Gea Elika's Blog, page 150

Home Exchange: Is It for You?

I am a huge fan of the home exchange. I’ve completed ten exchanges and want to share with you this wonderful way to have free accommodation while traveling.

Home exchange is popular around the world. But, exchanging a New York City apartment has specific challenges. Strict policies regarding subletting for renters and co-op owners often make it difficult. Although there is no money involved in home exchanges, this sharing economy situation is often misunderstood.

Are you cut out to be a home exchanger? If so, is the home or apartment you rent, own, or are looking to buy a place that will allow home exchanges?

 

Venice Street by David Trawin via LifeofPix.com

Home Exchange is for You If…

You like to travel. You prefer to live like a local, shop at local markets and cook your meals. You don’t like to stay in hotels. You are not afraid of people you don’t know staying in your home. You are not tied to your possessions. You are not worried about difficult situations that might arise, though rarely do. You are flexible, easy going and adventurous. Find out more about home exchange here.

Exchanging Your NYC Home

One advantage of living in NYC is that it is a very popular place people from around the world want to visit. Manhattan is the most popular, but Brooklyn and Queens are also hot spots. People who want to exchange in Brooklyn and Queens are travelers from overseas and bold domestic visitors.

If you are already a fan of home exchange, then you know the pitfalls specific to NYC real estate that complicate making arrangements. This might include a difficult landlord or co-op board; nosey neighbors; limits on the number of days visitors can stay at your residence, and similar issues.

 

Image via Pexels.com

 

There are several ways to get around these barriers. Many people in NYC don’t reveal their home exchange plans to their landlords. I did exchanges in five different apartments in five different neighborhoods in both Manhattan and Brooklyn and never had to tell my landlord.

Co-ops that require board approval for residents who are not owners are more challenging, but not impossible to overcome. Check the rules at your co-op or the space you are looking to purchase to make sure you can accommodate home exchanges.

Other Considerations

If you don’t have home owner’s or renter’s insurance, definitely purchase it! The worst experience I ever had was someone breaking a wine glass in my apartment. But accidents happen and you want to be prepared.

Make sure someone nearby has extra keys to your home if your guests lock themselves out or in the case of an emergency.

I exchange keys by mail, so we both have them in-hand when we arrive at our destinations. There are other ways to exchange keys, including KeyCafe’s service, available all over NYC.

Intervac’s home exchange checklist has many additional valuable tips.

All’s Well that Ends Well

Most home exchanges work out very well. When you have open, honest communication with your exchange partner, there is less of a chance for things to go wrong.

Be kind and helpful to each other. And remember, you will be in their home while they are in yours. If you both treat your swap accommodation as you would your own home, everyone will have an amazing home exchange!

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A Suitable LLC Corporate Structure

A limited liability company (LLC) is a popular business structure, particularly for real estate investors. Starting with the basics, an LLC offers you the best of both worlds. It gives you the limited liability of a corporation without the double taxation. So, you do not file a corporate tax return. Your share of the profits are merely reported on your individual tax return.

The LLC has become a more favorable option than an S corporation (a corporation with less than 100 shareholders) particularly for smaller and less complex businesses, such as where the owner is personally involved in the management. This could very well be the right structure for you to consider when making real estate investments

Limited liability + tax benefits

Instead of forming an LLC, you could purchase liability insurance. This may not protect you as fully as you think, though. Insurance companies put in exceptions that you may not be comfortable with, or your policy limit may still leave you on the hook for a large amount of money. You may still choose insurance since it provides you a degree of protection, but an LLC also shields your personal assets.

In these times, there are a lot of lawsuits, even though some may be bogus. For instance, you may not be there when your renter throws a big bash, and someone gets hurt. But, the injured party may still sue you, the owner. Under an LLC, your assets outside of the business are protected.

Keep in mind; this protection is not so clear if you have to file for bankruptcy. There is a concept called “piercing the corporate veil” that allows a creditor to disregard the limited liability and hold the owners personally responsible for the debts. This applies to corporations and LLCs. The bankruptcy judge has to determine that the company and owners are not separate.

