Guest post: 10 rules for renting your condo right

by Ron Gitter

What appears to be the beginning of a beautiful landlord-tenant relationship can turn ugly faster than you think.  So notes lawyer Ron Gitter, whose sage advice has graced this blog before and whose Web site contains much more valuable information.

Perform your due diligence when you intend to hand over your precious property to a stranger, or even a friend or relative, he counsels.

For your peace of mind and financial security, consider all the issues that might have an impact the tenancy.  Be upfront about any conditions in the apartment that may be of concern to the tenant.

At the same time, there is no reason for your relationship with your tenant to be of the love-hate variety: He or she gets to live in a great apartment in the Big Apple and you receive a significant and, sometimes, obscene amount of rent.

Where we live, that’s peaceful coexistence.  The 10 or so suggestions below should ensure that war doesn’t break out:

(Flickr photo added by Mr. Wright)

1. Comply with all condo rental requirements: You must submit a rental application to the managing agent.  Even before the lease is signed, make sure that your proposed tenant understands that financial disclosure, various documentation and a background check may be required prior to the building’s approval of your tenant.

2. Check the creditworthiness of your tenant:

It’s either a perfect storm or a Bermuda high

If you think the weather's fine, just dive in. (Flickr photo by SuperFantastic)

There is a pretty strong likelihood that soon-to-be released second-quarter reports will show strong sales in Manhattan along with prices that have more than held their own.

Indeed, the Wall Street Journal said yesterday that sales of Manhattan apartments were 80 percent higher than one year earlier during the second quarter. The pace was the fastest since the summer of 2008, an illustration that the market has been recovering during the spring selling season, according to writer Josh Barbanel.

He also quoted unnamed “analysts” as saying they expected to see that prices had risen a bit, too, when brokerage reports are released.  In fact, they proved to be generally flat.

From what I have observed, however, the second-quarter surge occurred most during the first month and has faded as of now.

No one can say whether prices will slide again in the near or more distant future, though it is anecdotally evident that sales right now are sluggish over all.  For example, although the New York Times chronicled growing interest in large so-called “family” apartments, a glut of studios and one-bedroom units persists.

For buyers, the current situation looks to me like good news for a number of reasons.

Seller rejects $2 million bid for m127 penthouse

The winning bid of $2,047,500 (including buyer’s premium) was rejected today for the 2,255-sf  penthouse at m127 following yesterday’s auction of six condos in the building, at 127 Madison Ave., according to Paramount Realty USA, which conducted the event.

With three bedrooms, two and a half baths and a 338-sf terrace, that unit alone alone was subject to the developer’s approval. The listed price was $3.4 million, and the discount amounts to 40 percent.

The five two-bedroom condos on the block were sold without a reserve, and the developer already has signed those contracts, Paramount said.

Bids minus the penthouse totaled $6,384,000, resulting in an average price of $1,276,800.

The sum of all the sold apartments represents a 28 percent discount from the previously listed total of $8.85 million for them.

If this is your first dip in the waters of my blog on the auction, you may want to have a look at my posts earlier today and also yesterday.

Subscribe by Email

Share This Post

Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

Malcolm@ServiceYouCanTrust.com
Web site

If you just can’t get enough of m127, read this

This poorly illuminated photo may give you some idea of the crowd.

In the event you want to see the official press release from Paramount Realty USA on yesterday’s auction of six condos at the building called 127m, at 127 Madison Ave., I figured I’d make available the first nearly two and a half pages of the eight-page document issued by its public relations firm (the remainder being even more fluff).

But first, I’d like to point out that I’m always tempted to say an auction can be the best determinant of market value.  Unfortunately, there are so many anomalies to such sales–e.g. auction fever, number of bidders, terms–that I have my doubts.

One example of a different sort of anomaly at the m127 auction was the winning bid for the first of the two units yet to be sold.

Although the otherwise identical sixth-floor condo went for $1.234 million (including buyer’s premium), the fifth-floor unit was hammered down for more money: $1.244 million. Then, the last apartment reverted to the pattern established by the three previously sold units on higher floors, which went for progressively lower prices; the winning bid was $1.229 million.

Now, for the press release, reproduced verbatim:

m127 auction enjoys brisk bidding, modest prices

Hiding in the dark at the left is the auctioneer (thanks to my limited flash).

An estimated 250 individuals filled the room in which six new condos listed for a total of $12.25 million in a building called m127 went up for auction today.

In bidding that accelerated in mere seconds before nearly reaching the final price, the units at 127 Madison Ave. sold for $8,431,500 including a 5 percent buyer’s premium.  The total represented a discount of 31 percent.

