How Do the Landlords of Rent-Regulated Apartments Make Money?

The conventional wisdom is that being a landlord is an easy source of passive income, from garden variety personal finance advice that encourages you to rent out your old house when you move into a new one to aspirational entrepreneurship content about building a real estate empire.  Whether you are responsible for one apartment or hundreds of them, being a landlord is a lot of work.  While homeownership is also more expensive and time-consuming than it appears, at least you have no one to be mad at but yourself, rental situations please no one, and no matter your role in the situation, it seems like everyone blames you.  Disputes between landlords and tenants over whose responsibility it is to pay for repairs are a constant source of hard feelings.  Tenants pay more money than they can afford for rent, and landlords spend it all repairing damage that the tenants caused, so at the end, everyone feels broke.  The situation is even more frustrating in rent regulated units.  Tenants still feel that rents are unaffordable, and landlords resent getting so little revenue that they barely break even.  It is possible to have a successful career as a landlord in rent-regulated housing, but it is best if you do so with the help of a Bronx real estate attorney.

The City Provides Incentives for the Landlords of Affordable Housing Units, but Landlords Must Follow the Rules

The category of rent-regulated apartments includes both rent-controlled and rent-stabilized units.  A rent-controlled unit is one where the rent stays the same no matter how long the tenant stays; if the original tenant dies, a successor tenant, usually a family member of the original tenant, may rent the apartment for the same price.  In a rent-stabilized apartment, the landlords may increase rents, but not as steeply as in non-rent-regulated units.  New York City’s five boroughs are some to over 16,000 rent-controlled units and over 96,000 rent-stabilized units.

Although the city offers tax incentives to landlords for providing affordable housing, the money is still tight when it comes to making repairs.  Case in point, the city’s lawsuit against landlord Daniel Ohebshalom resulted in a settlement of over $4 million after Ohebshalom broke many rules with regard to the hundreds of rent-regulated units he owns.  These violations include failure to perform maintenance on rent-regulated units and illegally converting rent-regulated apartments into short-term rentals.

To avoid having to pay costly penalties, landlords should use the resources available to them to help them pay for maintenance in rent-regulated buildings.  For example, they should contact the Rent Stabilization Association, the Community Housing Improvement Project (CHIP), or the Small Property Owners of New York (SPONY).

Schedule a Confidential Consultation With a Bronx Real Estate Attorney

A real estate lawyer can help you navigate the complexities of renting out rent-regulated apartments and other affordable housing properties and keeping them properly maintained in compliance with the law.  Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.

Sources:

rentguidelinesboard.cityofnewyork.us/resources/faqs/owner-landlord-faq/

bronx.com/new-york-city-has-won-over-4-million-from-lawsuits-against-one-of-its-worst-landlords/