Luring Affluent Renters in Manhattan

[Pale Blue Dot]

Source: New York Times

ONE month’s free rent. Two months’ free rent. No security deposit.

How about a year’s worth of storage at Manhattan Mini Storage or an appointment at a doggie day spa for Rover on moving day?

As the rental market in Manhattan has softened in recent months, these are some of the incentives that owners of high-end buildings are offering to lure tenants. The more elaborate enticements tend to be in new buildings that landlords are trying to fill as quickly as possible, but even owners of some established buildings are offering incentives to avoid having apartments go vacant.

“We definitely have seen a shift in the dynamic of the marketplace,” said David J. Wine, a vice chairman at the Related Companies, which owns and manages about 5,000 rental units in New York City. “The frenzy of a year or two ago has abated, and we’re seeing renters be a lot more thoughtful in their rental decisions.”

Landlords have adjusted accordingly.

“A lot of landlords were getting ready to increase rents for the busy season, but they’re finding that those projected rents aren’t attainable,” said Daniel Baum, the chief operating officer at the Real Estate Group New York, a Manhattan brokerage. “No one anticipated having problems on the rental side, and it’s definitely forcing property owners to take a second look at marketing and to rethink their pricing.”

Read more: http://www.nytimes.com/2008/06/29/realestate/29cov.html?_r=1&oref=slogin

[DaveJ]

1. Maybe people are tired of being scammed

Paying someone else's mortgage and having nothing to show for it is a total ripoff. How about a 'rent to own'? That sounds like it would be an incentive people might like. Smacks of something unheard of in this economy lately -- a little fairness.

[Robb]

2. There are still advantages to renting

...depending on the situation.

- No down payment to produce (although first/last/deposit is often significant);
- No big maintenance responsibilities, that's the owner's gig;
- No investment in a market that may still be falling.

Even a one-year lease offers more flexibility than a 30-year mortgage, especially in a market where it's hard to sell. If you know your job is gonna move you at some point soon, it's not a bad way to go. :shrug:

[DaveJ]

3. I think this may be the greatest strawman argument in the history of civilization

Renters pay for all that convenience. Specifically, the first and second point they certainly pay in the price of rent. Regarding the 3rd point, if the market fails the most important thing to have will be a home, which is why land owners do well in good times, but especially in bad times. The reality is, historically, that property owners are the 'haves' and the rest of us are the 'have nots', and this is done with the assumption that most people are too incompetent to manage their own property, and need landlords to keep an eye on them. Now, in the rare instance that someone is rich and owns property and has rentals on the side, that's entirely different, something rich people do.

[truthisfreedom]

4. But the real numbers are much more painful. I put down $30K on a second property costing $289K

three years ago, during the peak price point in Minnesota. Monthly payments are $2200, taxes are $4.5K, and after $74,800 in payments PLUS the $30K I put down PLUS the $13.5K I've paid in taxes, I've got $2k of the principal paid down and I can't get more than $1,200 per month in rental for it. Granted, I was able to use it until last November as an office for my business, which worked out exceptionally well, but in the last 6 months I've been weighing my options and it will cost me $30K just to get rid of it.

Owning property that was purchased at peak value is a total financial pain in the ass. I wish I had rented, honestly. I really do. I would be out $56K right now instead of $148K to be free of this albatross.

[rox63]

11. I bought a condo because I was sick of my rent going up every year

I figured that I would at least know what to expect each month financially. But I bought 3 years ago, at the height of the RE bubble. These days, I could buy a much bigger, nicer place for what I paid for the one I have. I hope that property values will recover before I try to sell this place in a couple of years.

