All Forum Posts by: Drew Donovan

I have a lot of experience with this. It’s expected in a new development condominium. If you were an early buyer, the schedule A you reviewed detailed the real estate taxes for the first year, but this year tends to be misleading as it is an estimate usually coinciding with a building that is still under construction. It is inherently less expensive while still considered under construction.

Within the offering plan there is likely a paragraph within the tax opinion letter that covers the estimated value of the units once fully assessed. If you take your percent of residential common interest times the estimated assessed/taxable value, and times that by the tax rate (~12.3% - I am assuming based on tax class 2) you will then get your units real estate taxes for 7/1/22-6/30/22. You can compare that to what you see on your notice of property value to determine whether or not you are being reasonably taxed.

Your property manager/board should be actively working with a tax certiorari to fight the values at the association level. This needs to be done now via a TC109 and TC203 (before March 1 or March 15) so that your association preserves their rights to protest the taxes for this 7/1/22-6/30/22 tax year. The TC forms mentioned above are specific to Tax class of Four and could differ if you were in a different tax class. 

In short, I recommend this be fought at the association level as I do not believe at the individual unit level is feasible. The fees for the petitions and applications are generally nominal. They (the tax certiorari) works on contingent fees and are only paid if successful in grieving the taxes. 

If you need anything else, let me know. I work with several good firms and can connect you. They work on larger associations so they may not be interested but doesn’t hurt to inquire. 

I concur with @Dori. It's not your fault but better property managers will have a concise welcome packet introducing them to the property and a checklist of items they should read over in preparation of the lease commencing. You'd have this for move in/out policies, insurance requirements for movers, etc. It's harder to do on a SFH but a must for larger multi-family properties so that you extend your organized policies/forms/checklist to them for a smooth welcome.

Open to the opportunity if it has scale. 

You cannot third-party manage rentals without a real estate brokers license in NY. You can however third-party manage condo associations. As stated earlier in the thread, you can self manage your own rentals.

None require a license based on you description. You have to repair these on your own or pay a contractor to fix all issues if not completed already. You have to submit a certificate of correction and possibly affidavits. This will cost about $300 per violation but realistically you can do it on your own. You submit pictures of the fix as proof. If there is an outstanding balance for the violations that remain unpaid, they need to be paid as well. I would use this to your advantage as it’s not that big of a deal in the grand scheme. Good luck!

You really can't charge more thanks to the 2019 Tenant Protection Act. Your year over year increases are limited to what the Rent Guidelines Board dictates (0-2% in the most recent years depending on the (1) and (2) year renewal options). 

You can increase rent fractionally for capital improvements. For buildings with (35) units or less, landlords can collect only (1/168) of improvement costs, and, for buildings with more than (35) units,  (1/180). That means, if the rent in a building with thirty-five (35) units is $1,000 per month, and the landlord expends $4,000 in improvement costs, the rent may only be increased by (1/168) of $4,000 -- or $23.81 -- for a total of $1,023.81. This was copied and pasted from https://www.nyrealestatelawblo...

Happy to answer more in depth if you'd like if you have specific questions. There is some upside (low turnover, convert multiple units into one to create a new fair market regulated rent, etc.)

Make sure you get an inspection. 

Howard, how much are you cash-flowing on that $550K investment? You don't have to tell me but if it's ~$15K pre tax for the year since you have no debt service, is 2.7% cash on cash return worth it? 

Based on experience managing NYC condominiums/cooperatives and their finances, I'd guess that ~$15K/2.7% to be a better than average scenario. The common charges tend to be significant and the real estate taxes add up (unless you have a tax abatement that isn't expiring).

NY isn't dead and at that price point you won't see a drastic reduction from what you could sell for today. I do think we have another 12-24 months before the cycle picks back up and properties appreciate as there is too much inventory. It'll inevitably appreciate with the low interest rates and stimulus/inherent inflation. 

In short, it's only a question you can answer. Is the current cashflow worth the work? If so, keep it. If not, move on.

My educated speculation...

I am confident New York City is not dead but it did get the kick in the balls that it desperately needed. My wife and I moved to Union County in 2015 because we wanted to buy, couldn’t afford what we wanted to buy in the City, and didn’t want to pay NYC rents, so we found more affordable living in Jersey. I used to commute in daily as I property manage in Manhattan, Brooklyn, and Queens. I now go in three days a week and work remotely the other two (really four days) but I kind of have to be in the City due to the nature of my job. 

Anecdotally, most companies don’t have the infrastructure or the desire to allow people to continue working remotely indefinitely for a multitude of reasons (i.e. training new employees, collaborative team efforts on new initiatives, company culture, supervision, etc.). Bigger companies may implement larger work from home initiatives but the employees living in the City are more concentrated within small businesses than they are within conglomerates.

These employees and business owners may move within an hour radius or so for better quality of life, but at the end of the day, their high paying jobs/businesses will largely dictate the need to be in more frequently. Furthermore, I love the city, it’s food, drinks, culture, entertainment, and hustle and bustle and believe it to be incomparable; I am not alone with this feeling and it’s what attracts many people. 

I do think NYC will continue to see a downward shift in residential sales and aggressive rental prices for the next 12-24 months but eventually it’ll come back. It’s too desirable, interest rates remain low, and the stimulus and inherent inflation will prevent it from taking a perpetual nosedive. Hudson County will likely be ok but I am not nearly as informed on the market as we only have a couple properties there in which I am virtually never involved. Personally, I’m looking for multi-family in New Jersey within an hour or so vicinity of New York due to the aforementioned. 

I think the find of a qualified handyman/woman is exactly what you needed. Digitize the rent collections and payables and have the handyman/woman go through a maintenance checklist weekly/monthly to ensure the property is in good order. 

In general, smaller buildings in NYC are difficult to manage as they entail a slew of services (rent collection, bookkeeping, maintenance visits, tenant disputes, leasing, local law compliance, payroll, insurance, insurance audits, etc.) that aren't cost effective for the owner of a small building, and the fees aren't enticing enough to afford the best talent in property management space. The more units you have, the better the management service can be.