Month: April 2021

Categories
Rentals

How to Sublease an Apartment in NYC

For a lot of people living in New York, subleasing was their first housing option. Short-term rental housing is a popular option in this city. If you will be away for a couple of months or more, subletting your apartment might be a great way to have someone looking after it while you are away while making some extra money.

Before listing your home for potential sub-lessees, there are a few considerations you need to make. Read on to learn how to sublease a property in New York City.

Building Rules on Subletting Your Apartment (Post Covid)

Although you have the right to sublet your apartment, you will need approval from your landlord. Approval is gotten by sending out a certified mail with a return- receipt requested, to your landlord once you find a lessee. This request must carry your personal information, that of the potential lessee, the reason for the sublease, intention to return to the unit, a copy of the sublet terms, and any other details relating to the sublease agreement.

Subletting an apartment is a simple process in New York City but you will also have to follow some simple rules like the regular heating laws as landlords.

30 Days Reception of Proposal

Your landlord is required to reply within 30 days of reception of the proposal. In case of denial of consent to sublease, the landlord must put forward valuable arguments as to reasons for refusal.

When you have a roommate, they must agree with your decision. It must be stated in writing as part of the subletting agreement.

Getting Your Apartment Ready to Sublease.

Make sure you leave the apartment clean for the new user. Take away all your valuables and fragile objects. You need to make sure all the amenities mentioned in the agreement are available before vacating the premise.

Always plan for emergencies and let someone else have a spare key to take care of unforeseen issues while you are away. Also, leave your contact information for your tenant to be able to reach you in case of any inquiry.

Categories
Buying Guide

What is the CEMA Loan? And Who Qualify for the Loan

Are you a New York (NY) property owner who needs a refinance or tax relief? You should certainly learn about and consider the CEMA (Consolidation Extension and Modification Agreement) loan.

Let’s go through what this loan is, those who qualify for it, and some of the things you must consider when applying for it.

What is the CEMA Loan?

As most New Yorkers already know, the state is not a tax haven for property investors, especially those who live in the southern part where property values and mortgage tax rates are considerably higher. The CEMA loan can best be defined as a contract between a new lender and an existing lender. Both lenders decide to create a unique, consolidated loan by combining two or more without filing any cancellation on the current mortgage.

After completing this process, the property owner’s credit report will appear in the new CEMA mortgage, and it will show that the existing mortgage has successfully been transferred. Then, the homeowner is allowed to pay the tax calculated on the additional amount above what they initially borrowed (the difference between the two loans), which consequently decreases their mortgage tax.

Who Qualifies for the NY CEMA Loan?

Only residents of New York are eligible for the CEMA loan. In most cases, the loan acts as a refinanced mortgage, even though there is a slight chance that you could use it to buy your dream property. The main challenge that NY residents encounter when applying for a CEMA loan is finding a lender who offers such loans if their current one does not provide such a loan. Besides, changing lenders is not always the best choice because it is time-consuming and it could also be expensive.

Upon realizing that you qualify for a CEMA loan, you must consider a few factors before beginning the application procedure. These include:

  • Time: CEMA loans take time to complete, usually 30-90 days. This could be because you have to switch lenders to get the best deal. The NY regulations may also slow down the approval process. If your case is dire, and you can’t wait that long to get a refinance, think about taking a conventional loan instead.
  • Fees: A CEMA refinance is not devoid of costs. How much fees you pay when applying for this loan boils down to your lender. If they have experience working with CEMA mortgages and are ready to process yours, count yourself lucky. The cost you’ll incur will be much less. With new lenders, you might have to part with a few more bucks than anticipated.

Why Is CEMA Loan Popular?

Hopefully, this piece enlightens you about the popular CEMA loan that can offer the tax relief you badly need as a property owner in New York. Note that CEMA is not an ideal option for loans perceived as second mortgages, Home Equities or HELOCs. CEMA loans also don’t mean that your mortgage will be discharged. Before you make up your mind about applying for this loan, make sure to consult a competent loan officer in the state. They can help you decide if the loan fits your current needs and guide you through the application process.

Categories
Buying Rentals

Buying a New York City Co-Op

New York City has one of the most complex and expensive real estate markets in the world. Co-op housing or cooperative housing is the most common alternative in NYC (over 75% of apartment buildings). If you are looking to invest in your first co-op apartment successfully, there are certain things you need to understand before taking this giant step. Below is s a short guide on everything you need to know about buying a co-op in NYC.

What Is A Co-Op vs Condo?

A co-op is a form of residential housing whereby buyers do not own a housing unit in the building but rather buy shares in a corporation that owns the building. Unlike a condo, you do not get a property deed after purchase. What you get is a propriety lease which gives you access to a specific apartment.

This form of investment is considered a personal investment rather than a real estate investment as you are buying shares in a company and not real estate property.

Are you wondering if this form of investment is worth it? Worry not! We will outline both the advantages and disadvantages of Co-ps in the paragraphs below.

Advantages of Buying a Co-Op

  • Low Cost: Compared to condo units and houses, co-ops are 20 -30% cheaper. That is what makes them such a go-to option for those looking to settle or invest in NYC real estate.
  • Security: Co-ops are run by boards that carry out thorough background checks on individuals before agreeing to sell. Once in, you have an assurance that your co-op neighbors are safe.
  • Low Closing Cost: As mentioned above, co-ops are considered a personal investment. Therefore, you will incur lesser fees if you decide to sell. Selling your property involves a transfer of shares; therefore, it will not be subject to any mortgage recording tax, and you won’t need an insurance title.
  • Price Stability: Co-ops have strict requirements that contribute to the stability of the real estate market in NYC. Usually, not less than a 20% down payment (each co-op sets its range) is requested. Potential buyers equally need to have a debt-to-income ratio higher or equal to 25%, nothing less (a few go up to 30%). 
  • This system prevents banks from making aggressive loans. It preserves the value of a co-op building from reducing in case one owner has to sell.
  • Combined Property and Maintenance Costs:

With co-ops, both your shares of maintenance charges and property taxes are billed together and paid to the corporation. It is then in charge of settling the building’s property tax with the state.

On the other sides of things, here are a few considerations to have before making your purchase:

Disadvantages of Buying A Co-Op

  • Limiting Subletting Rules: While they cost less to acquire, co-ops have strict renting rules. Most prefer owners to occupy their premises over renters who could cause damages. The board may equally restrict the number of years you are allowed to sublet your property.
  • High Flip Tax: If you decide to sell your coop shares, you will be subject to a flip tax. This is a fee you pay to the co-op. They average 2% of the total sales price. This fee is less costly with condos.
  • Board Application Approval: Unlike houses and condos, buyers are screened and approved by the co-op board. This limits room for negotiations and the procedure can be invasive. Some boards may reject co-applications or gifted contributions to the down payment.
  • Post-Closing Liquidity Requirement: In addition to your down payment, the board equally requires you to disclose how many months of payments you can afford to have in cash, stocks, and any other liquid assets after you close. This excludes retirement savings and property investments. Most buildings demand 12 or 24 months of post-closing liquidity.

After looking at the advantages and disadvantages of this housing option you are willing to invest in, your next step will be to place an offer. For this, it is advisable to find a real estate broker to help review your application to be sure you meet all the criteria. Once your offer is accepted, all you need to do is wait for the board’s approval to close and move in.