We have already mentioned that income from an LLC is only taxed once. A corporation pays its own income taxes, and any dividends passed on to you are also taxed to you as an individual. An LLC does not pay its own taxes. It passes through the income to you, and you only pay individual taxes.

Foreign buyers

Many foreigners have chosen New York City real estate as an investment. It is seen as a safe haven, and an appreciating dollar means there is the potential for capital gains. These investors face the same choices, such as whether to hold the property in their own name, a corporation, or an LLC. An S Corporation is off the table for foreigners. Also, an LLC has been used as a way to hide your identity. But, last year, the U.S. government required title companies to hand over the buyer’s identity for purchases of $3 million and up.

While an LLC provides liability protection, there is an added level of complexity when it comes to taxes. You need to check your home country’s tax laws to see if it makes sense to form an LLC. The IRS typically requires you to withhold taxes on income from your real estate business under the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA). This includes rents, and ultimately the proceeds from the sale of the property. This seems complicated, but your buyer’s agent can assist you in this matter.

There are also estate tax reasons for a foreign investor to form an LLC. For a non-resident alien, you usually want to avoid direct ownership. One way to do this is have a foreign irrevocable trust own a U.S. LLC.

Concluding thoughts

An LLC is fairly easy to form, and you do not need a Board of Directors. If you are the only owner, the IRS classifies your real estate company as a sole proprietorship or a disregarded entity. Income and capital gains flow directly to you, and you pay the taxes once while getting liability protection. If you have more than one member, you are a multimember LLC and are taxed like a partnership. This only means you file an informational return, but the LLC does not pay a separate income tax.

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Do You Need a Property Manager for Your Investments?

Do you like the idea of profiting from multiple rental properties, but the thought of unexpected tenant phone calls makes you apprehensive? Although rental investments offer an appealing opportunity for financial freedom, they often take an unforeseen toll on your personal time when repairs are needed, or tenant disputes arise. However, by investing in a property manager, you can avoid this toll and still profit from your passive rental income.

What Property Managers Do

Property managers are real estate professionals who are well-equipped to handle tenant situations and locally manage properties, giving you the freedom to travel, live out-of-state, or dedicate your time to another job. They are the point of contact for your tenants, taking you out of the equation for calls. Specifically, they will help with these time-consuming tasks:

 

Image by Vivienne Gucwa / Flickr

 

– Collecting rent and deposits
– Handling disputes
– Organizing repairs
– Performing post-occupancy inspections
– Scheduling regular maintenance
– Processing tenant applications
– Handling evictions diplomatically

Unfortunately, completing these common tasks requires a lot of work and direct contact with tenants. A property manager can act as a professional contact between you and the tenant, lessening the burden for you. With a property manager, collecting rent and conducting other related business is a routine transaction rather than a hassle.

Having a property manager is especially worth the cost when you have more than three units to manage. The more properties you have, the more you’ll have to deal with repairs, leases, disputes, and much more. Having someone to help you with these tasks will make operations more efficient, keep tenants happy, and give you the peace of mind that everything is running smoothly.

How You Benefit

Your investment, whether a single family home or condo, will need a property manager to keep tenants accountable and the place in good shape. No matter if you are local or have moved away from your investment property, the property will be kept under the watchful eye of a local property manager who cares.

Property managers can actively process applications and adhere to the Fair Housing Act when selecting the next qualified tenant, ensuring you are in good legal standing throughout the tenant selection process. Your property manager will also be familiar with drafting and ratifying leases, streamlining the leasing process.

Another benefit is a higher tenant retention rate. Residents like to rent properties that are well-kept, and a property manager ensures that broken appliances or other needs are addressed expediently and courteously.

What’s the Cost?

How much you pay for this service depends on the property management company you choose. On average, property managers receive 4-10% of the monthly rent as commission. If you desire a different rate, you can negotiate those terms in the property manager agreement. In our opinion, the standard commission is well worth the peace of mind and freedom you gain.

From saving you time and inconvenience to managing your non-local properties to even helping you avoid legal trouble, a property manager is a wise investment.

