Multi-Family Investing in the Bronx

[Lei Marte]

Hi all,

I grew up in the Bronx and somehow the prices of multi-families seems to be calling me back!

I am analyzing an opportunity that has had several price cuts in the area I grew up in.  It's below $1M for a 7-unit, but it seems most if not all are rent stabilized.  Even with the low rents, the property seems to break-even monthly on Mortgage and Taxes, however, I am not sure what the maintenance and utilities looks like.  I am used to investing in MA where you can push literally all the costs on to the tenants, but what are landlords responsible for here in NYC?  I believe heating costs fall on the landlord, does anyone have an idea of what it costs to heat 1-2bd apartments with heating oil/steam heat?

I would likely house-hack and I am willing to put up my fair share of the mortgage, however, I am wondering it utilities and maintenance would turn the whole equation upside-down.  It's a brick pre-war building if that helps.  Any NYC multi-fam investors that can provide some advice??

Best,

Lei

[Abel Curiel]

Hello @Lei Marte!

Good to see that your old hometown is calling you back! I've been on BP for over 6 years and it seems like this current market is what investors have been waiting for. 

In NY, landlords always cover the water costs. Heating costs depends on whether or not there are separate meters on the property for each individual unit. If there are separate heat and electrical meters, the tenants assume those costs. If not, the landlord covers the cost for those utilities.

Units that do not have their own individual meter typically have heat factored into the rent since the landlord covers that cost.

Maintenance is covered by landlords as well unless otherwise specified in the lease i.e. if your lease states that drywall repair/replacement and emergency plumbing are the responsibility of the tenant.

That said 1 bedroom apartments should run between $150-250/mo. and 2 bedroom apartments $200-325/mo. **depending on household size.

Oil heating costs are at an all time high these days - here is some info that you might find helpful - Fox Article; Monthly avg. home heating prices

Regarding rent stabilized buildings, you may not be able to get market rents even for a vacant unit so I'd look into NY's Rent Guidelines Board before seriously pursuing this building. For more information on allowable rent increases for rent stabilized apartments - click here.

Best of luck to you on your move back home!

Abel