One Landlord's Lament

Daily News Staff Writer

Tom Diana invested his life savings in a Brooklyn building that he hoped would be a source of financial growth and security.

Eight aggravating years later, the 35-year-old Transit Authority construction manager complains that he's just starting to reap a paltry 2% return on his investment.

"Honestly, I would have done better if I'd have put all that money in a savings account," said Diana. "I'll never invest in a building again because you just get killed."

Like many landlords across the city, Diana blames state rent regulations with blocking his chances of making a decent buck from his Park Slope investment.

Of the eight units in his building, six are rent-stabilized and one is rent-controlled. Diana lives in the eighth unit and serves as superintendent.

He can charge a maximum of $260 for the rent-controlled unit, a two-bedroom apartment in a nice neighborhood.

The rent-stabilized apartments go for between $475 and $750, making his total take without vacancies, including what he would pay for his apartment, about $5,000 a month.

Property records show that Diana bought the building for $250,000 in 1988, including a $170,000 mortgage.

He said monthly costs over the last eight years have averaged a few hundred dollars short of his rental income. His biggest expenses, mortgage, maintenance and vital improvements, run about $4,500 a month.

Beyond that, the average monthly bills include about $350 for fuel, $225 for taxes and $200 for insurance. He figures another $700 a month, on average, covers vacancies, unpaid rent bills and Housing Court costs.

With expenses for maintenance and improvements having dropped a bit this year, Diana figures he's finally making about $500 a month above his costs.

"Right now I can't scream I'm not making any money, it just took me so long and so much to get here," he said.

And the costs don't include the time away from his regular job that Diana said he's spent filling out rent regulation forms and fighting tenant efforts to avoid paying rent for what he says are nonexistent building violations.

"I've got as much paper work on my little eight-unit building as I would on a $25 million project," he said.

He probably would raise rents on his units to $750 a month if the state Senate made good on a vow to end rent regulations.

"I should not have a problem making money on this building," he said.

Original Story Date: 12/07/96
Original Story Section: News Fix