To learn about the property management services that Elika provides Read more.

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Minimalism: How This Japanese Lifestyle Trend Can Save You Stress and Space

There is a trend known as minimalism that is becoming more and more popular in Japan. It involves eliminating unnecessary items and clutter in order to free up finances and simplify life. In the United States, we are encouraged to think that bigger is better and the more, the merrier. However, there are many benefits to minimalism that we can apply to our daily living to reduce stress and free up space.

The Stress of Clutter

Modern psychology affirms that crowded conditions and disorganization can cause stress and anxiety. Clutter is a sign of not having a place for everything, and can it distract or irritate you, especially when you can’t quickly find necessary items. By taking control of your living space, and throwing away unused and unworn items, you can restore order to your home and reduce stress in your life.

 

REUTERS/Thomas Peter

 

The KonMari Method for Clothes

Everyone needs a starting point, and your closet is a good place to begin. Freeing yourself from garments you don’t need will liberate you from unnecessary closet clutter. Clothes can create a mess, especially when you don’t put your garments back in your closet or hamper.

By using the KonMari Method, however, you can donate pieces you don’t absolutely love and develop a wardrobe capsule that will simplify your choices. The result will delight you. You will have each season’s apparel neatly organized in the closet, and your capsule will be composed of only high-quality garments that you will actually wear.

Minimalism Elsewhere

This process will work for items throughout your home. You don’t have to be as extreme as someone with just a spoon and fork in the utensil drawer, but you can pursue simplicity by giving away the items you don’t use.

Empty that cluttered drawer full of old bills and unused pens, and donate the bread maker that never made it out of the box. Do you have excessive furniture, electronics, and decorative items in other rooms of the house? Donating these can help someone in need, while making your living space more open and clean.

The Benefits of Minimalism

More Room. Homes with less clutter simply look bigger. Clean countertops, open spaces, and efficient storage solutions free of unnecessary junk make the most of a home’s interior.
More Money. You also benefit financially from this lifestyle, by not making impulse buys.  If you make intentional purchases toward high-quality goods, they tend to last longer than cheaper items.
Pay it Forward. Your community benefits from donations, making goods and clothing affordable for others in need.
Save Time. You will find that cleaning your house will be less of a chore when there are fewer things to pick up and tuck away.

Try It!

You don’t have to donate everything in your house except a t-shirt and a mattress, but you can employ some minimalist principles to gain more self-discipline and restore a little more organization in your home.

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Why Reverse Mortgages Might Not Work for Retirement Income

With a reverse mortgage, older homeowners have the opportunity to borrow money against the equity in their home if they have a small existing mortgage or own their home outright. This type of mortgage is now a popular way for baby boomers who are finding ways to fund their retirement. A reverse mortgage, referred to as a Home Equity Conversion Mortgage (HECM), is a unique kind of loan for all homeowners aged 62 (and older) through which they can liquidate a part of their equity in their home.

This is different from a second mortgage or conventional home equity loan as no repayment is required until and unless they are unable to meet their mortgage obligations. This sounds like an ideal deal for retirees. However, a reverse mortgage has several drawbacks and should only be considered by a small group of people who have strong reasons to go for it.

 

Image by American Advisors Group / Flickr

 

Unlike a typical home loan, instead of you paying the bank, the bank pays you, and the loan has to be repaid when you move out, sell the house or die. Homeowners can receive this money as a lump sum, a line of credit or a monthly payment and the amount that can be borrowed depends on your age (62 years to qualify), your total equity and current interest rates with the length of the loan term.

Why Is It Not A Good Retirement Strategy?

The fee expenses attached to a reverse mortgage can be high. All expenses pertaining to origination fees, service, a mortgage insurance premium and closing costs may be too much to bear. In case an individual dies, the home has to be sold to repay the mortgage. Therefore, it is likely that the home does not pass to a homeowner’s heirs unless they have repaid the balance. Moreover, the loan has to be repaid if the homeowner moves out of the house or does not live in the house for more than a year. This also includes entering into a long-term care facility.

