“For the number you’re asking, these apartments will have to be empty. I’m not going to bother the tenants so I can renovate their apartments.”
I’m on the rooftop of a three family, brick building, in Cypress Hills, Queens, with the current owner of the building, and an investor who hopes to purchase it. It’s 2020, right before the Pandemic is about to hit.
But it seems that the two sides aren’t aligned — they’re about $300,000 apart on a potential sale price. If the building was empty, then the seller might be able to achieve the price he is asking. The building’s common areas — foyer, hallways — also need significant renovations.
Both the current owner and the new owner don’t want to bother the tenants to see if they would be open to leaving so the new owner can renovate the apartments. I don’t blame them.
But for the price that the current owner is looking to achieve, the units will need upgrades so higher rents can be attained and justify the asking amount. The apartments will need to be modernized — the layouts may need to be rearranged, and they’ll need laundry, dishwashers and central air installed.
All across New York City, landlords are looking for buildings that have upside, that are in need of renovations so they can increase the rent roll. An old, currently uninhabitable building is an attractive asset — if it’s vacant. If there’s any amount of tenants living in the building, it will affect the price of the building.
Also, the prospect of good cause eviction being enacted in New York City is still hovering around in Albany. There’s a good article explaining good cause eviction in the New York Times, which explains that “Good cause eviction would prohibit [landlords] from ending a tenancy, except in cases of lease violations.” If good cause is enacted, tenants living in market rate apartments could only have their rent increased by a maximum of 3%. The idea of good cause coming to reality is frightening to investors who might look to buy market-rate tenanted buildings in need of improvements.
So if you’re someone that is maybe looking to sell your property, and you have a tenant move out — leave it empty! Do not rent that apartment if you’re looking to sell in the coming months or a year.
The building in Cypress Hills has yet to sell.