Flipper · East Elmhurst, NY · Member since 2015 · 47 posts · 28 votes
Hi,
I just wanted to know if any of you had any information on raising rents on six families in New York. I have deal at the moment with low market rents. I want to go ahead and rehab some units but need to factor the increases to my spending on the units. I know about 1 to 2 year leases but what about tenants that have been there for 5+ years? Any advice would be helpful.
Rental Property Investor · NY · Member since 2013 · 844 posts · 350 votes
9y
@Anthony Perez A friend of mine bought a six family in Brooklyn and is going thru the same exact thing at the moment. For you to raise a unit to market rent you are going to have to get one of the tenants to leave, which is not going to be easy if they have been their for several years and have below market rents. One of the tactics some landlords use is to go to court and get permission from a judge to move into one of the units or a family member move into the unit for 2 years until you can rent it on the open market again.
It is an expensive and long process and not easy. You need to buy the building on it's current income not future income. Even at current income at a 3 cap you will not make money. Most sellers in nyc are selling at a 3 cap LOL and think thats a great deal for you. My friend is under water on his purchase every month.
Investor · Brooklyn, NY · Member since 2015 · 127 posts · 57 votes
9y
@Anthony Perez
6 families are subject to rent stabilization (if it was built before 1974 which I assume it was) you can only raise rents based on what the city sets. And you MUST renew the lease no matter what. You can't bring it up to market rents until someone moves out as Eddie has said. Some landlords try to do very shady/illegal things to get their tenants to move out but that's not a good strategy.
You can try to rehab but you need the tenant's permission and you can only pass on a very small % of the costs to a rent increase.
Investor · Tampa, FL · Member since 2016 · 58 posts · 13 votes
9y
I would agree with those posts. 6 family units are not the easiest when comes to price increase. I think above 4-familiy house the issue arise. It`s a long process. But who said that things might be easy?