Rent Coach

Rent Coach: First rent, then buy; tough talk on rent reductions

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Q. My husband and I are moving to Manhattan and want to buy an apartment.  We were thinking about renting to get to know the city before deciding on a purchase, but I’m having trouble justifying the prospective rent payments that would be substantially more than our last mortgage.  What should we do?

A. It almost always makes sense to rent to rent for a year if you are relocating to the city.  The move is going to have so many changes for you – jobs, friends, family, and environment – that buying an apartment at this time would be a disservice to yourself. 

Get to know the neighborhoods, the buildings, and your routine, and take a year to solidify the parameters of your apartment search while you rent. 

You won't necessarily need to "settle" while you rent either. In the past few years, developers have built quite a number of rental buildings aimed at people like you who can afford to buy but for other reasons choose to rent.  You can certainly find apartments whose finishes are comparable to co-ops or condos--or you can even sublet a co-op or condo. 

As for the high cost of rent here compared to the mortgage you're used to paying, I suspect that you will find waiting a year to be a sound financial decision compared to the alternative--making a major purchase decision at a time of stress without giving yourself the time to properly research your options. 

Q. I own a condo in Manhattan that I started renting out after my family and I moved to Westchester a few years ago.  I have a tenant that has been in the apartment for three years, but he recently lost his job and has been slow to make the rent payments. 

Last week he called and asked if I would lower the rent for awhile until he got back on his feet.  Is this a good idea?

A. Once a tenant has notified you that their financial situation has substantially changed, you need to be proactive in protecting your investment.  I would not lower the rent for your tenant.   This type of action can change the landlord/tenant relationship in a negative way and result in your tenant taking advantage of your good will and potentially costing you a substantial amount in lost rent should his financial situation fail to improve. 

You might consider offering to let him break the lease so that he can find a more affordable place.  Explain that so long as he wants to stay, he will need to fulfill all of his obligations under the lease and that it might be in both of your best interest to part ways at this time.  


Mike Akerly is a New York City real estate attorney, landlord, and real estate broker. Rent Coach also appears in AM New York's Thursday real estate section.

 

 

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