Rental contracts with Manhattan apartments
Posted by Wei Min Tan on July 27, 2022
How are rental contracts like with Manhattan apartments? This is a common question from investor clients intending to rent out their investment condos. Below are the key points.
Length of Contract
The length of rental contracts in Manhattan is usually one year. Sometimes, tenants will sign for two years, especially if the prevailing rent is low. If the contract is more than a year, owners will usually negotiate an escalation clause whereby the second year rent is higher than the first year.
With rentals in Manhattan, the tenant usually stays for a few years. This means that although the contract is for one year, the landlord and renter will negotiate the renewal terms about 60 or 90 days before the contract expiry date and do a rental contract renewal, known as a lease renewal in local terminology.
In this market, which is the hottest rental market ever, the tenant has been paying all fees. The major fees are the broker fee and board package fees. In addition, tenant also pays moving fees, which is the fees paid to the moving company. As such, the fees to move for the renter can be quite high. This is why renters usually renew instead of move to a new place every year. With each move, there’s the stress of moving and a lot of fees.
Investor client’s condo which was rented in 1 week. Apartment was renovated and updated with new kitchen and bathroom. It’s a prewar condo located close to Central Park.
Security deposit in the Manhattan market is equivalent to one month’s rent. This will be held by the landlord and returned to the tenant after the apartment has been vacated. We cannot accept more than one month security deposit per New York’s rental regulations.
Landlord and tenant can also negotiate additional terms. This can include requests where the apartment needs to painted, or an additional occupant needs to be added to the rental contract. An additional occupant can be a sibling who visits frequently or a spouse who will be living with the tenant. The way Manhattan condominium buildings are run, if someone is living in the apartment or going there all the time, but they’re not listed as occupants, the owner may get fined.
Weimin’s article: Expenses as Owner of Property in New York
When representing investor clients, we market the client’s apartment for rent, review tenant applications and arrange the necessary for the apartment to be occupied. We only consider the investment cycle complete when our investor client starts getting rental income cashflow.
Client’s condo booked at pre-construction stage. Upon completion and closing, rented at premium rents. Close to United Nations, Citigroup, Blackstone, Blackrock offices.
What We Do
We focus on global investors buying Manhattan condos for portfolio diversification and long term return-on-investment.
1) Identify the right buy based on objectives
2) Manage the buy process
3) Rent out the property
4) Manage tenants
5) Market the property at the eventual sale
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