[conspirator]

5. Of course owning property is good. That's why it's called REAL estate.

I am in the "have nots" group, and for me, buying is not an option yet.
Simply because I don't have the money and I don't want get a mortgage and become slave of the bank.
If you get a loan to buy you will not have to rent property, but you are renting the money the bank lent you,
and you will end up paying 2 properties.
The only case I would get a loan it would be to invest in a business. Buying to let can also be a business, but in order to have a quick return of your investment you have to know a lot about the real estate market. It seems that buying old properties and recovering them to sell or to let is the quickest way of making money in real estate.

[awoke_in_2003]

8. "and become slave of the bank"

Well, unless you live in a tent on public land somewhere, you are going to be a slave to someone. You can make it easier, though. I got a 15 year mortgage- the difference between that and 30 was about $350 a month and savings over the span of the loan of around $200 k. I make two extra payments a year, applied to principle. My mortgage will be done after 8 years (just two years from now:) )

[conspirator]

12. You can't compare house prices in US and UK. With $200k in London you would buy

a miscroscopic studio.
Being single I can share a flat or live in mum's house, while I save money to start a business.
I feel better investing my money in a business than in an house.

[awoke_in_2003]

24. Sorry, notice you were in UK. nt

[conspirator]

29. My fault. Being in Europe I shouldn't discuss housing in an american website

2 different realities.

[awoke_in_2003]

36. Is the price of a house

really bad over there? I know that here in Fort Worth, TX, you can get a nice 1800 to 2100 square feet (I think that is 195 square meter)house for roughly 3 times your annual salary.

[stillcool]

6. From what I understand 'property owners'

is a misnomer as well. That when you pay a mortgage you are not a property owner, and are highly susceptible to a reversal of fortune. The 'haves' do not rely on a paycheck to live, but rely on the interest accrued from their investments. Plus through marriages and mergers their incestuous relationships guarantee that their widely invested and diverse ownerships can afford to take a hit from one or another failures in a particular industry.

[Spouting Horn]

19. Being an "owner", at least in Florida

means you have one less landlord to pay. This state has sky high property taxes.

I guess if you throw in the mortgage, then you do have 2 landlords, but still "own."

Owning in a big building means a large monthly "maintenance" fee. My wife and I have a place in Chicago that we rent for $1,250 per month...the maintenance fees in the building are $650. Condo's start at 225-275. Do the math. For us, it would be stupid to buy.

[bean fidhleir]

40. And that describes perfectly why the "owner class" can take us to the cleaners no matter whether the

economic pump is going up or down.

[ldf]

7. hmmm...

we just moved, in manhattan.

i am not an affluent renter (around 85K), although i am making more than I ever dreamed (i'm from the south, we had fewer unions and lower expectations).

the "soft" market may be affecting the huge, brand new, glass highrises, but it is NOT affecting what people of my income can afford.

we managed to find a "three bedroom", that was really a two bedroom, living and dining room. the dining room had NO closets, and three doors leading into it, but it was classifed as a bedroom. bedrooms mean $$$.

1800 per month. and that was a lucky break, because most that we looked at for that price were jokes (bedrooms barely large enough for a twin bed and NO furniture, 4th to 6th floor walkups). several agents assured us we could only find what we were looking for in the 2100/2500 range. i could barely qualify for it, but certainly couldn't afford it (qualifications = 40 x monthly rent).

and we did not look south of 125th street, so that means we were looking in "little dominican republic" (the very third world area we were trying to get OUT of), "little puerto rico" and upper harlem.

the move got us 7 blocks further south, from 178 street to 170 street. we moved from the third world to the second world, and are paying 1800.

but it is an improvement.

all this to say that the people who don't need the breaks, are getting them. there are tons of brand new luxury high rises, sitting empty.

what is weird about manhattan is there are tons of "projects", packed to the brim, tons of expensive smaller apartments in trendy neighborhoods, and tons of upscale, luxury apartments for the super rich.

meanwhile, there is nothing for the "middle class" (and for me this is a redefinition of middle class, since i though people making what i make were rich...). we have to be content to live in fringe neighborhoods on the edge of the second and third worlds.

edit to put "-" around "projects"...

