Rent-to-Own Brownstone?
We currently rent 2 floors of a brownstone that’s approximately 18 ft. x 54 ft. The house is 3 floors, and there’s a second tenant upstairs. Our landlord asked us recently whether we might be interested in buying the house from him. He did not suggest a price. The house, while very pretty and having…
We currently rent 2 floors of a brownstone that’s approximately 18 ft. x 54 ft. The house is 3 floors, and there’s a second tenant upstairs. Our landlord asked us recently whether we might be interested in buying the house from him. He did not suggest a price. The house, while very pretty and having some lovely original crown moldings, fireplace, etc…, would need a lot of work (new plumbing, new electric, new windows, there are lots of small holes all around the house). I’m thinking it’s a total gut job. The house is in a lovely area of Bococa, but it’s not a prime area and it’s not landmarked. Assuming we decide to do this, what’s the best way to go about coming up with an asking price? While we’re familiar with real estate in the area, it seems that prices vary greatly on brownstones. Also, if anyone else has some general guidance on how a rent-to-own situation can work, I’d love the advice. Thanks.
Please educate yourself about construction. “Small holes” should be patched with plaster, drywall or caulk. You don’t tear down a wall to fill a small hole.
Original windows properly maintained with storms are more energy efficient than new ones. There are many books and government studies dealing with this topic.
An electrical upgrade over three floors and a cellar 20×45 cost us $15,000. No gut job was required. A plasterer patches the small holes.
As for the plumbing, if it ain’t broke don’t fix it. Matters such as not enough hot water, uneven temperatures, dripping faucets, etc., are easily fixed small matters and do not require replacing pipes. If a pipe is leaking, it should be patched or replaced.
If you want to redo a bath or kitchen, you might replace some of the plumbing in that room as necessary, but you don’t have to redo every pipe in the house. It is also relatively easy to upgrade kitchens and baths.
Thank you for all the great advice. We’re going to do our research, and see where we are. We’ve already talked about wanting to make improvements if we were to own. Some of the windows are original and in very bad shape (and not very energy efficient), and the small holes all over the place lend to bugs in the summertime. The good thing is that the owner is not in a rush, so we have some time.
Other than the title, this doesn’t sound like rent to own to me either. Owner is offering to sell to the op.
I also agree – how is it that it needs a total gut, but it’s fine as a rental?
Forget 10x rent roll in nyc – unless we get a total repeat of the 1970’s, in which case all bets are off. The rent roll multiple has some variables – if op feels the house needs a gut job, presumably the current rent is below market due to the shabby conditions? Also, when one unit is owner occupied, the rent roll multiple doesn’t work because it’s not an apples to apples comp.
Given the relatively soft market, isn’t it possible to buy a house that doesn’t require a total gut? Is this the house you really want to buy? And if so, can you be dispassionate and drive the best deal possible? Certainly you shouldn’t pay more for this house than one nearby simply because you live there now.
two qualms:
Doesn’t sound like “rent to own” to me. You rent. Owner asks if you want to buy. No mention of your rent going towards that purchase price.
“total gut job”? You already live in the place. Why do you have to gut it now that you own the house? Does ownership imply that your standard of living must improve also?
Look on Property Shark for comps.
Rent-to-own is a classic bear market indicator. You never have, never did during the run-up, and never will see these “opportunities” in bull markets. It’s a sign of desperation.
***Bid half off peak comps***
What real estate genius came up with that one? I only know of its existence from some sign somewhere on Court, in Cobble Hill.
Really.
“For a brownstone in bococa, you’re unlikely to find something selling for 10x rent roll”
Maybe not today. But over time, history strongly disagrees. And it also repeats. Either rents (reliant on employment) spike or prices (reliant on both employment and an unstable banking system) collapse further. Good things come to those who wait.
***Bid half off peak comps***
also, if you post information about the property here, brownstoner readers will give you a valuation about $500,000 below market value…. you can adjust accordingly.
seriously, whoever said you should look at every listing is right. We looked at houses for two years and I got a really good sense of prices from that experience.
realtors can be unreliable because they price things too high to try and get exclusives, but if you talk to a few of them, it couldn’t hurt.