Excluding the penthouse, the price per square foot averaged $821, which strikes me as rather low for a condo in that area, but the building’s does have its drawbacks. (Because the penthouse sale is unconfirmed, I’m pretty much leaving it out in this post.)

In fact, comparing condo sales in the building’s zip code (10016), the average for two-bedroom apartments, of which only two traded in the last month, is $1,216 per square foot, according to the Online Residential (OLR) database. But I’m not positive whether that is a contract or asking price (and there’s a big difference, as you know).

For all condos in 10016, the average per square foot is $1,116 versus two bedrooms in the whole borough: $1,223.

According to the Miller Samuel appraisal firm, the average price per square foot for all Manhattan condos was $1,154 in the first quarter.  And the median sale price of two-bedroom condos was $1.330 million.

For the five two-bedroom condos sold at the auction, the median was $1.244 million; the average was $1,276,800.

Five of the units were offered without a reserve.  They were hammered down at prices ranging in descending order of $1.417 million for the 1,554-sf two-bedroom, two-bath apartment on the eighth floor to $1.229 million for the approximately same-size unit on the second floor.  (Prices include the buyer’s premium.)

The 2,255-sf  penthouse, which has three bedrooms, two and a half baths and a 338-sf terrace, went for only $2,049,500, subject to the developer’s approval; its listed price was $3.4 million, and the discount amounts to 40 percent.

Terms of condo auction at m127 are changed

Purchasers who forked over $30 for a bidding package learned minutes ago that the developers of the building at 127 Madison Avenue no longer face foreclosure.

According to an announcement by Paramount Realty, which is conducting the auction, “as of Friday, June 25, 2010, Bank of Smithtown has been satisfied in full.”  The statement continues:

The Sponsor wants to assure you that they can and will close with every buyer at today’s auction.

Referring to today’s lending environment, the announcement said further that the seller will grant a 30-day extension to the original 30-day closing date provided that the purchaser increases the downpayment by 5 percent with seven days’ notice. The sales must be all cash.

In addition, all five of the condos being offered for sale without reserve will be displayed on a board as “available units.”  The successful bidder of the first round will win the right to select his or her unit of choice, followed by the winner of the second round and so on.

The high bidder of each round is limited to purchasing no more than two units per round.

These eleventh-hour changes are odd, making me wonder just what gives.  Unfortunately, you’ll have to decide for yourself if you are planning to attend the auction and bid.

Subscribe by Email

Share This Post

Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

Malcolm@ServiceYouCanTrust.com
Web site

When in doubt, let it all hang out

The law minces no words.

When it comes to letting buyers know about a defect in a property that can materially affect its value, it is impossible for sellers to err in disclosing what they know.

And when it comes to working with a broker, the broker may not fail to disclose his or her relationship to buyer or seller. Nor may brokers hide any material defects of which they are aware.

With respect to sellers, they need to appreciate that defending themselves in court will far exceed the amount of money they think, probably erroneously, they will lose

Interest heats up for absolute auction of condos

Flickr photo by Capture Queen.

Although I have been writing about real estate auctions for some time, the interest that I have observed in the selling of six condos at 127 Madison Avenue in Manhattan this coming Sunday at the Roosevelt Hotel has been intense.

Hundreds of readers have looked at my posts on the auction, an unprecedented four readers have called me for advice on the sale, and two asked me to represent them at the auction (before I explained to them the hazards that they faced if their bids were accepted).

Most property managers really tick me off

For some folks, arrogance knows no bounds. (Image from the New Yorker.)

Possibly the biggest bane facing buyers, sellers and their brokers is property managers. You’d be hard-pressed to find one of us who praises any of them.

In a purchase of a Chelsea co-op that finally is scheduled to close on Thursday, the behavior of the  property manager of the building in which my buyer will live strains credulity.

It took this dame one and a half weeks to get back to the listing broker and me – only by e-mail – regarding the hefty board application that we submitted.  Her delay alone is unacceptable.

Price is important, but it shouldn’t be everything

Living room of $660,000 one-bedroom co-op on Manhattan's Upper West Side.

This is one of four apartments that I took the opportunity of broker open houses to visit last week on the Upper West Side of Manhattan.

The price of $660,000 for perhaps an 800-sf co-op may or may not seem too steep in the eyes of a prospective buyer.  However, less important than the value of the place is the way that the savvy listing broker talked about  price by putting it into intelligent perspective.

His is a lesson often lost on other brokers and, even more frequently, on consumers in today’s uncertain market.