Option to Renew

Depends on the area and other available apartments.

In a normal situation, a LL would like to have revenues (rent) higher than expenses (costs/mortgage/maintenance/taxes etc.).

For the T or LL consider the cost in finding a new apartment or T. Consider the inconvenience of renting it again (costs involved) versus the increase in new rent.

Are you the LL or the T?

Jan. 12 (Bloomberg) -- Manhattan apartment rents jumped 9.5 percent in the fourth quarter as landlords emboldened by increasing demand cut concessions and pushed price increases in what’s traditionally the slowest leasing season.
The median effective rent, or what tenants pay after landlord-sponsored incentives, rose to $3,121 a month from $2,849 a year earlier, according to a report today by appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate. The number of new leases increased 10 percent to 7,942 as competition made tenants quicker to sign deals.
Stricter mortgage-lending standards and weak consumer confidence are limiting home purchases and driving demand for rentals, said Jonathan Miller, president of New York-based Miller Samuel. Manhattan apartment sales fell 12 percent in the fourth quarter from a year earlier as Europe’s debt crisis and sluggish U.S. job growth dimmed buyer appetites, Miller Samuel and Prudential said on Jan. 4.
“It’s somewhat unprecedented that you have this robust rental market and yet we still have this economy that is not fully recovered,” Miller said in a telephone interview. “It’s because credit remains very tight.”
Apartments were rented within 37 days on average in the fourth quarter, the second-fastest pace in 17 years of Miller Samuel data. The three months through June was the quickest period, with properties averaging 33 days on the market.

Seasonal Slowdown

Manhattan leasing tends to slow in the colder months, when corporate hiring winds down and there are fewer new college graduates searching for housing, Miller said. Over the last 20 years, the number of fourth-quarter leases has declined an average of 18 percent from the previous three months, according to Miller. This year, the number of deals signed in the three months through Dec. 31 almost matched the third-quarter total, he said.
The surge in demand meant landlords could raise prices while eliminating incentives for would-be tenants, said Gary Malin, president of New York brokerage Citi Habitats, which also released a report on the rental market today. In 2011, 10 percent of deals brokered by Citi Habitats in 2011 included sweeteners such as a month’s free rent, down from 31 percent the year before. Landlords also could afford to be choosier in accepting tenants, according to Caroline Bass, a broker with Citi Habitats.

‘Incredibly Strict’

“People were being incredibly strict for the winter season,” she said.
Kenneth Stojak, a recent transplant from South Carolina, sought Bass’s help in overcoming two things that made landlords hesitant: he owns a 115-pound dog and he doesn’t have a job.
Stojak, 37, who left his post as chief financial officer of the Salty Dog Cafe on Hilton Head Island, was flexible. He’d considered third-floor walk-ups, was willing to pay as much as
$2,300 and didn’t insist on a particular neighborhood. He had money in the bank to pay a full year’s rent and a guarantor backing him up.
After two rejections and a search of almost two months, he found a renovated 400-square-foot (37-square-meter) studio on 95th Street between Park and Lexington avenues. He agreed to the
$2,100 rent, which included a $100-a-month surcharge for his dog, a 6-year-old French mastiff named Sonoma Wesson Porterhouse.

‘Humble Pie’

“You can’t be too proud coming into this market,” Stojak said. “You have to eat some humble pie and like what you get.” Manhattan’s apartment vacancy rate at the end of the year was 1.1 percent, down from 1.2 percent in the fourth quarter of 2010, according to Citi Habitats. Nationwide, apartment vacancies dropped to a 10-year low of 5.2 percent in the fourth quarter, allowing for rent increases that are likely to continue this year, Reis Inc. said in a Jan.
5 report.
“Because the economy was so up and down, I think certain people put off their buy-side decisions temporarily until they figure out what’s going on,” Malin said. “Maybe you feel more comfortable dating your property rather than marrying it.” Across Manhattan, rents at buildings with doormen started at an average of $2,499 a month for studios and were as high as $6,753 for three-bedroom units, Citi Habitats said. Studios in buildings without elevators rented at an average of $1,909, while one-bedrooms in those properties leased for an average of $2,577.
The downtown neighborhoods of Soho and Tribeca commanded the highest rents in the quarter, with studios leasing for an average of $2,220 and one-bedrooms for $3,575, according to Citi Habitats. Rents for two-bedroom units in those neighborhoods averaged $5,654. On the Upper West Side, average rents ranged from $1,912 for a studio to $6,100 for a three-bedroom apartment.

I am the tenant. But I haven't rented the apt yet. I am considering making an offer for a one year lease with the option to renew and I don't know how much more I should offer for the second year.

Take what you can get and be happy you found an apartment. Don't wait,.someone else will take it.

When does your lease end?