As a homeowner still owns the home even after he signs up for a reverse mortgage, he will be responsible for paying all property taxes, maintenance, insurance as well as other expenses. In case the homeowner fails to manage regular expenses, he may end up forfeiting his home. Along with higher fees on the front end, interest rates for reverse mortgages are higher as compared to a conventional mortgage. They are also usually higher than a HELOC (home equity line of credit)

Reverse mortgages may offer a few benefits but borrowing money as a lump sum or via monthly payments is not the ultimate option for people looking for easy ways to pay off a mortgage. It is mostly ideal for individuals who have no heirs or almost negligible retirement funds. Reverse mortgages can be used as part of an overall retirement plan but should not be considered if you are facing a financial crisis. If you find yourself struggling on a limited income, there are several other public and private benefits other than a reverse mortgage that can support your finances without a higher interest rate.

What You Should Do

If you are facing financial issues and are under stress, seek advice from a financial advisor who may be able to suggest you a way other than a reverse mortgage for managing your expenses. Saving a little extra money each month goes a long way. Plan and map out your finances and do not consider a reverse mortgage as a financial crisis management tool for funding your retirement.

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8 Reasons You Should Work with an Exclusive Buyer’s Agent in New York

Investing in real estate in any community requires a major commitment, but in New York City, potential buyers will probably be required to fork over their life’s savings, spend countless hours viewing apartments that they’ll never live in, and possibly even run into a bidding war.

The city’s market is incredibly competitive and comes with its own set of rules, which is all the more reason a buyer should not attempt to tackle the buying process alone. When it comes to NYC real estate –– regardless of know-how and budget, working with an exclusive buyer’s agent to purchase a slice of the Big Apple might be well worth someone’s while. And here’s why.

1. Buyer’s agents might have access to listings that their clients don’t.

They might even get wind of a hot new apartment before it hits the market, giving a client the edge to view it and make an offer before the general public knows about the listing.

 

 

2. Buyer’s agents can explain the minutia of the buying process in New York City, so buyers don’t miss any important details.

There’s a lot to know when purchasing property in NYC, and no one will explain the details in a more concise fashion than a broker. From what neighborhoods to search in, to how soon to make an offer as well as a seamless closing process, a buyer’s agent will guide their clients every step of the way.

3. Buyer’s agents should advise if a property’s asking price is too high.

The last thing any buyer would want is to pay too much. Establishing rapport with a buyer’s agent will eliminate the chance of buying an apartment with an inflated asking price.

4. Buyer’s agents will protect clients from pushy sellers and aggressive brokers.

This point speaks for itself, but no one wants to be nudged into making an offer. Let a buyer’s agent handle other brokers and sellers.

5. Buyer’s agents will negotiate.

Negotiating is never fun, and a good buyer’s agent will negotiate on a client’s behalf. Bear in mind, an exclusive buyer’s agent works only with buyers and does not list properties, so a client is apt to experience a more loyal and confidential relationship when working with an exclusive buyer’s agent. By the same token, a buyer’s agent performs a comparable market analysis to estimate the fair market value and then often recommends the offer price to submit to start the negotiating process.

6. Buyer’s agents should have established relationships within the NYC market.

Not only will they have friends and colleagues who are real estate agents, but they’ll have a network of mortgage brokers, closing attorneys, inspectors, architects, interior designers, contractors, and other professionals to recommend as needed.

7. Buyer’s agents are on the real estate front lines, and in touch with the latest trends.

Having an exclusive buyer’s agent enables clients to experience the market in real time and capitalize on specific areas of town that have greater potential. On the flip side, if an area of town has declining property values, then the agent’s job is to advise the client that a certain apartment or building wouldn’t be a smart purchase. What’s more, agents often discover crucial information ahead of top media outlets.

8. Working with a buyer’s agent or not, a buyer will still pay the commission based on REBNY’s standard rates.

Based on the Real Estate Board of New York, the sales commission is five or six percent. Either the seller pays the full commission to the listing agent, or the commission is split 50/50 between the buyer’s agent and the broker who listed the property. Regardless of the listing price, legally, that amount of commission will get paid, so it’s probably a wise idea to take advantage of an agent’s expertise and reap the benefits mentioned above.

