Most New Yorkers know what it’s like to be renter. But what if you were on the other side? Whether you own an apartment and are looking to rent it out, or are a renter trying to sublet your place, here’s what you ought to know about playing landlord:
Know the rules
If you own a co-op, you’re subletting to a tenant. If you own a condo, you’re renting it to them. Differences between the two can include the board’s right to approve the tenant, the allowable length of the sublease or lease, fees, and even the price you can charge. Condos are typically easier to rent out than co-ops because they tend not to care who the renter is as long as they meet the basic requirements. Co-ops, on the other hand, can reject a tenant without giving any reason at all. So, make sure you have a clear understanding of the rules and regulations in your building before embarking on a search of any kind.
Set the right price
If you’re subletting a rent-regulated unit, you're not allowed to profit by charging a higher rent. But assuming that your place isn’t rent-regulated, feel free to charge market-price. Check out rents on similar properties on sites like StreetEasy or Zillow to get a sense of what you should charge.
Find the right tenant
Is he or she financially qualified and responsible? A tenant shouldn’t be spending more than 35 percent of his disposable income on rent; shouldn’t be involved in a lot of litigation; and should have a good credit report. (To check on credit, try Experian—the would-be tenant would pay the $15 fee.) Since rent payment histories don’t show up on credit reports, be sure to also ask for a letter of reference from a previous landlord.
State your terms
Most problems can be avoided if you make sure to carefully state all terms up front—such as price, length of occupancy, move in/move out dates, damages, deposits, number and kind of pets allowed, and extras like responsibility for utilities. You can download standard lease forms from REBNY or Blumberg.
Be aware of your responsibilities
Which repairs will you, the owner, be responsible for? Also, if you’re a co-op or condo owner, you need to ensure that all systems—plumbing, appliances, heat—work, and that safety measures such as smoke detectors, carbon monoxide alarms, chain-door guards and window guards are installed.
Is your apartment insurance up to date?
First, make sure it’s current. Then notify the insurance company that you’re renting the unit out. In addition, your enhanced homeowner’s insurance will cover contents, walls and fixtures, but not theft or damage by the tenant. So you might want to provide for theft and damage in your contract with an extra security deposit.
For more, read “BrickUnderground’s 7-step guide for first-time landlords.”
In Case You Missed It: Every so often, BrickUnderground digs through the archives to find the best advice our experts have shared through the years.