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Asked by Liz, New York, NY Thu Feb 19, 2009

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Answers

2
Ny Landlord, Both Buyer And Seller, New York, NY
Wed May 27, 2009
Liz,
It is true. As of 4/24/09, the Seward Park BOD changed the sublet fee from 100 percent of maintenance charges to 200 percent. Therefore, should you need to sublet your Seward Park co-op, you would be paying your mortgage, plus your maintenance charges multiplied by 3.

Seward Park's BOD (and perhaps the advising Management Company) is being very short-sighted in this action. They expect to raise revenue without raising the maintenance. However, what will happen is that owners will have more difficult selling apartments, especially smaller ones, because potential purchasers like yourself will not to purchase apartments if they can't afford to sublet, should it become necessary. This will inevitably lead to a lower price tag on the apartments, more apartments for sale, and fewer sales. Thus the Seward Park BOD will collect less flip tax revenue. The ultimate outcome is that the Seward Park BOD has planned poorly in this regard and will have to raise maintenance when their plan exposes itself as a revenue killer, instead of a revenue driver. Seward Park is a very attractive community. Perhaps you will be able rent it for more than you have estimated, thus recovering your monthly outlay should you have to sublet it. Also, don't forget to check with a tax specialist, because you should be able to deduct the the mortgage interest, the maintenance, AND the 200 percent sublet fee once your are a landlord. Good luck.
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Jason Yang, , New York, NY
Fri Feb 20, 2009
Hi Liz, Ask to see the notes from the board meetings. This should give you a good idea whether it will be enacted or not. However, by the sound of the situation, either the maintenance will be increased or the sublet fee would be. So something needs to be done for the building to meet its expenses. You should also see how much money the building has in reserve and how much of a short fall it has each month (if any). This will give you a good idea of how much money they need to raise. Of course you would want to purchase an apartment with low monthly costs, however, you also want to make sure the co-op is financially sound.
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