Renting in a coop

No, that's about it. I once rented my co-op apartment when I was unable to sell it. Although, some co-ops might not give tenants access to all of the ammenities, like parking, gym, etc. Some prefer to reserve those for owners.

Try it only if you know you'll pass the board. It may take up to a month for approval. Most coops don't hold you on the 2-year rule unless the tennant is problematic. Rental pricing should be lower than market rate on non-luxury buildings. Sky is the limit on ultra-lux. ymmv

Thanks for comments, helpful. Timing of board approval may be an issue. We'll have to ask about amenities too.

I disagree about "most boards don't enforce 2 year limit." Not my experience at all. In many, particularly higher-end buildings the rule is rigorously enforced.

Beware also of fees associated with the rental. A $1500 "application" fee is not unheard of.

Is there anything one can do to speed up a coop board approval process? We are three weeks away from the start date on our rental lease and I don't think they have even checked our credit yet. I know that legally the board can take their time. Is there any good way to request that they review us before the lease starts without turning them against us before we even meet?

you or the owner, can get in touch with the management company to find out when the next board meeting is. if it just passed, you'll have to wait a month. if it's coming up in less than a week, you'll have to beg, pray, hope. most boards do not make special meetings to meet potential rentals/purchasers. it typically does not take them long to review the whole package once the management company submits it to them.

I rent in a co-op. We signed a year lease in November of 2007. At the time, the Board was adamant that it was only for 2 years and there were no exceptions. November 2009 the Board approved the extension of our lease on a month to month basis with 2 months advance notice. The current state of housing has changed the rules. It was better for the board to not have an apt print in the current environment. Boards (and most people in general) will bend rules when it is in their interest.
Only ay to speed up the process is to get your package in to the Board as soon as possible and have them review at their meetings.

ebs208, does the owner/landlord know? A credit check takes only minutes, I wouldn't worry too much about that.

But ask the owner, who after all is really, really glad to have your business, to check in on your application and see if you can get an interview date on the calendar soon (assuming an interview is likely in your building.)

I think everything is going to be fine.

Sorry..we signed a 2 year lease in November of 2007

Thanks for the advice, all. We are dealing with the owner through a broker. I suppose if we don't hear anything by next week, I will ask the broker to find out when the next board meeting is. I just don't want to appear too pushy because I realize that renters are not a priority for coops. At the same time, this is huge in our lives. We can't really book movers, request days off work, or do anything until we know when we're moving (and where).

"Is there anything one can do to speed up a coop board approval process?"

Yes.

Fill out your application properly and completely, and don't make us ask questions about vague or incomplete answers or missing documentation. The back-and-forth among the board, the managing agent, the applicant's agent, the shareholder, and YOU is what makes the board approval process take longer.

NYC Matt- I think we filled out everything correctly. Our broker told us it was a solid application, so I don't think we are causing the delay in this instance. We are gainfully employed with pay stubs and work letters to prove it, we make well over 40 times the monthly rent, we have perfect credit and more than enough savings to pay the rent for the entire term of the lease. I would think in a rental situation that's all a coop would need to know about our finances. And that plus recommendation letters was all they requested.

I believe that anyone renting in a co-op should demand certain discounts associated with the difficulties and extra costs, in particular:

as kylewest points out, application fees. $1500 is a lot and should be accounted for
limitations on term or re-applications every 1 or 2 years, or a total limit on the period
the timing for the applications and even the potential that you don't get approved and have to scramble
just the general information required is more intrusive, a hassle factor is real

"NYC Matt- I think we filled out everything correctly. Our broker told us it was a solid application, so I don't think we are causing the delay in this instance."

With all due respect to your broker, brokers say this all the time.

You won't believe how many poorly-assembled packages we receive from applicants who were "helped" by their brokers in putting them together.

Also, if you do have the desire and option to stay for more than 1 year, avoid the nonsense about the 2nd year automatic increase (at something "modest" like 5% or tied to the rent stabilization guidelines). New rents aren't going up next year so don't get stuck with an escalator in your lease.

Upfront it pays to be very clear, e.g. you are looking for a 1 year lease plus a 1 year option, at a monthly rent of $X. NOT, you are looking for a 1 year lease for $X plus a one year option.

