so in this video we're going to tell you why you should watch out for high rental
application fees when selecting an investment property condo in new york
city i'm Nick at Hauseit we can help save you money on your next purchase sale or
rental here in new york city learn how by visiting hauseit.com that's Hauseit
with an A so let's get started
so when you're selecting an investment property condo in new york city be
mindful of what application fees are charged by your building's managing
agent for the processing of your prospective tenant's rental application
there is a wide range of potential fees and fee structures out there including
some which are reasonable as well as some which are egregious and this is why
the topic of this video is to encourage you to be mindful of rental application
fees and check on them prior to signing on the dotted line and buying that
investment property condo in new york city now the problem with high rental
application fees is twofold number one it makes your rental
uncompetitive it will either make your rental take longer to find a tenant or
the tenant will be willing to pay less money because of the high application
fees in either case that ends up costing you money which ultimately reduces your
return and your overall yield thereby making your investment property a lower
upside proposition the other problem with buying a condo as an investment
property in new york city with high rental application fees is the fact that
application fees and pretty much everything in new york city only goes in
one direction and that's up so if you know going into your purchase
that your building has unreasonably high application fees
it's a very strong indication or hint of what's to come in other words going
forward they're probably going to continue to raise your application fees
and every other fee that they can potentially charge your building and the
more it gets out of line with other buildings again the worst it has of an
impact in terms of your overall yield potential for your rental and to a
certain extent it might even make it harder for you to sell if your
prospective buyer is also checking the rental application fees and they see an
unreasonable set of fees they're going to be willing to pay less for your
property so just to close out the video we
actually want to go over a specific example of a rental application fee
structure from a large building in williamsburg so we have it up on the
screen and i'm sure that you're going to look
and feel as overwhelmed as i was when i first saw this the list of fees is out
of control so you know to start of course you have your application fee
every building is going to have an application fee but here they seem to
have created multiple application fees with slightly different names
so to start the sublet application fee itself which is i guess the main
application fee is 2 500
now that is outrageous that is highway robbery your typical condo building in
new york city will charge an application fee 300 400 500 maybe 600 maybe 700
but 2500 is absolutely out of control and
unacceptable and to make matters worse that's not the
only quote unquote application fee that they charge
now if we look here there's also a 200
processing fee now what is a processing fee if you
already paid 2 500 for the application fee so to us
it would appear like a classic case of double dipping meaning your actual
application fee is two thousand seven hundred dollars and that's pretty much
two thousand dollars more than what any other condo building will charge you uh
in new york city and to add insult to injury not only
does this building charge and understandably so a move out and move in
deposit a refundable deposit they also charge both a 500 move-in fee
non-refundable as well as a 500 move out fee non-refundable
now i don't know about you but to me it seems like if you move into a building
it doesn't really cost anyone any money you don't have to pay the doorman extra
you don't have to pay anybody extra money for someone to move in it's
completely understandable that they take a deposit
in case your movers damage the apartment but to charge a move-in fee is nothing
more again than highway robbery and they get you on the way in and on the way out
so if we then go back to this application
we now tabulate that you have a total of twenty seven hundred dollars in
application fees you have a thousand dollars and move in and move out fees
that's thirty seven hundred dollars thus far
and on top of that this building a condo building has an annual sublet
administration fee of six hundred dollars
so when we add all of that up your total fee structure for a rental in new york
city is 4 300
that is essentially the cost of a monthly rental in new york city so if
you are buying this property just know that when you're modeling out
your returns and your cash flow basically every time you turn a tenant
you're going to lose a month of rent to these various fees
moreover being that this is a condo the fact that they are charging an annual
fee for subletting is akin to making it like a co-op it's pretty unacceptable
and in conclusion uh this building right here is not the kind of building you
want to buy into if you're looking for an investment property in new york city
we hope this was helpful if you are looking to buy a rental property here in
new york we can save you money here at Hauseit learn how by visiting
hauseit.com that's house it with an a we do appreciate your time today and we
hope to have you as a subscriber to our channel feel free to leave a comment
below i'm Nick at Hauseit and we'll see you on the next one