How can we create a master lease with subletting clause, Brooklyn, NY?

Question

Hi BP Community,

My husband and I are rookie investors, and we've been trying to buy our first investment/owner-occupied multi-family for several years. We are pre-approved for a decent purchase price, but, unfortunately, we keep getting outbid whenever we make offers. We're now partially giving up on the idea of purchasing a property in NYC and have decided to continue renting for the time being.

Last month, the downstairs tenant in our current duplex passed away, and now we have an opportunity to rent—or master lease—the first-floor 2-bedroom unit for five years. My landlord and I have agreed that we would pay an additional $1,900 per month for that unit, including two garages, starting in May.

However, the entire property needs at least $10,000 in renovations, including about $3,000 just to paint and make the first-floor apartment rentable. We hope to sublet that unit for $2,500–$2,700 per month once the renovations are complete.

Would it be reasonable to ask the landlord for a 2–3 month rent break and bring the rent on the first floor down to $1,800 in exchange to complete the renovations? Other renovations include changing the wood floor and waterproofing the over garage deck and fix the leaks on the roof. Note: my husband is a contractor.

Also, how would you recommend structuring a master lease? Is there a service we can use to create and submit one to the landlord so he doesn’t have to handle the paperwork?

Your expert advice is sincerely appreciated!

Nancy.

Zebiniso Nancy Rashidova · Answer

Thank you very much for your comprehensive, and detailed reply, Mohammed. You mentioned great points, especially in the case of a sale of the property, which brings me to another point I was thinking of. Can I offer him a purchase option in 5-7 years? Would I include that in this negotiation, or keep it for future discussions?

Mohammed Rahman · Answer

Hi Nancy,

First off, you and your husband are thinking creatively, and that’s half the battle when trying to break into real estate—especially in a competitive market like NYC. It’s frustrating to keep getting outbid, but the opportunity you’re looking at now could actually be a great move. Master leasing that first-floor unit and turning it into a cash-flowing sublet is a smart play.

Asking the landlord for a rent reduction or a 2–3 month rent credit in exchange for completing the renovations is totally reasonable. You’re putting in over $10,000 worth of work—including about $3,000 just to make the place rentable—and your husband is a contractor, which means professional quality at no cost to the landlord. This is value-added for him, and it strengthens your position to negotiate. Framing the request as a win-win—where you improve his property and take on the labor while he gives you a little financial flexibility—makes it a pretty fair ask.

When it comes to structuring the master lease, you’ll want an agreement that clearly lays out the terms. Make sure it locks in your monthly rent (ideally at $1,800 instead of $1,900) for the full five years, explicitly grants you the right to sublease, and outlines that you’re responsible for maintenance and improvements. It should also include the rent credit or abatement upfront and address what happens if the property sells or the landlord wants to terminate the agreement early.

To get this in writing, you can use platforms like Rocket Lawyer, LawDepot, or Avail to create a basic master lease. These services make it easy to customize templates and are budget-friendly. If you’d rather have it done professionally, a local real estate attorney can draft something airtight for a few hundred dollars—which might be worth it, just for peace of mind.

Overall, this is a great way to build experience, generate income, and get your feet wet with tenant management and property improvement. If the numbers work out on the sublet, this could even outperform some traditional rentals. Let me know if you’d like help drafting your rent reduction request or putting together a sample lease structure.

You’ve got a great opportunity here—keep going.