NY landlords continue to get pummeled with high taxes and new rules for renting out their properties. These dynamics already have many nervous, and could negatively impact the state and local economies. What can landlords and investors do to make the most of it, survive and keep serving those who need housing?
It’s Not Easy Being A Landlord In NY
New York has long been a top global destination to live, work and invest. It seems those with the power are pulling out all the stops to try and put an end to that. The last couple of years have seen real estate owners crushed with numerous new regulations, more taxes, and the stripping away of long counted on tax breaks. This can be even worse for those on Long Island and in Nassau County, where the property tax system just seems to get wilder.
Usually, in a normal environment, landlords are able to raise rents to offset the additional costs they are burdened with. New rent controls are putting an end to that.
We still need great landlords and investors willing to put money in and operate good properties. How can they continue to survive now?
Build New Properties
New construction properties can benefit from a lot of tax breaks, grants and special financing. When investors can make the math work on existing properties, they can always build new inventory.
Short Term Rentals
Airbnb has been extremely controversial. It isn’t legal in many places. Yet, many property owners may have no choice but to turn to short term rentals to retain their rights to evict and raise rents at reasonable paces.
Memberships Instead Of Leases
One of the hottest emerging trends we’ve seen in the last couple of years is more startups turning to memberships instead of traditional business models. They’ve done this in software and apps, office space, and more. Some companies are already starting to sell memberships which entitle members to stay in their properties. We’ll have to see if this can survive the tests Uber and Airbnb and WeWork have been through, but it is an interesting alternative.
Add Services For Additional Income
A natural reaction to being squeezed out of business is to try and cut more costs. Landlords can do less maintenance, but they can’t cut off utilities or stop paying their own mortgages. The opposite approach could involve adding extra services for additional income to offset the gap between their mortgage and property tax costs and the little they get in rent. Think of upgrades like gyms, laundry, concierge, and experiences like tours, movie nights, etc.
Challenge The Property Taxes
One of the easiest and fastest ways to try and make ends meet as a Long Island landlord is to challenge and appeal the property tax assessment and bill on your property. This could help save thousands per year in operating costs and expenses, and enable you to make ends meet, keep the property and keep serving those who need housing.