Updated 07/02/2011 03:47 PM
How Property Owners Can Prepare For Summer's Hot Rental Market
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As the rental market heats up this summer, property owners who want to rent instead of selling their space should make sure they are following all city rules and regulations. NY1's Real Estate reporter Jill Urban filed the following report.
The local rental market is getting so hot that many would-be sellers are deciding to put off the sale and are renting out their homes instead. Ron Gitter, a real estate attorney and the founder of CoopAndCondo.com, has seen the trend grow.
"At the moment, there is a very low rental vacancy rate, which drives the prices of rentals up," says Gitter. "So it’s a very advantageous time, if you do own an apartment and you don’t have to live in it, it’s a great time to rent an apartment."
Gitter says there is a lot a property owner should know before renting an apartment. First, understand the rules of the particular building. Most buildings have specific guidelines and some ban it altogether. Many buildings also charge fees to the tenant and the owner as part of the renting process.
After finding out the limits and the costs in advance, then find a qualified tenant.
"First, check their income level. A good test is 45 times rent. If their income is equal to or exceeds that amount, you probably have a financially qualified tenant," says Gitter. "You should also check their credit report, you should also verify employment. And finally, you should check the status with their current landlord."
Before handing over the key, protect the asset with enough insurance, and make sure the policy allows for a tenant. That tenant should also have a renter’s policy.
Some may want to rent an apartment during a summer vacation, or a period shorter than one month. Yet most buildings will not allow it, and it is also illegal in New York.
"Consumers should be cautious because leases for less than 30 days are illegal and in many cases the owner of the apartment doesn’t have the right to sublet in the first place," says Gitter. "So the proposed tenant has to verify that they actually have the right to occupy the apartment."
The law, however, does not apply to single-family homes.
In today’s market, when renters are paying the broker’s fee, Gitter says it may be a good idea to hire a qualified broker who can help make sure everything about the rental is above board.