[awoke_in_2003]

9. $1800 a month?

Good lord, that city is expensive. That is $400 a month higher than my MORTGAGE payment on 2100 sqare foot house in suburbia.

[billyoc]

13. That's what I pay for a studio apartment in midtown.

Yes, ZERO bedrooms. :hi:

[awoke_in_2003]

15. I cannot believe

how expensive that city is. No way I could do it (although I can't wait until I can afford a visit to your city. Haven't had real pizza or deli food since moving here).

[readmoreoften]

27. According to businessweek $79K in NY is = $37K national average.

My apartment 250 sf no kitchen went for $2000 when I left in 2006
I bought a house in Austin 4 bdrms on over 1/3 an acre of land for way less than I used to pay including property taxes, insurance, and life insurance. I also rent out 2 rooms.

You should check out that Forbes article from the other day (sorry no link). It compared salaries. NYC was the worst place to live in America for salary equivalence. Texas cities were the best. Also homes going up in value. 30% of homes in Austin were purchased by Californians from LA and San Fran relocating.

Life is easy here. I will never move back to the east coast!!!

http://images.businessweek.com/ss/08/06/0613_best_cities_job/index_01.htm

For example: Dental Hygenist pays:

Dallas: 75,000 ($85,000)
New York $79,200 ($37,400)

[TBF]

23. That's cheap for NY. We paid that for a luxury garden apartment

in Houston before we got our house. Of course we had 1500 sq ft - that studio for $1800 in NYC is probably about 500 sq ft at best.

[DBoon]

28. That's what a one bedroom apt in Los Angeles costs now

in Hollywood and surrounding central city areas - of course on the West side rents are much higher

I'm amazed that people pay as much for a one bedroom apartment as we pay in mortgage for a 3 bedroom house in the same neighborhood

[Fredda Weinberg]

10. Come to one of the other boros ... we'll be fine. Honestly, what did

you expect in "the city" for 85k?

[galledgoblin]

20. seriously

Manhattan is nice, but nicer if you commute in and out from the rest of the city.

[Mz Pip]

14. $1800 is terrific

My son had a 4th floor walkup by Madison Square Garden that had the square footage of a postage stamp. He paid nearly $1700. Now he has a one bedroom with his girlfriend at 69th and Broadway for $2700. They looked for months for this. The neighborhood is good but jeez that is just nutso rent.

Then there are the brokers fees. 15% of the total annual rent. That's insane.

[Sen. Walter Sobchak]

16. how does one justify that?

I am just a weirdo from California who would give up most things in life before my yard and riding lawnmower, but what is the motivation?

I know people who make $5,000,000 a year and work in Manhatten, but even they can't justify the expense of living there.

[Mz Pip]

18. I guess not having a car

and the expense of one sort of offsets some of it. A subway pass for the entire month is about $100, so there's no need to pay for car payments, car insurance, car parking (which in NYC is about as expensive as rent. It's an easy commute on the subway to work.

[Catchawave]

17. Sounds better than my daughter's deal in the Village...

450 sq ft for $2700.

She's since moved to Brooklyn. Loves it!

[nodehopper]

22. very third world area, huh?

Above 125th street is NOT the "third world" (or "developing nations" as is the proper term now). Maybe you don't mean it that way, but your post seriously sounds like the people who are gentrifying ethnic neighborhoods in new york while complaining about the communities they make no effort to make a connection with.

[Starbucks Anarchist]

26. He was probably expecting the Manhattan from the movies and TV.

You know, the ones that inexplicably don't feature anybody darker than beige.

[ldf]

30. please

don't try to pass your racist shit off on me.

you don't know me, nor the experiences i have had in "hamilton heights" and "washington heights".

[Starbucks Anarchist]

31. Oh, please yourself.

Referring to Dominicans as "third world" sounds pretty damn racist on its face.

[nodehopper]

34. seriously.

