or I've redone the floors with costs shared between me and the owner. If it amounts to 1% of annual lease, who the hell cares? It's not like I'm going to go with apartment X instead of apartment Y that is 15% more expensive for the same thing (which is very typical), simply for the sake of floors that amount to 0.3% of the 3-year lease to resolve. Take care of the big stuff first (i.e., find the best value), and deal with the little stuff as appropriate.

"Or include a provision in the lease to allow subletting, in which case you'd be no worse off (probably better off, in fact) than if you bought and wanted to move, presumably."

Legally, you always have a right of sublet regardless of what the lease says, I believe. The owner has to approve a sublet, but approval may not be unreasonably withheld. The bigger point here, however, is that the owner doesn't really care for you to move out after year 3 of the lease and then sublet his place for another 4 years either. Hence, it's best to just make sure everyone is on the same page on conditions for early termination.

newbuyer - the nytimes did an article on renovating rentals which may or may not be helpful...

http://www.nytimes.com/2007/04/15/realestate/15cov.html?pagewanted=all

"Legally, you always have a right of sublet regardless of what the lease says, I believe. The owner has to approve a sublet, but approval may not be unreasonably withheld."

That's not true for market rate rentals (in NY), to the best of my knowledge. A lease can specify no right to sublet. You're right that with rent stabilized apartments, consent to sublet cannot be unreasonably withheld.

This is from http://www.housingnyc.com/html/guide/basics.html#Sublet, jordyn:

Under New York State law, a landlord cannot unreasonably refuse a request to sublet your apartment (if you have a lease and reside in a building with four or more units). This protection applies to both rent regulated and unregulated apartments.
...

This is from http://www.housingnyc.com/html/resources/attygenguide.html#7:

Tenants with leases who live in buildings with four or more apartments have the right to sublet with the landlord’s advance consent. Any lease provision restricting a tenant’s right to sublease is void as a matter of public policy
...

This is from the horse's mouth, the actual law (Real Property Law 226-b,
http://public.leginfo.state.ny.us/LAWSSEAF.cgi?QUERYTYPE=LAWS+&QUERYDATA=$$RPP226-B$$@TXRPP0226-B+&LIST=LAW+&BROWSER=EXPLORER+&TOKEN=02480676+&TARGET=VIEW):

...
2. (a) A tenant renting a residence pursuant to an existing lease in a
dwelling having four or more residential units shall have the right to
sublease his premises subject to the written consent of the landlord in
advance of the subletting. Such consent shall not be unreasonably
withheld.
...
6. Any provision of a lease or rental agreement purporting to waive a
provision of this section is null and void.
...

Thanks for the clarification. That's good to know.

I am not a lawyer, so consult your own and all that, but it looks like if your building has more than 4 units (and it doesn't seem to be required that they all be owned by your landlord), then you have the right to sublet regardless of what may be written in your lease.

No problem. FWIW, I think many things are written into leases that the law declares void...

buster2056 : "newbuyer - the nytimes did an article on renovating rentals which may or may not be helpful... http://www.nytimes.com/2007/04/15/realestate/15cov.html?pagewanted=all"

Nice job remembering that 2007 article. I just clicked through, got reminded that one of the duo that sunk $100K into their rental was a hedge fund guy, got curious about which hedge fund. Apparently (and I may be wrong as there may be two NY-based hedge funds with people sharing that name), things didn't turn out too well for the fund:

http://www.davemanuel.com/2008/03/05/focus-capital-is-the-latest-hedge-fund-casualty/
http://globaleconomicanalysis.blogspot.com/2008/03/hedge-funds-unravel.html

It seems that in early 2008, they lost 80% of their billion-dollar fund.

Thanks for comments. Not worried about being locked in long-term in a rental we love, more than happy to pay that price for something we can think of as "ours" and treat accordingly (akin to buying).

Inonada, where would you recommend I look for rentals of that size? I've looked on streeteasy, and the pickings are pretty slim. NY Bits was useless. Have not tried NYT yet, maybe that's another option?

Thanks.

SE is my favorite. I'm guessing you are looking for a condo and not a big rental building, in which case SE has it covered. There might be open listings on NYT that are for smaller landlord buildings that might be open to your longer-term plans, but I'm not sure.

How narrow is your search criteria? Are you trying to hit a specific school district or something like that? Because if you are, I'm probably of little value to you. Also, are you of the $6000 vs. $9000 vs. $12000 variety? Because I think the market is going through a compression of sorts: fewer people are interested in the higher-end, which reduces demand/pricing there, but increases demand/pricing farther down as the demand migrates lower.

Right-o, saw the other thread & remembered you had school issues, and terrace needs if I'm recalling correctly...

inonada - thanks.

terrace, or at least a balcony would be great, but is not a must.

No specific school zones - any of the decent/good ones would do, although of course some are better than others.

Big rental buildings would be ok by us, I just have not seen many listings for apartments that large.

$6K would be great, but completely unrealistic for 2000SF, unless I am completely missing stuff. $9K would be totally fine for the right apartment. At $12K, the rent vs. buy equation is not nearly as compelling towards renting, so probably doesn't make a lot of sense.