New York City has one of the most expensive real estate markets in the nation and draws plenty of interest from landlords. It's a hard market to break into—especially if you spend millions on an apartment or building and then get burned by tenants. There are a few unique aspects of the New York City rental scene to keep in mind if you're tempted by this high-powered market: rent control laws and the tenant blacklist.
New York City Rent Control Laws
The majority of New York City's rent control laws apply to buildings with six or more units or tenants who live in the unit since 1971 without a break in the lease. Rent control establishes how much rent you can charge for a particular type of unit, based on the maximum base rent set by the city housing agency. In addition, rent control laws require you to provide certain services in every unit. If the rent offered is below the maximum base rent established by the rent guidelines board, you can increase the rent on a unit once every 2 years.
You are more likely to run into a situation where you deal with rent stabilization instead of rent control, if you're dealing with buildings of 6 or more units. The building has to have a build date between 1947 and 1974 to fall under rent stabilization laws. Stabilization applies to units where the rent is $2,500 per month or less. Rent higher than this could lead to deregulation of the rental price. If the household income of the tenants exceeds $200,000 for two years, rent stabilization may also no longer apply to that unit. Like rent control, a rent guidelines board establishes how high rent increases can go and a definition of reasonable rent prices.
New York City's Tenant Blacklist
Rent control and stabilization might make establishing yourself as a landlord in NYC a tricky business, but you get a great tenant screening tool: New York City's tenant blacklist. The New York State Office of Court Administration provides information about housing court cases to tenant screening services. As a landlord, you gain access to this information through a third party tenant screening service, not the New York State office directly. This information was recently changed in 2012 to remove tenant names, but court case identification and information regarding why the case was brought to court are still available. This information is helpful to determine whether you are dealing with a blacklisted tenant, why they ended up in court, and whether they would be a suitable tenant for your New York City rentals.
Utilizing the New York City Tenant Blacklist
A blacklist doesn't do you much good if you don't use it appropriately. A tenant screening service such as the one offered by Landlord Station provides you with the information you need from the New York City housing court so you can make decisions about prospective tenants. A thorough tenant screening protects you from wasting your time with a tenant who isn't going to stay in your units long term. Screening also helps you avoid the hassle of evicting a deadbeat or difficult tenant. You don't want to put your time and money into a tenant you have to remove a few months later.
New York City has a number of challenges for a landlord, especially if you're just learning how to manage a property, but the rewards are great as well. The protection provided by the New York City tenant blacklist helps you cut down on the amount of time wasters who cross your path.
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