Violations of Loft Law Put Landlords In Jeopardy Throughout NYC

A new article by Real Estate Weekly highlights the jeopardy landlords are placed in by violating the Loft Laws.  As many as 339 buildings throughout the City are sanctioned as a result of the law and 264 buildings lack a Certificate of Occupancy meaning that tenants can withhold rent until the buildings are brought up to code.  This has led to many landlords not receiving rent for years resulting in bankruptcies, pre-emptive sales and buyouts by tenants.  It has also led to deteriorating conditions in the buildings due to revenue not being produced to fix repairs.

According to the article, the states interim multiple dwelling (IMD), has given tenants of illegally-converted lofts a tremendous amount of leverage over the process of getting the units compliant with the law.  Property owners have complained about renters not assisting with allowing access to the units for the necessary fixes.  Also tenants must agree to the improvements that must be made by the landlords.  Landlords have nine months to complete the first phase of compliance, which includes compiling reports about the present state of the building and how it will look once improvements are made.  Jason Frosch, a Loft Law specialist at the law firm Borah Goldstein says that a building owner on average will have a year to obtain a certificate of occupancy before tenants can go on perpetual rent strike. However, since most of them former factories and warehouses that’s nearly impossible to do. He states that “the requirements of the Loft Law are costly and time-consuming.  The law doesn’t acknowledge that reality and it requires owners to front those costs while allowing the tenants to deprive them of a revenue stream that is necessary to pay those costs by withholding rent. And it creates a perverse incentive for certain tenants to delay the process and obtain a windfall for doing so."

The IMD drafted in the 1980's was initially aimed warehouses in Soho, Chelsea and Tribeca.  The new updates to the IMD from 2010 also targets warehouses in what is deemed industrial sites located in Williamsburg, Dumbo, Bushwick, Bed-Stuy, Fort Greene, Park Slope and Long Island City.
Senator Martin Malavé Dilan, a Democrat from northern Brooklyn has introduced a bill allowing owners more time to make improvements before tenants could withhold rent. That bill was not voted for by the legislature and owners are hoping that they will open a special session to vote on it.  It is uncertain whether they would have the votes to have it pass at this time.

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/violations-of-loft-law-put-landlords-in-jeopardy-throughout-nyc/

Avoidable Mistakes for the First Time NYC Real Estate Investor

When investing in real estate in New York City, it is common to think that you will turn a serious profit with a quick flip.  Having that mentality has worked in the past but now more than ever it is important to have a long-term strategy in investing in real estate in New York City.  The gains that you will receive normally come from solid real estate investment strategies which include increasing the value of your holdings by hiring a reputable New York City property manager.  Hiring the right property management company will only enhance your ability in building equity and increasing passive income. 

Quick returns as we have mentioned are rare.  Many people go and come out of the real estate investment industry quickly because they never received the returns they were expecting or outright lost money.  So what are some common mistakes that we see from first time real estate investors?

Purchasing a property you wouldn't think is suitable for yourself

If you cannot imagine yourself living in the house you are considering purchasing then you shouldn't.  The question I always ask clients is "What if something catastrophic happens...would you live there?" If the answer to the question is no then the property isn't the right fit for you.  The goal on your purchase is to find something that tenants would be receptive to.  If you are not that interested, than this would be a clear sign that you wouldn't be as energetic into the investment.   

Not having "rainy day" money for emergencies

There are many times that I have seen investors go into a transaction with zero reserves.  This would put a strangle on your personally if you do this.  You should account for basic monthly expenses as well as have a reserve on hand in the event of a unforeseen repair or expense.  You should always take into account utilities expenses and general maintenance fees such as the property management and landscaping.  You should also have a cash reserve fund in place in the event that a tenant decides not to pay rent for instance or the boiler needs an emergency repair.  The failure to do this can result in potential withholding of rent.  Also you will also have to tap into your personal money to fix such as a retirement account or credit card which will affect you and your family for potentially years. 

Taking it personal and forgetting the bottom line

At the end of the day, owning a rental property in New York City is nothing more than business.  You should treat it that way and not let your emotions run your decisions.  Sometime it can seem personal when you have tenants and they want to tell you their life stories for their failure to pay the rent.  You have to be tough and always treat the managing of your property like your own business.  A top-notch NYC property management company can assist you in staying on course with your objectives.  They will also lighten your load and allow you to concentrate on other pressing issues that you may or may not have.  This can result in shedding the burdens that you may have and allow you to purchase additional rental properties.  