Learn more about Buyer Agents:

Do Buyers Need a New York City Real Estate Agent?

Despite the Popularity of the Internet, More Homebuyers are Using Real Estate Agents

Questions to Ask Before Hiring Your Buyer Agent

 



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Brooklyn: Is It True to Hype?

The Hype

Brooklyn real estate is in the news almost every day. It’s in, it’s out, it’s overpriced, it’s cool, it’s overrated, it’s the place to be…

Then there are the trend pieces coming out of the New York Times, and other outlets, on a regular basis. For example, in 2010, the NYT called Bushwick the coolest pace on Earth, but even with ongoing – and ever-increasing – interest in the neighborhood, in 2016 the NYT declared Bushwick officially over. Bushwick comes to mind because of its meteoric rise from the apex of gang and drug activity to the most desirable ­– and written about ­– spot in Brooklyn.

Then there was the story from late 2016 that Brooklyn is the most unaffordable place to live in the U.S.

The attitudes toward Brooklyn, from the vantage point of Manhattan, change daily, but the borough weathers each trend-storm just like the tough Brooklynite it is. Meanwhile, a wide variety of buyers and renters alike continue to explore, fall in love with and settle in Brooklyn.

 

Image from Pexels.com

 

The History

Brooklyn is not a monolith. NYC’s largest borough, Brooklyn is comprised of individual neighborhoods, each with unique characteristics and demographics.

When the Dutch settled Brooklyn (then known as Breuckelen) in 1636, the original six towns were Bushwick, Brooklyn, Flatlands, Gravesend, New Utrecht, and Flatbush. These specific “towns” have fanned out to include adjacent neighborhoods with new names. For example, Bushwick often encompasses parts of Bed-Stuy and East Williamsburg while Flatbush has grown to include Prospect Lefferts Gardens, Kensington, and Ditmas Park, where gorgeous Victorian mansions regally reign.

HuffPo published a piece exploring some of Brooklyn’s most popular neighborhoods intended for visitors. But, if you’re investigating Brooklyn real estate, use it as a primer.

 

   

Image from Pexels.com

 

The Hip

Basically, all of Brooklyn’s neighborhoods are a mix of longtime residents – those who have lived there for generations raising families, operating, or working at, local businesses, and claiming their native Brooklynite status – and folks who’ve moved there in the last 20 or so years. For many longtime residents, English is not their first language and their sense of family and community has been thrown into chaos by the influx of newer residents. Newer additions to Brooklyn neighborhoods tend to have higher incomes and be entrepreneurs, artists, or business people. Some newbies own their own homes, including apartment buildings, condos, or shares in a co-op while others prefer to rent.

The Happenings

Prospect Park, designed by Vaux and Olmstead, the pair who designed Central Park, is a beautiful and luxurious green space that plays host to musical and other events under the banner of Celebrate Brooklyn! Near to Prospect Park is the Brooklyn Botanic Garden and Brooklyn Museum. These two institutions are extraordinary cultural outposts. The Brooklyn Museum, a world-class icon, includes local conversations about gentrification in its programming and hosts outstanding art exhibitions. The Brooklyn Botanic Garden is well known for its annual spring Cherry Blossom Festival as well as its spacious grounds.

With the influx of residents with expendable income, the food and drink scenes in many Brooklyn neighborhoods have been dramatically upgraded. New little (and big) spots are popping up all over Brooklyn. New York Eater has a guide to the latest, greatest restaurants while Foursquare provides a list of the best coffee shops in the borough.

Are you the Type?

Whether you can live in Brooklyn depends on various factors including the commute to Manhattan for work or a Broadway show; the cost of living (including real estate) and quality of life, and your tolerance for “up-and-coming” status that may last for decades, such as in Bedford-Stuyvesant, which has been “up and coming” for about 20 years.

