Renting Out Entire Brownstone?
I need advice or experience from owners on the ease of renting an entire brownstone. I am hoping to buy a brownstone in the Brooklyn Heights, Cobble Hill, Boerum Hill area to eventually live in. However, I currently have a very affordable, rent stabilized apartment that we have not outgrown, and I do not want…
I need advice or experience from owners on the ease of renting an entire brownstone. I am hoping to buy a brownstone in the Brooklyn Heights, Cobble Hill, Boerum Hill area to eventually live in. However, I currently have a very affordable, rent stabilized apartment that we have not outgrown, and I do not want to give up. My hope is to purchase a brownstone and rent it for 2-5 years before moving in myself. Clearly there are a lot of garden floor units for rent, but how successful can one be at renting an entire brownstone in these areas, or at least an upper triplex?
The author of the CasaCara blog, who sometimes posts here, has done what you are proposing. Most recently, she has lived in a Boerum Hill rental and rented out several of her properties. Here’s her blog:
http://casacara.wordpress.com/
Good point, but actually it’s within NY City I believe — I think you can still have a country place upstate. In either case, this person can’t buy property in NYC under his/her own name (assuming that’s the one on the lease).
But it’s the disingenuousness of the comment, “I’m just playing with the hand I’m dealt,” that really sticks in my craw. No-one is forcing this person to remain in a rent stabilized apartment, and if he/she can afford to consider buying a brownstone in “prime” Brooklyn neighborhoods, he/she can certainly afford to move to a more expensive place.
A more honest way to put it would be, “I’m just taking advantage of a flawed system and hoping to get away with it.”
Way to go — give a bad name to all the honest, not rich people who really do need the protections afforded by rent stabilization.
Isn’t it against the rent-stabilized agreement to own or rent another residential space in New York state while you’re currently in a rent-stabilized apartment?
Great advice from all and much appreciated.
Many points I have considered, and some I had not (in truth, I forgot about the bank requiring the property be owner occupied for a mortgage).
I am bearish on the market and am willing to hang tight for a few more years. I was simply hoping to take advantage of the tax breaks during that time.
Not smart, heart attack. Wait in your rental for 2-5 years or until the market bottoms (NY Case-Shiller YOY passes back up through zero). You will have mucho choices. Buying at or near prevailing prices will redden your cashflow very quickly.
***Bid half off peak comps***
talking from experience and depending on your lifestyle, renting your brownstone is a huge undertaking. we currently own a 3 family brownstone in clinton hill fort greene area made up of 2 duplex apartments and 1 one bedroom apartment. We used to live in the building but decided to move elsewhere due to a job relocation. We decided to rent as we thought we would return to Brooklyn but that may not happen. I think you may be able to get more of a rentroll with more aparments than only a garden and triplex. BUT that means more responsibilities to more tenants. It is a toss up. And maintenance and upkeep is always a common concern and is viewed differently with each tenant. I agree with a lot of the points NorthHeights is offering. Although for investment purposes I think the neighborhoods further east may be more enticing with respect to risk vs reward.
Yes, there’s a market in these neighborhoods to rent an entire house. Mainly families temporarily relocating from overseas – think diplomats, i-bankers, etc.
But as mentioned above – why? Unless you genuinely think prices have bottomed out, or have already found a specific property that is super-unique, I don’t see why you’d undertake the expense and hassle. All of the situations I know where people rented whole houses are because they needed to relocate (same case as their tenants) and didn’t want to sell their house (due to personal attachment, market conditions, or both).
Further thoughts on the expense:
#1: People who rent are looking for a well-maintained, move-in condition property. People who can afford to rent an entire house in the neighborhoods you list are going to have even higher expectations. So if you’re looking to buy now, you’re going to need to pony up big bucks for either a renovated house or pay for the renovation yourself.
#2: I tend to agree that the ownership costs will exceed your rental income…housing prices are still pretty elevated in those neighborhoods. You don’t see investors swooping in because the houses still don’t make sense as investment properties.
#3: As mentioned above, if you want to get a mortgage, you will either need to fib on the “owner-occupied” part, or get an investment mortgage.
Agree – but the tax bennies could tilt the equation into the profitable column, if either the
house is in decent shape or you’re handy with any repairs.
Plus any depreciation is I think waived once it becomes owner-occupied (I’m not an accountant!)
Conversely, not sure how it’d work mortgage-wise. I had to certify that I was gonna occupy property right away else the rules would’ve changed. Now, I’m not entirely sure the bank showed up to check but one never knows, especially if we’re talking longer period of time and mailing address being different than property address.
more4less, thanks for your advice.
starfish, I actually agree with your opinion, though remember, I didn’t make the rules here, I am just playing with the hand I am dealt.