Addressing these common mistakes will help you along your way in being a successful real estate investor.  Sure there are other variables at place in maximizing your returns but by focusing on the tips above will help you in achieving your long term goals.

If you are in need of property management in New York City for your real estate purchase, Blue Harbour Property Management can assist you.  Contact us at 718-843-1185 or email at info@blueharbourpropertymanagement.com.

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/avoidable-mistakes-first-time-nyc-real-estate-investor/

NYC cracking down on Landlords failing to fix Violations by Withholding Rent

The City of New York has finally had enough of landlords not fixing violations attributable to their buildings.  They have decided to take a legal measure not used since the Koch administration and withhold rents it pays for public assistance at the buildings in question.  The two landlords had a combined 239 violations of which 78 of those violations deemed "hazardous".

The landlords were among eight warned by City Hall and Public Advocate Letitia James in May to clean up their buildings or have their rent withheld.  The buildings are located in the Bronx and upper Manhattan.  The rest of the landlords decided to make the necessary repairs and were not penalized.  For more information on this click here.

The failure to cure violations on your property can become a major obstacle in profiting on your investment.  Although the above result appears to be an extreme case, you can see what the failure to upkeep your property can lead to.  In most cases, the choice of a reputable NYC property management company can assist you in fixing violations on your property.  The majority of property managers have software that can detect when violations have been assessed and can take actions to cure them.  In the alternative, choosing a property mangement company in New York City that has the expertise in preventing the violations can save you money and hassle in the long run.

Troubleshooting potential issues and having a long term strategy in place for preventative measures are some of the services that Blue Harbour Property Management provides.  If you are in need of a property management company that can assist with your troubled property, call us and we will meet with you and determine what is the best plan for the health of your property.

http://www.blueharbourpropertymanagement.com/nyc-cracking-landlords-failing-fix-violations-withholding-rent/

Visit us at www.blueharbourpropertymanagement.com

Should I Sell or Hire a NYC Property Management Company?

Many people have jobs and are asked to move to another location in their company.  It is at this point, the owner has to come to a decision.  Should I sell my house or should I rent it out?  How am I going to handle emergency repairs when the tenants call?  What happens if I rent and the tenants stop paying the rent?  Will this take up too much of my time?  These are normal questions that every homeowner should have.  It is a tough decision as it was probably a huge accomplishment to purchase your property and have spent a significant investment in it after purchasing.  In light of this, here are some factors that the homeowner should consider in determining whether they should sell their New York City property or keep it:
Plans on returning to NYC- If your move out of state or the country is temporary then it is probably a good idea to keep your property.  A short term rental can be procured and you would be in the position of moving back into your place.  You should look at the cost of selling your property and the time to find something of the same quality and nature of what you gave up.  One would imagine that it took you time to find a property that you were interested in.  It would be the same way this time around.  Also the cost of finding replacement housing as you find a new permanent property will be costly both in terms of the rental expense but also the inability to build equity in the property you are renting.
The current real estate market- While the real estate market has bounced back in the several years, it still hasn't reached peak conditions.  Also, if you have not built any equity in your house the chances are you will lose money in the transaction.  While some boroughs has seen an appreciation in the value of their homes, it is not universal.  Waiting a few more years to sell would be a prudent choice.
Investment return potential of your NYC rental- New York City rental properties have huge potential when it comes to give you investment returns.  Rental prices have skyrocketed in areas located in Brooklyn and Queens.  In comparison to selling you will be able to see returns in your investment almost immediately if you rent it.  You will also get the benefit of appreciation by holding the property for a few more years.  If you decide to sell there are drawbacks such as the tax ramifications of selling and having to pay transfer taxes immediately at the sale.
Hiring a professional to handle your property while away-Most owners are concerned about what will happen to their property if they are away.  Hiring a professional NYC property management company can alleviate your concerns that your property will fall into disrepair.  A full service property management company will be able to handle emergency requests from tenants, maintain correspondence with you and the tenants, collect rent and handle all other day to day operations for your property.   

If you are unsure of whether you want to sell or rent your property Blue Harbour Property Management will be happy to speak to you about it.  Because we are leaders in the industry, we will be able to share with you where the market is presently and we can determine what is the best avenue for you to take.  Keeping your New York City property or selling is a serious choice and needs to be reviewed on a case-by-case basis.

http://www.blueharbourpropertymanagement.com/sell-hire-nyc-property-management-company/

Visit us at www.blueharbourpropertymanagement.com.