Buying condo with rent stabilized occupant

[Parney Willson]

In New York City, I have seen foreclosed condos under market, but have rent stabilized tenants paying about $800 or similarly ridiculously low rents. 

My question is if were to buy such a property, what are my rights as a landlord/owner in terms of rent?

I wouldn't want to force the current tenant out and would instead wait them out.  But am mostly concerned with what happens to the rent stabilization once/if the tenant moves on from the unit? Does the apartment become de-regulated thus allowing me to rent at market value? If not, suppose I decide to move into it instead? Suppose I move into it then move out the next year?

Is there a drawback I am missing with regards to buying a foreclosed condo with a rent stabilized tenant and waiting them out? Is it possible for me to learn more about this tenant (age, health, etc.)?

[Ronan Donnelly]

Hi @Parney Willson, my short answer is that there is easier and less risky money to be made in real estate than buying a condo with a rent stabilized tenant, in NYC.

1) Condo - lots of additional due diligence needed on the condo association and risk to you if others do not keep up with their dues

2) Rent Stabilized tenant - NYC recently implemented a new set of regulations called the Statewide Security and Tenant Protection Act 2019. This is undoubtedly impacting the value of rental property in NYC and for good reason, your ability, as a landlord, to increase rents and remove non-paying tenants has been dramatically reduced http://www.realestateindepth.c...

3) Cap rates below financing rates, how are you going to get cashflow?

Good luck