Now, with property values under pressure and the rental market on fire, they are trying a new move to pull value out of their homes without selling: they are renting out their roomy apartments and stately town houses for high prices and moving into cheaper, more modest quarters.
The owners of these places have set aside anxieties about leaving their homes and the potential for property damage, preferring to focus on the upside: sizable profits.
“People are willing to pay astronomical rents, especially for elegant New York City properties,” said Gary Malin, the president of Citi Habitats. “There’s a huge demand for luxury rentals, but also a lack of inventory, especially because there’s so little new construction.”
One businessman has moved his family from a grand SoHo loft to a cramped two-bedroom in the West Village so that he can afford to spend a couple of years starting a business. In Brooklyn, owners of elegant brownstones and graceful Victorians are turning their houses into bed-and-breakfasts.
“These places allow people to rent the dream of New York City living,” Mr. Malin said. “Compared to living in a white box in a glass tower, these places feel much more like home. There’s more charm and character, more intimacy. A town house that’s been renovated and furnished is a unique home, with lots of character. Many of these places are offered fully furnished, so it’s like walking into a lifestyle. It’s like living in a movie set.”
Seven years ago, Michael and Christine Belotz bought a 3,000-square-foot loft on Grand Street in SoHo, a three-bedroom space with a library and a sunken master bedroom, and accented by soaring ceilings, oversized windows, freestanding columns and maple floors. A rainbow assortment of mosaic tiles decorates the bilevel great room; painted Mexican tiles brighten the artist’s studio; and brilliant blue Turkish tiles form the backsplash in the kitchen, which has a breakfast bar.
“We thought we’d live there forever,” said Mr. Belotz, who is 49 and used to work as a research director for a hedge fund. But a few weeks ago, the couple put the loft on the market as a furnished rental for $12,500 a month, and moved with their two young sons to a 1,000-square-foot two-bedroom in the West Village, for which the rent is $4,200.
“It’s a much tighter squeeze,” Mr. Belotz said, “especially with two little boys. But the financial upsides are considerable. The rent we’ll get from the loft equals the mortgage and maintenance on the old apartment, which is about $8,000 a month, plus the rent on the new one.”
If they get what they are asking, Mr. Belotz, who was laid off from his job two years ago, will be able to pursue a professional dream — helping start an investment management firm.
“I needed to make sure money wouldn’t be a problem down the line,” said Mr. Belotz, who plans to stay in his new place a few years. “The pieces all came together. Our place is by far our biggest asset, and we wanted to find a way to monetize it. It’s a little crazy here right now, and I definitely miss the loft. But I feel good about the decision.”
This kind of rental phenomenon is still somewhat under the radar, especially in Brooklyn, where some owners are renting out their brownstones for a year or two, and others are converting their homes to bed-and-breakfasts.
The presence of a high-profile tenant can make an owner tight-lipped. Sometimes the owner has moved into a sublet that isn’t exactly legal, or worries that the decision to rent out all or part of a house will be perceived as a last-ditch effort to avoid the sheriff. Still, when an owner turns landlord, the news spreads fast over stoops and backyard fences.
“I know a few people who have done this,” said Sharon Barnes, a former board member of the Society for Clinton Hill, a Brooklyn community group. “People bought when prices were very high, and didn’t realize they were in the midst of a bubble. They sometimes stretched as much as they could to buy the properties, and when the market started to soften, the mortgage and tax payments became extremely challenging.
Article source: http://feeds.nytimes.com/click.phdo?i=bd549a163bf8a1aeb05f3f15c64cc497
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