 Re: how much do you folks pay for your rent or mortgage a month?
so you must be glad the governor signed 5% increase per year.
I have seen it happens in NYC,long long time ago,most landlords agreed to raise rent 2 1/2-5% per year to get some tax relief,they are called rent control and rent subsidy.
The better buildings raise 5% per year,the lesser ones raise rent 5% every 2 years.
This must be a doable deal then,but NYC folks seldom move out of their apt,esp they are enjoying below market rent.with inflation and more people coming into NYC looking for housing,these landlords cant raise rent enough to cover their costs,the only hope they have is these tenants die or bought a house in suburb or transferred to another state,few Newyorkers leave bIG Apple,but they do go to the big blue sky..
Hence an advice from the realtor if you are looking to buy-you get better deals in winter as more Oldies die in winter.
Anyway,the landlords come up with a brilliant idea,create a company and transfer the building to its name,then go to the bank and refinance the mortgage,say old mortgage was 900k,new one would be $3 millions(that was back in 1980s).
So now the landlord has 2.1 millions on hand.
Then he started to convert the building into a co-op,anytime someone moved out ,he would either let it sit or let the janitor or his relative moved in.so he can have a few units under his name.
Then he will apply to turn the place into co-op and start selling his units one by one,existing tenants will be offered insider price at a good discount,but the maintenance fee per month is 10% less than what they paid in rent(rent was $525 and maintenace fee if they bought the apt would be 447.
So the tenants do the math and refuse to buy and continue enjoying cheap rent with 3 shifts doorman and great location and free gas,water and garbage pickup.
As prices in NYC real estate kept rising,these apts are worth more so the tenants decide to buy not at the original price but much more.
fast forward todate ,these so called co-op are worth 10-15 times more than they paid for,so is the maintenance fee,from $1k-3k per month.
People keep buying co-op apts as they are cheaper than condos altho condos have lower maintenance fee.
Most do not mind paying high maintenance fee as long as they have good job.
as their mortgage payment is lower.
But what they dont realise is that with co-op,you are not buying a physical unit,you are buying shares in a corporation,you are a shareholder !
Then comes the recession and layoff,without a job,it is hard to pay $1-3k a month just on maintenance fee alone plus you have to eat !
Many on Wall Street lost their job in 2008 ,if they have a 401k with their employer which invest in their own stock like Lehman,Citicorp,Bears Stearn,they lost their savings and some are not old enough to get SS and medicare.so they have to buy private insurance or go without coverage,even if they are getting SS,they can hardly afford to pay 1-3k maintenance fee.
And it gets worse,as some co-op members cant afford to pay their monthly maint fee,rest of the co-op residents have to pick up the burden,until he defaulted on his mortgage,then the bank moves in and pick up his maintenance fee.
But the bank wants to rid the apt soon,so it will mark it down to sell fast,so bringing down the sales price of other units if you plan to sell yours.
I wonder something like this could happen in California,when businessmen cant make a decent profit or losing money,they will find a way .
Last edited by agent006140; 10-12-2019 at 01:15 PM.
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Normally rents in this part of the south bay go for well over $3k /mo for even just a 1br place.
