1 The Landlords’ Guide to Keeping their New York Rental Unit Occupied

For those that want to buy investment rental properties in New York, whether residential or commercial units, it can be stressful to read on sources like Bloomberg.com that occupancy rates are expected to continue to drop before a full recovery. NYC apartment rents have fallen up to fifty percent! How do you protect your investment?

When you own a New York rental, you want your investment property rented out and for the tenant to pay on time and keep the unit in excellent condition. That is why finding the right tenant is essential to minimizing risk.

Should You Invest in a NY Rental Property?

You really cannot go wrong with a real estate investment in NYC. Not as long as you can hang onto it until the economy improves. A lot of real estate investors are taking advantage of the current economy to save money on New York apartments that are selling at prices far below what the market value was a year ago. But if you are the owner of an investment property, you will sleep far better at night knowing your rental property is in good hands. How do you ensure you find the right people who will pay the rent on time, abide by the terms of their lease, and keep the unit in good condition?

New York City is irrefutably of the world’s most exciting cities to live in and landlords can typically be very discerning and charge high rents. It is not unheard of for a tiny studio apartment to be rented out for thousands per month and have a massive amount of applicants when available for rent. Buying when the market is a buyer’s market and renting a unit out can help you build a great financial portfolio.

With the current economy, landlord’s options might not be as varied as previously. It is important that you still exercise your right to choose the best tenant possible in order to protect your investment. Here are some tips for getting (and keeping) the unit rented:

Check Your Pricing – But Carefully

Because New York apartment vacancy rates are up, it might be tempting to drop your prices. But be aware that there are laws that state you cannot raise the rent above 6% annually so that’s important to remember when reducing rental rates to rent something out today that you could be losing money for as long as that tenant stays in the space. Price competitively but don’t’ simply cover your mortgage and taxes. Ensure it is worth it to rent out the unit when considering expenses such as: repairs, maintenance, and your time in tenant relations and managing the upkeep of the dwelling.

Know Your Rights and Your Responsibilities

Laws exist to protect tenants and landlords. Learn the laws. Know: when you can legally enter a rented unit, how to go about evicting a tenant, what your repair obligations are, and how much interest you need to pay on a security deposit, etc. By familiarizing yourself with regulations you prevent yourself from landing in hot water with a tenant who may move or take legal action because you are not doing what you should be doing.

Select the Right Tenants

The right tenants make your job easier and your venture more profitable. They pay rent on time and keep the unit in good condition so that it can and will appreciate in value. Carefully screen applicants.

• Meet with applicants in person to make a judgement call on their authenticity
• Check out their application to ensure they are being truthful about their financial situation and their past record
• Take the time to do a thorough background and credit check so you can thwart common landlord / tenant problems such as property damage, and non-payment of rent.
• Be nice and be approachable. If you have a good reputation with tenants, your life will be easier and they may even refer tenants to you if and when they need to move.

Keep Communication Open

Times are tough for a lot of people. If you are approachable, chances are that you will not have unpleasant surprises to deal with. Knowing the rent may be a few days late can help you prepare financially and if tenants like you, they are going to be more apt to keep you abreast of their situation instead of dodging contact with you and / or moving out in the middle of the night. Most experts suggest an annual inspection of rental units as well so you are well aware of the condition of the unit on an ongoing basis.

Tip: Any financial expert would suggest that when you have a mortgage against a rental property, that you keep a buffer fund in your account for unforeseen emergencies, repairs, and for the possibility of a vacant unit for a few months.

Unless you are a clairvoyant New York rental landlord, you cannot possibly predict whether or not tenants will be ideal renters (and even the best tenants can become down on their luck) but taking the time to: know your rights and responsibilities, be a good landlord, prepare for emergencies, and choose the right people to rent to will help you minimize risk and maximize your investment.
Ref: http://bloomberg.com/apps/news?pid=20601103&sid=aA71rZ6s2kxk

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