Other neighborhoods, such as Park Slope and Williamsburg, have already been completely redeveloped, and others, such as Greenpoint, Crown Heights, and parts of Flatbush (Kensington, Ditmas Park), have been on the rise in recent years.

Brooklyn is very culturally diverse, it’s safer than ever, some of the best public schools in NYC are in Brooklyn, and the borough is very family-friendly and community-oriented. Take a ride over one of the three Bridges to Brooklyn to find out if it’s the place for you.

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1031 Pushing Capital Gains Taxes Down the Road

We recently discussed how depreciation serves as a non-cash deduction, which delays income taxes due. However, there is more good news for those that have sold an investment property for a gain. The IRS allows for certain property exchanges that can kick tax payments even further down the road.

What is the exchange?

You can exchange your property for a similar property. This is called a Section 1031 Exchange, or simply a 1031 exchange. While you typically have to pay a capital gains tax when you sell your investment property, this allows you to postpone it. It is particularly useful for real estate since the provision cannot be used for certain other investments such as stocks and bonds.

 

Image by Marcela / Flickr

 

There are some conditions, of course. First, you have to use the proceeds to invest in a similar property. This seems tricky, but you should not get hung up on the terminology which can prevent you from doing a 1031 exchange. The IRS takes a wide view on the subject, generally considering real property to be similar, as long as both are in the United States. Those restricting real estate investment to New York City should be fine.

The IRS will also want to see that you have not sold the property and invested in another one. This would trigger a taxable event. If you simply switch one property for another, that would qualify. But, this can get more complex. You can defer the exchange, providing you meet the IRS requirements. For instance, the agency will want to see that the entire transaction is linked and cannot stand on its own. You also have 45 days from when you sell the property to designate (in writing) the replacement property you are going to buy. You also have to close on the new property within six months.

Keep in mind; the exchange only applies to investment property. You cannot use the 1031 exchange rule on your personal home, or even your secondary/vacation property.

Real savings

You feel pretty good after selling your investment property for a $1 million gain. However, there is a top long-term capital gains rate of 20% if you held it for more than one year. In 2016, this kicks in if you are in the 39.6% tax bracket, which means your income was $470,701 or above for those married and filing jointly. After you figure out how much you owe in taxes, you might feel a little glum. If you don’t do the exchange, you owe $200,000 in capital gains taxes. But, that is not all. Since you took advantage of depreciation, the IRS expects this amount to be recaptured. Suppose you have expensed $100,000 in depreciation over the years. Uncle Sam expects you to pay 25% of this amount, or $25,000 ($100,000 multiplied by 25%). This works out to a tax bill of $225,000.

You decide to engage in a 1031 exchange. You find a suitable property within 45 days and close within six months. Assuming this is a delayed exchange, you need an intermediary to hold the cash from the sale.

If you receive any cash (i.e. after you swap properties, the one you gave away was worth more, so you get cash), this part of the transaction is taxed immediately as a capital gain. To avoid this, buy a property that is worth at least as much as your old one.

Concluding thoughts

This was a simple example. However, you also need to consider your mortgage. If you had a $500,000 mortgage, but the new mortgage is $400,000, that $100,000 is considered a gain. To avoid this, buy an apartment worth at least as much as your old one and carry the same or greater mortgage.

There are also reverse exchanges. This is where you buy the replacement property before “selling” yours. However, these are not practical since you buy the property with all-cash, but banks may be reluctant to lend.

 

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For Sale Horror Tales: Fifty Shades of Grey meets the Big Lebowski

Let’s just start out by saying not everyone agrees on what is appropriate and some simply do not care. However, that said, whether you care or not, it’s worthy to give it some thought on how one might react with entering an apartment in a particular scenario. It is time to face it: the more people your home appeals to, the better price it will likely sell for or, in some cases, just sell. Unless you want your apartment looking like a “going out of business” sale, taking care of some of the items below just might find you a Buyer.

1. Sex Toys are Us

“Fifty Shades of Grey” displayed in the bedroom can satisfy your taste for exhibitionism and reveal your passionate soul, but you might want to reconsider. Is it necessary to leave your furry handcuffs or feathers on the bedside table and something that resembles of a vibrating device for a neck message? If you are selling a two bedroom, there is a good chance potential buyers with a young child might be coming through. Needless to say, sometimes less is more.

