No more rent increases?

With landlords offering up to 2 month concessions vacancies are becoming expensive: at a minimum you have to paint the apartment and probably more, it's probably going to be vacant at least a month, the rent concessions..... a vacancy could easily cost you 4 months rent. Even if you got a 5% increase, that would amount to .6 months rent over the year vs the potential loss of 4 months+ it's not worth the risk.

I wish I could find the article I read recently and post it - said that more people are staying put in their rental apartments. Maybe everyone believes that the rental market is at equilibrium.
Of course I called the top of the sales market around Q2 2015

Yes there has been a flood of new rental inventory, lots of competition which is flattening prices. I would even try to negotiate your rent down a bit or try to get something free thrown in for renewal.

FC-
This one?
https://www.dnainfo.com/new-york/20170309/financial-district/apartment-rent-prices-nyc-elliman-report

That is it Mr. 30. Thanks.

I saw one building, new, try to offer up a $6+K apartment as a $5K apartment through the 2 month free trick. And then year 2 you have a 20% built in increase plus whatever they want to raise it too.
So sneaky

hoodia, What happened to the fancy rentals at four seasons downtown?

If you live in Harlem or the Bronx expect rents to go higher this summer. Very little inventory available.

The month free trick is a major scam. I wonder how the stats account for the rental rates of those buildings.

http://streeteasy.com/talk/discussion/42393-rental-statistics-do-not-acurately-reflect-market

Renters are in a position to extract concessions right now. Ask for an additional free month up front for a 2 yr lease, or ask to put in your lease now that you get a free month upon renewal for a 3rd year. If they won't do that, ask for $2k giftcard, etc. waived amenity fees, whatever to help offset the large effective increase if you plan to stay (or to pay for movers to move when the rent goes up). Lot of competition!

300mercer, they had a lot of nice qualities but overall just not worth the prices for many reasons. I think owners are stuck with the worst homes at high prices which won't command long term rents that would otherwise be appropriate for what they paid to buy.

Hoodie, Makes sense. What you are saying is that buyers paid too high of a price and rental premium is just not much for top end properties vs related type nice newish properties.

Here is a current example of " buyers paid too high of a price and rental premium is just not much for top end properties ";
buyers paid too high of a price and rental premium is just not much for top end properties

On the market asking $23,000/month. Let's assume arguendo they actually get that. Owner just closed about 3 months ago:
http://streeteasy.com/sale/1227889
Common charges:$2,571 ($30,852 annual)
Monthly Taxes: $3,204 ($38,448 annual)

Assuming the owner pays a 1 month Broker's Fee and loses 1 month to vacancy (both of those may be on the low side) They will collect $230,000 in rent for the year. Net of CC/RET that leaves $160,700 or 13,391.67/month.

But the purchase price was $5,750,000. How do you justify that off of the cash flow? I'm pretty sure they cam up with the rental priced based on how much the owner's $2,800,000 mortgage is costing, but even at those numbers it's a break-even with zero return on the $3,000,000 cash invested.

Here's one for $5.5M: https://www.wsj.com/articles/ivanka-trump-and-jared-kushners-rent-in-washington-15-000-a-month-1491234218

What is considered a good, realistic cap rate in Manhattan in 2017?

On what? Non luxury studios and small 1 bed rooms are much higher than high end condos. The latter can be as low as 1 percent. Former 4 percent or lower.

If I paid cash today for my investment condo in Midtown West, which is a studio, I'd be getting a 2.4% cap rate.

Ali,
Is that cap rate assuming 100% occupancy and no other costs besides CC/RET?

>Is that cap rate assuming 100% occupancy and no other costs besides CC/RET?
She is a broker and should be able to reduce vacancy time between tenants, price properly for the tenant to reduce turnover, and doesn't have to pay a broker fee.
But costs should include insurance and some Christmas tips, and any fees to the board.

I know Ali is a broker - she used to sit at the desk next to mine. But even brokers have to pay other brokers to bring tenants, have to repaint/repair apartments when tenants turn over, and suffer from vacant periods between tenants.

It's a fair point, 30 (FWIW, not only did we have adjoining desks, I learned way more from listening to him than from all the formal real estate ed I took). The answers are yes, and yes... I am assuming 100% occupancy and no other costs, whereas I really need to put the costs of painting and repairs in the equation too.

Vacancies, not so much, because I'm one of those landlords that keeps my rent low enough that someone always wants the apartment -- the vacancy between the last tenant and the current tenant was about ten days.

Plug in numbers for painting and insurance and tips and repairs, and we're down to about 2%. I certainly wouldn't buy it for an investment if I were spending today's dollars.

Also at SOME point, you will have to put in a new kitchen and bath. This didn't used to be as big an issue as it is these days because tenants expected old/crappy kitchens and baths in rental units. But these days, tenants kind of expect new(ish), high end(ish) kitchens and baths and the same stuff that used to be perfectly acceptable to the rental market can leave your place vacant now.

That is true. Tenants don't want no 20 year old stove and ice box and 20 year old toilet.