New York City · Member since 2023 · 11 posts · 7 votes
Hi - I am looking to buy my first 3 family multi-family home in Astoria, NY. It is not rent stabilized.
I plan to live in one of the units, while continuing to rent out the other apartments. The seller said the current tenants have no lease and rent month to month.
The seller also rents out the basement. It is not a legal basement, but apparently everyone seems to rent out their basement here in Astoria.
Looking for advice for any pitfalls here. Is it a problem that these tenants have no lease? What about the tenant that lives in the basement?
Can I ask the seller to put them on a lease first as part of the negotiations?
Rental Property Investor · The Vampire State · Member since 2013 · 2k+ posts · 2k+ votes
1y
As you know, NY is extremely tenant friendly. If the basement is not a legal living space, I would not rent it out. As soon as there is any trouble with the basement tenant, they will run to the municipality and turn you in. Every NY tenant, especially downstate has been completely educated via advocacy groups and TV/web ad campaigns on the ins/outs of wielding the legislative controls to take advantage of the uninformed landlord. You don't need that hanging over your head with the basement tenancy. Maybe you can live in the basement unit?
For the MTM tenants, I strongly recommend you generate your own lease with the help of a landlord/tenant attorney, but keep them on MTM. I have posted in detail here in BOP why this is smart business in NY - feel free to search for those posts.
There are serious headwinds in NY to successful buy & hold investing, but if you can navigate the pitfalls, you can operate your business and generate income. Good luck!
Rental Property Investor · The Vampire State · Member since 2013 · 2k+ posts · 2k+ votes
1y
As you know, NY is extremely tenant friendly. If the basement is not a legal living space, I would not rent it out. As soon as there is any trouble with the basement tenant, they will run to the municipality and turn you in. Every NY tenant, especially downstate has been completely educated via advocacy groups and TV/web ad campaigns on the ins/outs of wielding the legislative controls to take advantage of the uninformed landlord. You don't need that hanging over your head with the basement tenancy. Maybe you can live in the basement unit?
For the MTM tenants, I strongly recommend you generate your own lease with the help of a landlord/tenant attorney, but keep them on MTM. I have posted in detail here in BOP why this is smart business in NY - feel free to search for those posts.
There are serious headwinds in NY to successful buy & hold investing, but if you can navigate the pitfalls, you can operate your business and generate income. Good luck!
Realtor · Willow Grove, PA · Member since 2017 · 970 posts · 638 votes
1y
Hi @Dennis D. nice to meet you here on BP. So it my experience month-to-month tenants aren’t necessarily a problem, but it does come with some unpredictability and is only something I would do temporarily.
The bigger concern is the basement unit. Even though it's common in the area, if it's not legal, it can lead to serious issues..fines, insurance problems, or even being forced to vacate the unit. That’s a risk you’d be taking on from day one.
You can absolutely ask the seller to put the tenants on leases before closing. My is. Ery tenant friendly so make sure to do anything you can to protect yourself as a landlord. Bringing in a local real estate attorney familiar with NYC housing laws wouldn’t be a bad idea either moving forward.
Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
1y
Have the seller remove the basement tenant before closing. Then you can decide lease or MTM for the legal tenants.
Remember, it's not only the basement tenant that can give you headaches; if either of the 2 legal rentals has a problem with you, they can withhold rent, contact the city, and make you wish you were a tenant yourself.
If you are counting on the rent from the basement to make this deal work, I'd move on to the next opportunity. Just not worth the risk, imho.
Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes
1y
Got you — here’s the more casual version:
Hey, first off — that’s exciting! Buying a 3-family in Astoria is a strong move, especially if you're planning to live in one unit and rent the rest. That setup can really help you offset the mortgage.
Now, about the tenants being month-to-month — that’s not necessarily a bad thing. Actually, it gives you more flexibility. Once you take over, you can keep them, raise rent (with proper notice), or ask them to leave if you have other plans. Just make sure the current rent amounts are legit and documented. Ask the seller for proof of what they’re paying — Zelle, Venmo, whatever — so you’re not going in blind.
The basement though... that’s the part to watch out for. If it’s not legal, you technically shouldn’t be collecting rent on it. A lot of people do it, sure — it’s kind of an open secret in Astoria — but there’s always risk. If DOB shows up or a neighbor complains, you could get hit with fines, and it’s not something you want on your plate, especially as a first-time landlord. I wouldn’t count that income when running your numbers.
As for asking the seller to put the tenants on leases — you can ask, but think about whether you actually want that. A lease locks you in. Month-to-month means you get to call the shots after closing. What you should definitely ask for, though, is something in writing confirming who lives there, how much they’re paying, and how long they’ve been there — just so there are no surprises.
One more thing — check the Certificate of Occupancy. You want to make sure it really is a legal 3-family. If it’s legally a 2-family and you’re buying it as a 3, that can cause major headaches with insurance, violations, and even your loan.
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