2. Animal House

We love pets, but sometimes it can be a bit much, like three cockatoos, even though they say “Hello!” all together at the same time and are beyond cute. Coupled with a cat you essentially have a “Tom and Jerry” situation. No doubt, unique, but, if possible, better to avoid. How about not leaving the cat or dog food out, or, maybe, just giving the litter a cleaning? Always appreciated!

  

Image by Dave Womach / Flickr

 

3. Odors

Light a match, open a window or if you have to, Febreze for the life of g-d. Candles are readily available and elevate your open house. Perhaps, if you want to take it to another level, most of us love chocolate chip cookies baked fresh.

4. Dutch oven

Whether you have taken on the role of the Big Lebowski or decided to rent your place to marijuana enthusiasts, keep in mind that smoke sticks to everything in the apartment, and can be overpowering unless you just rolled one before shopping for a home.

 

 

5. Hoarders

Storage is necessary for New York City, and everyone needs more, but turning your living and others rooms into a storage facility usually is not an excellent idea. Space is equally important as storage, so finding a balance might be a great place to start.

6. The Stalker

Maybe you have finished your apartment to the nines, and it’s worthy of a feature in the Architectural Digest, but please please let your agent do his/her job with a little space. Having an owner sitting in a rocking chair or following you around the apartment is creepy, and a great way to alienate a potential buyer.

7. Dirty

All sellers try to maximize their capital upside, but this should not be at the expense of having your place cleaned before opening your doors to the market. There is nothing worse than walking into a dirty bathroom. How about giving the dirty bathroom mat a wash. It doesn’t cost much and cleanliness always goes a long way. Great Green Cleaning is a company we recommend, not the cheapest but the best.

8. Master Chef

Just because you love food doesn’t mean you can cook. Many are finding out the hard way by sending photos of dishes to Gordon Ramsey on Twitter only to get roasted on how shocking the dish may look. Many of us want to be Anthony Bourdain or the next “Master Chef” but in reality – were better off` keeping our day jobs. Keep this in mind, before storing your food experiment in a clear container in the fridge instead of a plastic garbage bag. Many buyers like to open a refrigerator.

 

Is your mom upset with you ? What do you call that ? https://t.co/JJ5qzQo2pO

— Gordon Ramsay (@GordonRamsay) March 4, 2017

 

9. Bad JuJu

Don’t stuff your pets and animals, taxidermy does not sit well in an apartment. Let go, and let them RIP. Religious symbolism can be a bit much for those of another faith. Antique furniture can also be heavy and cause negative energy, researching on how to rid your home of bad JuJu is recommend.

Have you been looking for a home and walked in on any surprises? Share your stories below.

 

Image by Jenna Bauer / Flickr

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Grounds for Eviction of Rent Controlled or Stabilized Tenants in New York

There are many online articles that list the best states in the US for landlords. While states like Texas and Arizona almost always make these Top 10 lists, one state that you won’t ever see listed is New York.

The reason New York isn’t considered a landlord friendly state is because there are multiple laws in place that provide tenants with numerous rights. In fact, there are countless examples of it taking 6+ months or even years to evict a tenant who has stopped paying rent.

Since there are numerous legal issues that can affect both tenants and landlords, one common area of interest is in regards to the eviction of tenants who are in a rent controlled or rent stabilized unit. Because many people are interested in learning more about this issue, we thought it would be helpful to cover it in detail.

 

 

Understanding the Basics of Rent Controlled and Rent Stabilized Units

Before we can fully explore the grounds for eviction of rent controlled or rent stabilized tenants, it’s helpful to understand exactly what these terms mean. While both involve rent regulation, the specific regulations are different.

Although it seems like rent controlled apartments get the most media attention, rent stabilized apartments are actually far more common. According to data from the 2011 NYC Housing and Vacancy Survey, there were around 1 million rent-stabilized apartments. In comparison, there was less than 40,000 rent controlled apartments in New York City.

