Rules to Follow When Renting Out Your Condo in NYC
How strict are condo rental rules in NYC? Are there any landlord rules or special condo rules I must follow before renting out my apartment? What are some examples or samples of condo rental rules? We’ll explain in this article how to rent out a condo while abiding by the condominium rules in your building!
How Strict Are Condo Rental Rules in NYC?
It’s often a surprise to first time landlords just how strict condo rental rules in NYC can be. Renting out your condo apartment in NYC is not so simple as just renting out your house out in the suburbs, where you don’t need anyone’s permission to do so.
While condominium apartments are considered real property and do allow owners to rent out their apartments, they can often have some of the same restrictions as a co-op’s house rules.
As you’ll see from the sample condo rental rules included in this article, condominium by-laws can require various fees, minimum lease terms, credit and housing court checks, mandatory insurance coverage, specific clauses in your lease agreement, or a right of first refusal on the proposed lease.
Is Investing in NYC Condos Still Worthwhile Given How Strict Condo Rental Rules Can Be?
Yes, investing in condos in NYC can still be highly worthwhile, despite potentially strict condo rental rules and low capitalization rates. You’ll simply have to factor in the additional logistical hurdles to renting out your condo in NYC.
Furthermore, you’ll have to factor in the fees you’ll have to pay to the managing agent or to your condo association into your rental income calculations. You’ll also need to factor in the cost of additionally insuring your condominium association.
We hope you’ve learned from this article that you cannot simply list your property for rent without regard to your condominium rules.
So is buying a condo in NYC worthwhile? Does it still make sense to be a landlord given that NYC real estate taxes are already high?
Before you make that determination, you should read our article on some of the cons and considerations to buying an apartment in NYC, such as the high cost of living and high income taxes.
However, there are also many pros to buying a condo in NYC such as the benefit of depreciation on your investment property which acts as a tax shelter against your rental income, and potentially your other active income if you are a qualified real estate professional in the eyes of the IRS.
Learn more about how depreciation for rental properties work by reading Publication 527 from the IRS.
Co-op apartments are generally cheaper, and some of them do have more flexible sublet policies, but is buying a co-op a good investment in NYC?
The answer will depend on how you intend to use the property, and how long you expect to hold the property. If you are only looking to live in a co-op apartment for a few years before needing to move or upgrade, it may not be such a good investment due to higher closing costs and more restrictions on subleasing co ops vs condos.
If however, you are intending to reside in an apartment for a long time, a coop may be a better choice due to coops being 10% to 40% cheaper than comparable condos of the same size and quality.
Read the Full Article: https://www.hauseit.com/condo-rental-rules-nyc/
Disclosure: Hauseit (https://www.hauseit.com) and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).
