How to Become a Landlord of a Manhattan Condo

Manhattan is one of the most expensive real estate markets in the nation, and buying a condo or co-op apartment can be challenging because of the stringent rules imposed by building boards of directors. However, once you've got your foot in the door with condo or co-op ownership, becoming a landlord is much less difficult and can be very rewarding financially. It's usually not even a full-time job.

Instructions

1. Own one or more Manhattan condo apartments. This may be easier said than done because the vast majority of apartments in Manhattan are co-ops, not condominiums. While the rules governing condos are usually less strict, they tend to be more expensive because they're so scarce. As an individual, you'll need at least a 10 percent down payment (but sometimes as much as 30 percent) to qualify for most condo boards. Citi Habitats has an excellent guide to buying property in Manhattan (http://www.citi-habitats.com/buying.html). Larger-scale investors may want to buy several condos in one building to increase profits. Make sure that the apartments you buy allow leasing and/or subleasing. Co-ops tend to have very strict leasing rules, but condos are usually more lax, making them a better choice for a rental property.

2. Contact the management company. In Manhattan, most condos and co-ops employ a management company to collect rents, handle maintenance, do payroll and generally take care of all property management issues. The management company will often advertise apartments for rent and handle rental applications and board approvals as well, so you will need to develop a good working relationship with them. The management company will charge approximately 10 percent of the rent for its services. While you should be able to set the rent yourself, you will have to keep that 10 percent fee in mind when deciding whether or not the apartment will be profitable as a rental. As the owner, your expenses will include your mortgage, insurance, taxes and a maintenance fee (which is usually comprised of your share of building maintenance costs, the superintendent's salary, usage of common areas and utilities) plus the cost of any repairs needed in your unit.

3. Find tenants. The management company may or may not help with this, and the condo board may or may not require your tenants to pass board approval. In any case, advertising the apartment on a site like Craigslist or listing it with a broker can help you find good tenants quickly and easily. Just remember to run credit checks and collect references from potential tenants. Since the condo is your personal property, you will be responsible for the cost of repairs if tenants break things. Luckily, in most cases, the 10 percent fee you pay to the management company covers the services of the building superintendent, so your tenants will always have someone to call and you should not have to pay for labor for minor repairs.

4. Keep an eye on things. Since the management company handles a lot of the work involved, becoming the landlord of a Manhattan condo may seem like a breeze, but you can't afford to become complacent. If your tenants stop paying rent or break their lease, you are still responsible for the mortgage and maintenance fees on the apartment.