If you want to sublet or recently purchased a building, then your income in this area can offset your experiences.
Maintaining an apartment can also create several headaches that could be financially costly over time. New rental laws that set deadlines and limits to the security deposit and other aspects of the lease could also put you into an uncomfortable situation.
These tips can help you to transition to the responsibility of providing a safe, healthy home for other people.
To-Do List for Renting Apartments in NYC
Your first step must be to familiarize yourself with any building rules that exist. Some boards can dictate the length of a sublease or the price you can charge. Rent regulations might apply in some areas where subletting isn’t allowed.
It would help if you rent in a building with more than units before having the right to sublet, and the request must happen at least 30 days in advance.
Then you’ll have these additional steps to complete on your to-do list.
1. Understand what fees exist.
Strict rules exist on how much you can charge for a background check. You must also follow the notification expectation for rental increases or lease termination. The maximum cost for an application fee is $20, and that figure must cover the credit and background check.
A cap on late fees is either $50 or 5% of the monthly rent – whatever figure is the lesser amount.
2. Get to know the rental reforms in NYC.
Rental reforms in NYC now give market-rate apartment tenants some of the same protections as those with rent stabilization. This fact impacts how you can operate as a landlord directly. You can only request one month’s rent as a security deposit. Tenants also have the right to inspect an apartment to document its condition before moving into it. Another walkthrough is possible when moving out, and an itemized statement of charges is necessary within 14 days.
If you fail to meet deadlines, you forfeit any right to keep part of the security deposit.
3. Know what the best price is for your rental.
Be honest about the appeal of your apartment and its condition. You can charge whatever rate the market will bear. If the cost is too high, you will have the listing stay empty for several months. Setting it too low will reduce your profits. Winters in NYC are challenging to find tenants, so a concession might be necessary – like paying the broker’s fee or offering a free month of rent.
You could also offer professional movers access to make it easier for a tenant to get into their new apartment.
If you have a rent-regulated apartment that you want to sublet, you cannot earn a profit. Furnished units do allow a 10% increase in the monthly amount to compensate for the use of those assets.
4. Don’t settle for the first qualified tenant.
If you find a reputable, responsible, and financially qualified tenant, you can eliminate a lot of future headaches. Make sure to call every reference and follow through on the background and credit checks. Since information from the NYC housing court is no longer usable for the decision-making process, the data you collect in the other areas can give you insights into the individual or family.
Your goal should be to find someone who can earn 40 times the rent. It might cost you a little extra time and money to go through this process, but it will be worth it when you find the right tenant.
5. Take a thoughtful approach with your lease.
Your lease must provide clarity for all signees in case something unexpected happens. You’ll need to define the length of occupancy, its type, the price if pets are allowable, and every potential responsibility for yourself and the tenant. You can avoid most problems at this stage by being open to negotiation. Then make sure you run the document by an attorney before you try to fill your rental vacancy.
Are You Ready to Start Renting in NYC?
Once you have those items completed on your to-do list, you must ensure that your insurance and maintenance remain up-to-date. Expect to pay at least 5% of your rental income on maintenance expenses if you own the building.
If you sublet the space, you must provide the new tenant with a phone number to contact for repairs, emergencies, or troubleshooting issues. The cost of hiring a managing agent is about the same as your maintenance expenses.
When you’re ready to rent out an apartment in NYC, this guide can point you in the right direction. It is not intended to serve as legal advice.