Bohemia Blog by Agent Peta Couzens
Buying an investment property in New York City is one of the most sound financial decisions one can make, as the property market is unlike any other in America in regards to rental demand, resale, and the overall return on your investment. The best vehicle for this investment property is a traditional Condo (investor/rental friendly) with no board approval or very limited board involvement in the leasing process.
It is important to remember that even though the New York City market is competitive and dynamic, leasing a property for your desired amount always comes with its own set of challenges.
Below are a few pointers on how to set yourself on the path to making your property work for you by getting the most rental return possible.
Use A Good Realtor
You would think that goes without saying, but it certainly doesn’t. In realty all realtors are not created equal! A good realtor is worth their weight in gold, because their experience, market knowledge, and hard work will ultimately get you the end result you want - as well as save you time, money, and headache along the way.
Leasing a condo unit is not the same as leasing a traditional rental unit and it is important that your realtor be versed in these differences, so they can be transparent and forward with potential tenants when explaining the application process. Time is typically always of the essence in the leasing/moving universe and there is no easier (and more common) way to kill a deal than to surprise the prospective tenant at the 11th hour with new information that they should have known right from the beginning.
It is equally important to work with a realtor that is familiar with the pricing in the building/area, as well as the other comparable inventory in the neighborhood so that you can achieve the best possible pricing result.
Get Your Head Around The Associated Condo Fees
Often times condo boards/management companies have fees associated with the applications/move ins. They can be more numerous (application fee, processing fee, move in fee, move out fee, etc.) and higher than traditional rental units, and in some cases can even prove to be prohibitive. It is important to remember cost is a central driving factor for all prospective tenants and if they have to pay a broker’s fee (majority of the time they do), as well as potentially pricey associated condo fees, your property may start to look like a less appealing option versus others where that is not the case.
You and your realtor should take a look at your condo fees and decide if they are going to be an impediment to leasing your property quickly and efficiently. If it is decided that they are, you should consider not passing this entire cost on to the applicant. Splitting these costs when they are high (or even assuming them entirely when they are very high), is an excellent way to make the property more appealing, as well as make the rental process much smoother. It may cost you in the short term, but you will be the better for it when you secure a good tenant and achieve your desired pricing result.
Every investor’s situation is different, but in some situations you may want to consider paying the broker’s fee. In this scenario your realtor can advertise your property as No Fee and it should certainly attract more attention, because let’s face it, no one likes paying broker’s fees and regardless of budget everyone wants to feel like they have gotten a good deal on some level.
Consider Staging Your Property
Staging is a tool that is not just reserved for sales. There is no question that prospective rental tenants like to see what the end result can look like, versus simply imagining it, and staging can prove to be a very helpful tool for this.
Though staging a property can really never take away from its appeal, it can prove to be an unnecessary expense on your end in the wrong circumstance. When you have settled on a realtor and are plotting next steps, this is the time to have the staging discussion.
If you have a high rent/high end property staging should be a strong consideration, especially if you want/need to move the property quickly.