[nodehopper]

33. do you know that scene from "Brother From Another Planet"?

that takes place at 125th street?

[Starbucks Anarchist]

35. Haven't seen it.

What happens?

[nodehopper]

37. an excellent movie by an excellent director (John Sayles)

Card Trickster: I have another magic trick for you. Wanna see me make all the white people disappear?

Subway Public Address Announcer: Fifty-Ninth Street, Columbus Circle; 125th Street next. This an Uptown A Express going to 207. Change for the AA local across the platform, the D, or the upper level, change for the number 1 Broadway trains.

all white people get up and leave the train.

Card Trickster: See, what'd I tell ya?

Subway Public Address Announcer: Uptown A, 125th street, next.

[Starbucks Anarchist]

25. "Third world"?

Why don't you just move to the Upper West Side so you won't have to be around so many icky minorities? :sarcasm: :puke:

[galledgoblin]

21. those of you comparing Manhattan rent to suburbia

really shouldn't make that comparison, at least not without factoring in your other expenses to live out in the boonies. automobile expenses alone set you back...

but all that aside, you're talking about MANHATTAN. how much is the rent, or, hell, for that matter, how much does the average house cost in the nearest city? nearest town?

[jzodda]

32. Manhattan sucks

The price to live there and even to work there (commute) just is awful. You can do far better cost of living wise if you can get a job and live in White Plains or even Yonkers, both large cities right near NY. White Plains is especially nice. It has night life, its trendy and far cheaper then Manhattan.

[fascisthunter]

38. Those are Not "Water Bugs". They are Called Cockroaches

some will know exactly what I'm talking others won't.

When living in Astoria, there was quite a bit of misinformation regarding coackroaches. Supposedly many living there thought they were water bugs and so I helped a neighbor by showing him online what a water bug really looked like, and what a North American Cockroach looks like.

His reaction, I will never forget.... he was, let's say... repulsed, knowing they are everywhere....

He wasn't the only person in that neighborhood that seemed to believe the same thing he did.

[MadHound]

39. Makes me happy that I live in the country in the Midwest

I get a nice 2700 sq ft. house, twenty acres of mixed cleared land, pond and woods, and three outbuildings along with lots of wild life and most importantly peace and quiet in which to reflect and enjoy the majesty and beauty of nature, all for about half the price of renting some of these places.

Yes, we have other expenses that one doesn't have to worry about in Manhattan, the cost of running and maintaining a riding lawn mower, vehicles to transport people and material, but the fact of the matter is it's still cheaper to live in the country than the city, and my land is slowly but surely paying for itself as I can grow food for myself and for retail sale. I can also put up my wind turbine, put in my wood stove, and can become nearly self sufficient.

Sure, NYC is a fun place to visit, but I certainly wouldn't want to live there. Too expensive, too noisy, the air is foul, etc. etc. But hey, apparently many folks like to spend their lives in such a place, though for the life of me I can't figure out why.

[Peregrine Took]

41. We were ripped off 2 years ago in Chicago by an apt rental finder service.

I was sick at the time and we were really stressed out and in a hurry to find an apt as we had sold our condo and the buyer wanted to move in asap.

We signed a form of intent to rent (not a lease) a nearby condo and gave them a $2,000.00 first month to hold the apt thru the approval process, reference checking, etc.

In the meantime the condo owner (it was a condo) called us taking back the promises the rental service had made about making improvements, painting, new carpet, etc. That was bad enough but the next day we were out for a walk and the building was on our route to the lakefront. A guy (first floor) was sitting on the stoop so we stopped and asked him what it was like to live there.

He said the place was horrible, no heat, terrible landlord, dirty, etc. We had deduced the landlord was shite after talking to her but this sealed the deal.

We contacted the agency for our money back but they refused to give it back - had a "take us to court" attitude.

As we were in a bad spot and I was ill at the time we just let it go but it always sticks in my craw.