Taxes after a renovation

I own an SRO that I want to convert into either a two family or a three family house. Will my taxes double, triple etc.? We live in the house and we are wondering if we would be better off just doing repairs, upgrading the electric, putting in new windows etc. and leaving it as an SRO. Also who could I ask about possible tax increases? It’s so hard to get answers! Any advice would be appreciated. Thanks.

ferney1c

in Taxes 11 years and 2 months ago

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adam_dahill | 11 years and 2 months ago

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@ferney1c- My opinion is that if you are currently doing work on the house such as electrical upgrades, repairs, windows etc.. you might as well take the next step and get rid of the SRO status. You are already in renovation mode and have people that are working with you. You are invested in the process and should keep the momentum going. You say that you will retire in this house and not sell. I hope that is true and that you enjoy many years in your home but life has a funny way of throwing people curveballs. If for some reason you were to split from your spouse, have a medical emergency and need to refinance the house to pay bills, accidentally pass away and leave the property to your heirs, etc.. All these scenarios will be more complicated due to the SRO designation. That’s my humble opinion and it comes from experience. Good Luck -Adam Dahill

housebywe | 11 years and 2 months ago

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If there is any possibility of you reselling in the short term, would recommend converting to a 3 family. The code restrictions are much more demanding for a three family (sprinkler required, enclosed boiler, etc), but I assume you have sprinkler already installed. At the moment, duplex plus two rental incomes is in high demand and inventory is very limited. As property values continue to rise, reselling a two family may fetch you a premium in the long term as more affluent families look to expand into more living space (e.g. triplex over garden rental). Since reselling is on the back burner for you, would suggest you convert to the space you will be most comfortable in as these difference in resale wont be worth it if you are not happy in your own space.

ferney1c | 11 years and 2 months ago

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Dear Adam_Dahill, Thanks for replying to my posting. To keep repeating myself, what do you think of my reply to “House By We”? We want to retire in the house and we are not concerned with what happens to it when we are no longer living. We just want to make it comfortable now and perhaps have options to sell if we want to (we probably won’t want to). We have our Certificate of Non Harassment. Thanks for any advice you can give. Ferney1c

ferney1c | 11 years and 2 months ago

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Dear House by we, Thanks for responding to my questions. I already have my certificate of non harassment. I may or may not decide to sell my property. My husband and I want to and will probably retire in Brooklyn living in the property. That is why I wonder if it is even worth it to do all the changes. It is nice to have an opportunity for a better sale price and a more comfortable living space. That is the reason we are considering doing the renovations and going from SRO to a family home. There is no mortgage on the property. What would be the most economical renovation we could do? Would a one family, two or three family home be better? As I said in my posting, I don’t want to find out I’ve done all these changes and it only hurt our situation. Thank you for your help. Ferney1c

adam_dahill | 11 years and 2 months ago

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I would most definitely make the legal change to 2 or 3 fam from SRO. You will be thankful when it comes time to sell the property.

housebywe | 11 years and 2 months ago

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One of the most daunting implications of an SRO conversion is the process of filing for a Certificate of Non-harassment. Since this requires time and patience, get the process underway while time is not of the essence so you are well poised for a conversion if and when you decide to sell. SRO status will have a significant affect on your resale value,

housebywe | 11 years and 2 months ago

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DOF has the last word: http://www.nyc.gov/html/dof/html/property/assessment.shtml Contact them directly with questions.

housebywe | 11 years and 2 months ago

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it used to be a much more ominous proposition, but the city enacted a fix in 2005: http://www.nytimes.com/2005/03/04/nyregion/04harlem.html

mrohrmann | 11 years and 2 months ago

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It’s all based on the assessment of the property. Depending on what version of the Reno you go with and how much work is needed.