Co-op Rental Market

Watch out for the 2-year rental limit if you plan to stay long-term.

Im concerned with the owners intent. Stanard sublease allows for owner to enter apt. for various reasons including but not limited showing the apartment for sale.

What else am i missing

"Stanard sublease allows for owner to enter apt. for various reasons including but not limited showing the apartment for sale."

That is a standard clause whether it's for a co-op, condo, or rental building. You won't get around it.

Agreed, although less concerned in a rental building. Alot of the coops have come onto the rental market bc they are not selling. There is alot more hair on a coop rental. Accordingly given the difficulty of the board package/approval process and the rental limitations what would be a reasonable discount be to a straight rental?

You are correct to consider the additional "red tape" involved with a Co-op rental. While a Co-op rental application may not have the same level of scrutiny and detail as a purchase application, you'll still be baring your financial and personal soul. And don't forget about the time frame for being approved (weeks to one month +), and the likelihood of paying several types of additional fees (application, move-in, etc.), certainly beyond what you'd expect to pay in a straight rental building.

Since you're dealing (usually) with an individual, you may have more room for negotiation than you would with a landlord / management company in a rental building. And often, apartments in Co-op buildings MAY be nicer than their straight rental counterparts. Also, if the apartment owner has retained a broker to rent the apartment, as most do, there will be a broker fee involved.

Bottom line - if you want to pursue this option, and your timeframe permits, offer what you consider a "fair" price for the apartment. If you get it, fine; if not, there are others. Keep in mind that with Co-op's, especially with sales, but also with rentals, it's not all about the price. The owner (and broker, if there is one) want the quickest offer with the best combination of price and renter qualifications, to maximize the likelihood of Board approval.

Beware of coop rentals obtained through an agent. The transaction costs are staggering for a one or two year max rental. Usually 15% of the annual rent as a fee (more or less--I forget the exact industry standard) plus the fee for an application to the coop board which can be hundreds of dollars. Cheaper to walk up to doormen in nice rental buildings and ask them if any apartments are available if they have the managing agent's phone number.

The clients I have put in co-op rentals have generally gone there because the kinds of apartments they were looking for weren't available any other way -- e.g., they wanted to be on a certain block in the West Village where there weren't condo buildings and the rental product available was not the best.

But the hassle factor is high -- Kylewest is right, if there are rental buildings that fit your criteria, go for them.

If all you can find/want is a co-op, be aware that move-in/move-out policies may be more stringent than for other apartments. You will probably have to schedule your move with the super, and you might have to do it during the week. There can be a move-in deposit of $1,000 or so (which you get back once you've shown you haven't damaged the lobby) and possibly non-refundable move-in/move-out fees of a few hundred bucks.

ali r.
{downtown broker}