How much of a discount should you require in order to consider a coop rental?

Personally, I'd want 20% to 25% discount in order to put up with the application process and the two-year rule. I'd certainly want the owner to pay the application fee.

"How much of a discount should you require in order to consider a coop rental?

Personally, I'd want 20% to 25% discount in order to put up with the application process and the two-year rule. I'd certainly want the owner to pay the application fee."

***

You can "require" whatever you want.

Maybe the owner will meet your "requirements", but more than likely he'll just say "NEXT!"

NYCMatt, NEXT is nice, but this isn't the butcher at the grocery store with a long line of people waiting. Especially when you have all of the requirements of a co-op in contrast to a rental building.

Additionally, as far as the owner is concerned, a month unoccupied is like an unsold airline seat. It is an asset that can never be recovered.... while waiting for the NEXT applicant.

Well put, splaken.

I would expect that most renters - with lots of alternative choices - would simply say, "NEXT," themselves unless there was a 20% to 25% discount incentive.

My landlord recently had one of his four units vacant for two and a half months. Not fun for him.

"Additionally, as far as the owner is concerned, a month unoccupied is like an unsold airline seat. It is an asset that can never be recovered.... while waiting for the NEXT applicant."

This is why it's best to have AT LEAST six months' worth of mortgage and maintenance in the bank -- so you CAN say "NEXT!" to the bargain-hunters.

Cool. Piss away that nice bank account. You'll show-em!

Bottom line: why pay full price for a coop rental (with all the problems and hassles) when you can get a similar traditional rental? Hardly a "bargain" without a very big discount. A fair price at a 20% to 25% discount. In fact, it would be "over-paying" if you didn't get a meaningful discount.

Regardless, let the market decide.

NYCMatt, you are really arguing with me?

How about some math.

If it takes 3 extra months to find a qualified renter willing to pay full price vs. a renter who will take it at 75%, you break even. If it takes 4 months, you are behind. If it takes 2 months, you are ahead. If it takes 2 months and you throw in the towel and take someone who will pay 90% (or you lower the rent 10% realizing that you aren't getting takers at 100%), 90%*10 = 9 months of the full rent, equivalent to 75% * 12 months.

Airlines are the smartest companies out there in yield (revenue) management. I didn't use that example lightly about the unsold seat.

"If it takes 3 extra months to find a qualified renter willing to pay full price vs. a renter who will take it at 75%, you break even. If it takes 4 months, you are behind. If it takes 2 months, you are ahead. If it takes 2 months and you throw in the towel and take someone who will pay 90% (or you lower the rent 10% realizing that you aren't getting takers at 100%), 90%*10 = 9 months of the full rent, equivalent to 75% * 12 months."

That's all well and good if there were a dearth of renters. Three people I know personally who had to move out of state to find work actually had *lists* of applicants for their co-op apartments. No waiting. No lost months. NEXT!

***

Airlines are the smartest companies out there in yield (revenue) management. I didn't use that example lightly about the unsold seat."

There's nothing smart about losing money so consistently that you're in and out of bankruptcy every 7 years or so.

NYCMatt, so you are saying that you had 3 friends who were not employable in NYC, but their redemption was that they had 6 months of mortgage and maintenance and a great enough apartment to attract lists of qualified adult applicants? Very amazingly convenient.

And airlines are not a bad business model because they don't manage their yields well. Their business model is flawed because of high fixed costs, high labor costs, and industry overcapacity. I didn't defend airlines business models, but I did defend their revenue maximization and you didn't offer anything to the contrary.

You want to continue arguing? I'm not sure why.

"airlines are not a bad business model because they don't manage their yields well. Their business model is flawed because of high fixed costs, high labor costs, and industry overcapacity."

No.

Their business model is flawed because in a perverse reverse cartel system, none of them are CHARGING enough for tickets.

Ok Matt, whatever you say.

Update: Everything went fine with our coop board, and we got the apartment. The delay was a result of a back-and-forth between the broker, managing agent, owner etc. It was not in any way due to our application being incomplete, as NYC Matt suggested. Everything was in order, and the board couldn't have been nicer.

hmm is NYCMatt also wrong about airlines?

No.