3% and you're lucky. Seriously, wtf it's 1% difference.

My suggestion is that you ask for a 2-year (or longer) lease with an exclusive option for you to terminate any time after the first year with notice. Easier not to have to redo a lease every year.

Don't offer an increase for the 2nd year, just state $X for 2 years. Don't worry, they'll come back with something, no need to negotiate against yourself. Sometimes they'll want a higher rent for both years, sometimes they'll want a 7% bump on the second year, etc. It'll just depend. But the point is to force them to have counter yet another one of your terms. I.e., if I ask for X, Y, and Z, then the other side will think they are being somewhat of an ass by disagreeing on all of X, Y, and Z.

At the end of the day, if you end up at 3% or so per year that's fine. I'd personally never agree to 10% (say) as that sets a bad & unrealistic precedent -- doubling every 7 years -- for what increases should be going forward beyond the term of the lease.

Nada's advice will get you on the owner's "shitlist". He's still operating under the premise that we are in a tenants market. Don't listen to him.

I helped a friend recently find & negotiate a place. As it stood on the surface, it was about the best deal he could find. He put in the offer for no-fee, 10% below ask, exclusive right to terminate after year 1. He got the termination option, half the fee, 10% off for the first year but full amount for the second year. Because he's only wants a place in the city for 1 or 2 years, it works out very nicely for him. This was negotiated in the past month.

Hones, you work in the "industry" and have a far worse rental deal than me, who are you to give advice to this guy? When you get to a point where your rent is $2500 month per million dollars in sales price, then you can talk. Until then, save your schtick for some LL that you're trying to win over.

Sure. Hey, did I tell you about the studio is rented for 100,000 per month to some guy?

I believe your bullshit about as much as you probably believed the above.

I'm off to the office.

Have a miserable day nadabitch.

Going to the office at 6:45AM? Nice, I'm glad I motivated you to go find yourself a better deal.

inonada does a lot of negotiating leases for friends.

One within the past month:
inonada
about 3 hours ago
ignore this person
report abuse I helped a friend recently find & negotiate a place. As it stood on the surface, it was about the best deal he could find. He put in the offer for no-fee, 10% below ask, exclusive right to terminate after year 1. He got the termination option, half the fee, 10% off for the first year but full amount for the second year. Because he's only wants a place in the city for 1 or 2 years, it works out very nicely for him. This was negotiated in the past month.

one a little over 10 weeks ago:
inonada
about 10 weeks ago
ignore this person
report abuse I recently helped a friend get a place in Hell's Kitchen. Boutique walkup, great light, nicely renovated w/ Viking stove & whatnot. Originally listed at $4 ppsf, was cut to $3.5 ppsf, he got it for a shade under $3 ppsf. That does not include a very nice little terrace. The place is not high-end.
http://streeteasy.com/nyc/talk/discussion/30045-what-is-a-fair-rent-increase

That's a rather impressive track record? Any others? Maybe one in February, a couple in January, a bunch last Fall?

My lease ends at the end of August at my current apt. I'm thinking of making an offer for a new apt with a 2% increase in the second year and another 2% increase in the third year. Alternatively, I could offer a 2 year lease with option to renew in the third year. But judging from some of the responses, perhaps 2% is too stingy?

Where do you live?
What kind of apartment?
Who is the owner?

Is this a big LL or just a dude with a few apartments?

Do they even want to have someone in the apartment for the next year? 2 years? 3 years?

This is an investor - I'm guessing with only one or a few apartments. They are definitely interested in having someone in the apartment for a long time.

Today is May 8th, the lease expires at the end of August. The only problem I have with telling the LL TODAY that you want to extend is it may seem desperate.

This is not so much when the LL only owns a few apartments, there main concern is keeping them occupied without any lapse in tenancy. A person with only a few units, can't afford as much as a big LL, to take the apartment off the market to clean it up (paint) and re-rent it.

I suppose it doesn't hurt you to initiate a call this early. I am curious what the LL would offer first if you inform him your curious what it would cost to rent the apartment for the next three years (option in year 3).

Have you and the LL directly spoken in the past about other issues (Repairs or Rent etc.)? Do you have a good relationship?

Consigliere, I am talking about moving into a new apartment, not extending the lease I already have. I have not spoken to the new LL. I speak to the one I have now, but what I am interested in is putting an offer in for the new apt, via the broker.

I am sorry about that.

Why don't you ask the LL directly what are their thoughts on a multiple year lease?

inonada
about 7 hours ago
stop ignoring this person
report abuse

Going to the office at 6:45AM? Nice, I'm glad I motivated you to go find yourself a better deal.

money doesn't earn itself. besides, i like to get home early enough to hang out with my kid. which you wouldn't understand, being childless.

bem9 have you considered instituting inododo's shitlist?