If you have recently purchased or inherited a property in the NYC area, you may be wondering what measures you need to take in order to be in compliance with the rules and regulations enforced by the local housing authorities. One such agency is New York City’s Department of Housing Preservation and Development, otherwise known as HPD, which promotes the construction and preservation of affordable housing for low and moderate income families and enforces housing quality standards.
So who needs to register their property with HPD? Property owners of residential buildings are required by law to register annually with HPD if the property is a multifamily of 3 or more residential units or if the property is a private dwelling of 1-2 residential units in which neither the owner nor the owner’s immediate family resides. In other words, if you have a 3 family and up or any # of unit investment property, then you will need to register.
The good news is that the registration process is not complicated. You can register and pay online at HPD Property Registration Online System or print your form and mail it in with your payment. The registration fee is $13 per year and is due on July 1 of each calendar year. More detailed information can be found at Property Registration. Failure to register your property can result in civil penalties of $250-500 in addition to being unable to certify a correction of violations on the property or bring an action for nonpayment of rent against a tenant.
If this is the type of thing you don’t want to be dealing with as a homeowner, you might consider hiring a property manager to streamline and manage these tasks for you. The more you know!
As we get older, we begin to think about how money actually works and not just where we spend it. The concept of residual income is often an intriguing and enticing idea of generating revenue while you can expend energy doing something else, whether that be working at your job, going on vacation or more to the point doing whatever you wish. One specific means of generating residual income is an investment property. In my opinion, most ideally would be to start with a four family. My reasons being that there are several units which can provide a stream of income allowing for extraneous variables such as one unit failing to pay rent, a vacancy, or perhaps occupying one unit yourself, and not too many (6 or more units become subject to rent stablilization/control laws in NY) as to cause a landlord considerable time and energy. Several factors will need to be examined when determining whether a specific property is a wise investment, and the rules will change as you become more experienced as a landlord, but to begin you will look at the rent roll of the property which is the income generated from the rental units. In addition, you will need to determine the expenses required to operate the property which includes the property taxes, fuel, insurance, water and sewer, repairs, etc. After deducting the expenses and any debt service (if the property is financed) from the rent roll, you can determine the net operating income which will be generated each month on the property. If you divide the annual net operating income by the price of the property, the result yields a capitalization rate or rate of return. Generally speaking, cap rates of 10% and greater are considered an extremely good return. If you ever doubt the attractiveness of investing your money in real estate, just remember that the bank will only give you a measly 1%. Then apply the rule of 72 which is take 72 divided by the interest earned, and that is how long it will take your money to double. If you’re interested in purchasing an investment property or finding out more information, contact me today.