Rent-Regulated Tenants: A Boon for Buyers?
Can rent-regulated tenants make buildings more attractive to prospective buyers? They sure can, according to the cover story in the real estate section of yesterday’s Times. The article examines the pluses and minuses of buying a property that comes with rent-controlled or rent-stabilized tenants in tow. A family that purchased a four-story brick house in…
Can rent-regulated tenants make buildings more attractive to prospective buyers? They sure can, according to the cover story in the real estate section of yesterday’s Times. The article examines the pluses and minuses of buying a property that comes with rent-controlled or rent-stabilized tenants in tow. A family that purchased a four-story brick house in Carroll Gardens for $1.5 million, for example, found that one big plus was a price tag that was about $1 million less than it would have been if there weren’t two rent-controlled apartments on the top floors. The major potential minus with such properties, of course, is the hassle owners can encounter when they try to give such tenants the heave-ho. (Check out the debate over the situation at former HOTD 227 Berkeley Place.) Any landlords care to weigh in on the pros and cons of having rent-regulated renters? Have any readers taken advantage of the rent-regulation discount?
When the Price Includes Tenants [NY Times]
Photo by bondidwhat
Goldstein’s an exception – he’s financially secure enough to live off investments. Plus, his father works for a hedge fund. Not the typical rent-stabilized tenant by any means! 200K+ would be a major incentive to most of us mere mortals.
Yeah, 12:05. Fanatics like Goldstein are just one example of why I’d prefer to bypass rent-controlled or -stabilized tenants at all costs. I know Goldstein doesn’t exactly fit these categories, but he is similar in that he’s decided to pass up a sh**load of cash to prove a point. All you need is one nut job like DG and you’re in court for the forseeable future. I’m a SMALL landlord with a job of my own to boot. I couldn’t afford to spend my life in court fighting special-interest extremists.
If you were a senior citizen, and you lived in your apartment most of your adult life, raised your family there, had strong ties to houses of worship, neighbors and friends, local shops and services, perhaps had the funeral of a spouse in a local funeral home, and had several generations worth of memories tied into every inch of your apartment, you might not want to move for all the money someone could wave in front of you.
Not everyone is motivated by money. Is it so hard to understand that someone, especially someone older, would not be eager to uproot themselves from a place they are comfortable in? If they are alone, it would be doublely hard, plus trying to find a new apartment in this market and time would scare anyone. While 500K might move most of us from an apartment, to someone whose entire life has been in those walls, no amount of money would be enticing.
Um, concrete examples of people who won’t take a buy-out? Ratnerville, folks. Goldstein’s still holed up.
Bstoner said: “Can rent-regulated tenants make buildings more attractive to prospective buyers? They sure can…”
That’s a bit misleading. Can rent-regulated tenants make a building more “affordable”? … sure (by reducing the value of a property to the seller).
But “attractive”?! Maybe I’m splitting hairs here but there is NOTHING attractive about having rent-regulated tenants.
And I agree with 10:30am: “The guys in the article are paying something like 110k+/year (incl taxes and maintenance), receiving $15k/year, and thus spending 7.5k/month on a duplex with a job attached.”
And by the way, that doesn’t include the capital outlay to purchase their “duplex.” For $300,000 down (20%) plus $7,500 a month (which would support around $1.25 million in mortgage) you could buy a $1.5 million house WITHOUT rent-regulated tenants … or is my math wrong?
I don’t understand why paying off the rent-stabilized tenants is so hard. The story on 227 Berkeley suggests that the price of the house was cut almost 700K because of one rent-stabilized person. The posting suggests that person wouldn’t take 200K or even 500K to just leave!! That is ridiculous. Why would someone ever turn that down?
I can understand if you had a place where you were paying $200 on the UWS for a 2-bedroom. But this is not the case in Brooklyn. Anyone have any concrete stories where a person was offered a lot of money to leave and just wouldn’t?
I was glsd to see this story esentially supportive of tenants who are less than fortunate, and of the obviously well-off buyers who were sympathetic to them. Nice to see that some people have a little compassion. And don’t consider tenants to be monsters.
Anecdotally, I know of two other buyers: myself with one tenant (not controlled) and a friend who has 4 kind-of-roomers, two students and two others (they did not bother to change the status of their brownstone) and in both cases there were no problems. Neither of us are rich.
I saw that place in CG. It was a decent 4 story 20 x 45 house. The bottom duplex was in good shape.
To be honest, it is not a bad deal. They were asking $1.55M. Most 3 story houses are now asking for $1.3-1.5 – even some on the other side of the BQE!!!!
I think the Carroll Gardens family got bad real estate advice. They coouldn’t find a decently renovated house without tenants for $2 million? I know lots of places are listed high, but I doubt they go for that amount. Their brownstone better be on a prime place block to go for that much with tenants.