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Choosing 1-yr. v. 2-yr. lease -- any advantage to either?

NYC Rent Regulation: Rent Control/Rent Stabilized, DHCR Practice/Procedures

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Choosing 1-yr. v. 2-yr. lease -- any advantage to either?

Postby sr77 » Sun Jul 08, 2018 3:57 pm

Has historical research & analysis shown any advantage to choosing a 1-yr. lease over a 2-yr. lease, or vice versa?

I ask only in terms of how the RGB increases have historically worked out when comparing the different lease terms, not taking into account any other considerations.

Thanks.
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Re: Choosing 1-yr. v. 2-yr. lease -- any advantage to either

Postby TenantNet » Sun Jul 08, 2018 4:29 pm

This has been discussed before at length. Search for it.

Up until recently, choosing a 2 year lease was a better deal in the long run. But in the last 4 years, there were two years with 0% increases for 1-year leases, so that equation has changed.

I can't say about the new guidelines set to start in Oct. which are 1-year: 1.5% and 2-year: 2.5%.
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Re: Choosing 1-yr. v. 2-yr. lease -- any advantage to either

Postby sr77 » Mon Jul 09, 2018 4:15 pm

TenantNet wrote:Up until recently, choosing a 2 year lease was a better deal in the long run. But in the last 4 years, there were two years with 0% increases for 1-year leases, so that equation has changed.

I can't say about the new guidelines set to start in Oct. which are 1-year: 1.5% and 2-year: 2.5%.

My computations show very little difference between any of the currently available options (for renewals before 10/1/18):

The unknown is what the increase on a 1-yr. lease will be for 2020-2021, but that would only affect taking a 1-yr. lease now (1.25%) + a 2-yr. lease in 2019 (2.50%).

At the time the latter would occur -- since the 2020-2021 guidelines would not be known until late June 2020 -- a person who had taken a 2-yr. lease for 2019-2021 would be locked in at 2.50%.

Even that would only be a disadvantage in the event that a 2-year lease under the 2020-2021 increases turned out to be a lower % (or even ‘zero’ again for a 1-yr. lease… imagine that unlikely deja vu occurring).

If I'm wrong about any of the above don't be shy about setting me straight.
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Re: Choosing 1-yr. v. 2-yr. lease -- any advantage to either

Postby TenantNet » Mon Jul 09, 2018 5:27 pm

But the future RGB is always an unknown. You can only guess. But over time - 50 years - those who have picked 2-year leases are generally paying lower rents.

We discussed this (briefly) on a radio interview on WBAI this morning. If they post it I'll post the link.
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Re: Choosing 1-yr. v. 2-yr. lease -- any advantage to either

Postby BubbaJoe123 » Tue Jul 10, 2018 5:29 pm

I ran the math on this a year or so ago. Basically, it doesn't really matter very much. In the 70s and early 80s, it was often a MUCH better deal to take two year leases. Since 2000 or so, it's been pretty much a tossup.
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Re: Choosing 1-yr. v. 2-yr. lease -- any advantage to either

Postby sr77 » Tue Jul 10, 2018 7:29 pm

BubbaJoe123 wrote:Basically, it doesn't really matter very much. . . . Since 2000 or so, it's been pretty much a tossup.

Totally agree. As long as there are no large jumps year-to-year or between the 1-yr. & 2-yr. percentages (e.g., 2-yr. percentage being double or more than the 1-yr. percentage), the difference seems to be negligible.
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Re: Choosing 1-yr. v. 2-yr. lease -- any advantage to either

Postby sr77 » Tue Jul 10, 2018 7:29 pm

TenantNet wrote:We discussed this (briefly) on a radio interview on WBAI this morning. If they post it I'll post the link.

Which program was that on? Housing Notebook? It looks like the station has listenable archives.
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Re: Choosing 1-yr. v. 2-yr. lease -- any advantage to either

Postby TenantNet » Tue Jul 10, 2018 7:34 pm

Housing Notebook is Met Council, which unfortunately, sold out to real estate interests some time ago.

Here's the link: https://archive.org/details/JohnFisherSeg7918MGH
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Re: Choosing 1-yr. v. 2-yr. lease -- any advantage to either

Postby sr77 » Tue Jul 10, 2018 7:42 pm

TenantNet wrote:Here's the link: https://archive.org/details/JohnFisherSeg7918MGH

Thanks.
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