For an apartment to be rent controlled, it must be in a building that was built before February of 1947. The other main criteria for rent controlled apartments is that the tenant or a tenant’s lawful successor has to have been continuously living in the apartment since July 1st of 1971. It’s worth noting that in the case of an apartment that’s located in a one or two family home, continuous occupancy must go all the way back to April 1st of 1953.

The definition of a rent stabilized unit is one that’s in a building with at least six units and was built between 2/1/47 and 1/1/74. In some cases, rent-stabilized apartments can be found in post-1974 buildings as a result of special tax benefits. Rent stabilization can also occur when a previously rent-controlled apartment becomes vacant.

While rent stabilization has had numerous effects since it was instituted in 1969, the two main objectives of this program are to prevent sharp rent increases and to provide tenants with the right to renew their leases.

How Does Rent Control and Stabilization Effect Evictions?

Now that we’ve covered both rent control and rent stabilization, it’s time to take a look at how these issues impact evictions. In the state of New York, an eviction requires going through a court proceeding and obtaining a judgment of possession. If this judgment is granted by the court, the eviction can be carried out by a constable, marshal or sheriff.

 

 

With regards to rent control and stabilization evictions, there are situations where DHCR approval must be granted before taking the eviction to court. However, there are six different scenarios in which a landlord can begin the eviction proceedings without needing to seek DHCR approval. Those scenarios are:

– Non-payment of rent
– Failure to cure a violation of a substantial obligation of the tenancy
– Damaging the housing accommodation
– Refusing the owner access to make needed repairs
– Occupancy of the housing accommodation by the tenant is illegal because of the requirements of law, and the landlord is subject to civil or criminal penalties therefore, or both
– The tenant is using or permitting such housing accommodation to be used for an immoral or illegal purpose

 

There are also three scenarios in which a landlord can refuse to renew a lease for a rent controlled or stabilized apartment without needing to get DHCR approval.

Those scenarios are:

– Occupancy by the owner or member of the owner’s immediate family member for personal use
– Recovery of the unit by a not for profit institution for use in connection with its charitable or educational purposes
– The tenant is not using the unit as a primary residence

 

To clarify, these scenarios do not guarantee that a landlord will be successful in evicting a tenant or being able to not renew their lease. All it means is that court proceedings can be brought forward without first needing to go through DHCR.

Regarding situations that always require DHCR approval, the four worth noting are:

– Withdrawal from the rental market
– Demolition
– The elimination of unsafe housing to either rehabilitate or demolish it pursuant to state or federal laws
– Conversion to cooperative or condominium ownership

 

As previously mentioned, rent control or stabilized tenants are protected from arbitrary rent increases by landlords. These tenants also have the right to renewal leases. And in the case of tenants who are senior citizens (at least 62) or disabled, they cannot be evicted on the grounds of owner occupancy.

 

 

Taking Over a Lease and Deregulation

In the case of a tenant passing away, protection from eviction may be claimed by a traditional immediate family member, a nontraditional family member and/or adult lifetime partner. In any of these scenarios, the individual eligible for succession has the burden of proof to show that they do indeed have succession rights.

For an apartment that’s currently rent controlled or stabilized, there are two main ways for it to become deregulated. The first is if the owner or an immediate family member of the owner has a compelling need to make the apartment their primary residence. The other possibility is through luxury decontrol. This type of deregulation can take the form of either high rent-high income deregulation, or high rent-vacancy deregulation. With either option, the apartment must meet very precise guidelines.

The Bottom Line for Rent Controlled and Stabilized Apartments

Although tenants in this situation need to uphold their end of the deal, being in a rent controlled or stabilized apartment does provide additional legal protections. As a result of those protections, it can take longer and cost more for a landlord to evict someone in this type of apartment than the already long process that’s involved in any New York City eviction.

If you have any other questions about the often-confusing Rent Controlled or Stabilized laws we recommend consulting an attorney who specializes in this field.

Relevant Post:

Everything You Need to Know About Rent Regulation

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