Real estate is a long game, sometimes renovations need to be, too

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By Louise Phillips Forbes, Brown Harris Stevens

In today’s real estate market, the perfect property isn’t always move-in ready. 

Buyers who are able to recognize short-term opportunities and long-term potential will understand that the true value of a property often lies beneath its current condition. The key is to look beyond immediate challenges and focus on the long-term rewards. 

When taking on a renovation, it is important to differentiate between and then prioritize the must-dos and the would-be-nice-to-dos. Deciding this early on—and sticking with the plan—helps ensure that work is done efficiently and within budget, while still keeping an eye on the bigger picture. 

I experienced this firsthand in 1993 when I toured an apartment with a client. The property needed, well, everything, and the project was much more than my clients would consider taking on. But I saw a diamond in the rough. At the time, I was relatively new to New York City, single, and eager to establish roots in the city that I had quickly fallen in love with. 

Purchasing the apartment was the greatest gift I could have ever given myself—it was a testament to my independence and tangible recognition of my own self-worth. I staged the renovation over the course of several years, with each item checked off the list reinforcing the rewards of patience, perseverance, and sweat equity. The apartment not only became my home, but it also became the foundation for my future. Years later, I met my husband, and as our family grew, we were fortunate enough to purchase the apartment upstairs, allowing us to expand and reimagine our space.

Whether you’re planning to complete the work all at once or tackle it in stages, it’s important to carefully select the right professionals—an architect, a general contractor, or a real estate agent—who share your vision and can help make sense of the moving pieces. 

It is also important to consider the cause and effect of factors like the cost of labor and materials that can change over time and how shifting construction codes, building policies, and governmental actions can impact the overall scope. For example, in 2019, I helped a client renovate a 2,700 square foot investment property for a cost of $430,000. Fast forward to this fall, the client completed the same exact renovation for $815,000.

Renovating a home can be incredibly rewarding, but it requires careful planning, strategic decision-making, and the ability to adapt to an ever-changing market. With the right mindset and the right team of professionals, a property that may appear to be a fixer-upper today can evolve into the home of your dreams tomorrow.

Louise Phillips Forbes is a top producing agent at Brown Harris Stevens and a 34-year industry leader with nearly $6 billion in sales and a list of awards to her credit.

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Personalizing a Space for Academic Success

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By Tracy Wu, Manager, Avenue Studio

Research suggests that where a student studies is a key to their academic success. But in cities and suburbs alike where space is a cherished commodity, creating a functional, personalized, designated space for homework and studying can prove challenging. 

High-quality millwork and truly personalized concepts do not need to be financially out-of-reach. Both homeowners and urban dwellers should enlist the services of professional designers, fabricators and installers to turn any thought into a reality. 

Tracy Wu is the manager of Avenue Studio, New York’s leading custom interior design and home organization solution provider. She and her team have a deep understanding of the nuances required to create highly individualized solutions that enhance client’s homes and apartments in the country’s busiest metropolitan area.  

Together, they offer the following advice on how to craft a personalized homework area that will both maximize space and set students up for success this upcoming school year: 

  • Create a separation between workspace and living space. Student’s designated study space should be just that: a place to study. No matter the size, having a space that is solely dedicated to homework and doesn’t share functions, such as a kitchen table or couch, can increase motivation and limit distraction. 

  • Use the right lighting. Studies have shown that studying in dim lighting can increase eye strain and make it harder to retain information. Finding just the right amount of light through both overhead fixtures and lamps can create a calming atmosphere and encourage productivity. 

  • Organization is key. The less time and energy spent looking for something at their desk, the more time and energy a student spends on their work. Research proves that having an accessible system, no matter how simple, to store everything and reduce clutter will make homework time a lot easier, less frustrating, and more productive. 

  • Limit distraction. Workspaces should be clear and free of anything that could capture attention, especially electronics. The use of neutral colors, a removed spot to store phones or electronics, and white noise machines are all proven to help  keep students on track and make deadlines.

Tracy Wu is the manager of Avenue Studio, a one-stop luxury home brand offering custom interior design and home organization systems. With a keen understanding of the importance of space and the challenges of our modern lifestyle, Avenue Studio works directly with clients to design bespoke closets, pantries, kitchens, home offices, and furniture that enhances the home and elevates daily experiences. The team embraces a holistic approach, offering on-site measuring, collaborative design, custom millwork and production, professional installation, and after-sales services to ensure each distinctive need is met. Avenue Studio hosts over 50 product lines with a variety of classic, luxury, and modern design styles that amplify personal flair and deliver an optimal home furnishing experience. 

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4 Tips for Homebuyers in a Rising Interest Rate Environment

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Stan Ponte

Rising mortgage rates are causing uncertainty for many homebuyers in today’s market. The average rate for a 30-year fixed-rate home loan rose to 5.27%, according to Freddie Mac on May 5th. In comparison, the average rate on America’s most popular home loan was 3.22% in early January and 2.96% a year ago.

While the rising interest rate environment might seem daunting for some buyers, there are still ways for consumers to purchase their dream home even though rates are higher. Here are four tips for homebuyers to consider when looking to purchase a home in a rising rate environment.

  1. Cash is king

If buyers have the ability to pay all-cash for a home today, they will have a significant purchasing advantage and be seen as more likely to transact in the eyes of the seller. 

2. Be prepared

Buyers need to be extra prepared as time is likely not on their side. In today’s environment, interest rates can move quickly, either up or down. Buyers must be prepared to either buy interest rate locks or lose out because they are not ready to transact when they find a home. It’s important for buyers to work closely with a mortgage banker to ensure their current financial documents are updated and ready so that they can transact the moment they find a home. Buyers should triple check that all of their bank documents are updated with their mortgage banker especially if a home search is taking longer than expected. If a home search takes more than a month, buyers should provide new bank records so they can transact quickly when they are ready. If you are looking at potentially buying a co-op, where you own shares in the building rather than own the property itself, you may wish to do some research into what you need to do in order to get approved by the co-op board who are in charge of deciding whether your application will be accepted so that you give yourself the best chance of being able to secure somewhere to live.

3. Be creative 

Buyers should work closely with their mortgage banker to understand the different loan products and get creative with their financing options. Now is the time for buyers to lean into the competitive process for mortgage providers to determine what products are available today, at what rate, and at what cost. Adjustable-rate mortgages have returned as a way to straddle today’s rising rate environment, but buyers should understand all of the risks and the benefits associated with these types of mortgages to determine if they are a viable option for them.

4. Be careful 

While demand is coming back for adjustable-rate mortgages today, buyers should carefully read the fine print and fully understand the mortgage product that are taking. When signing a five, seven, or even 10-year adjustable rate mortgage, there are potential negatives and buyers must be careful as these are considered slightly risker than a 30-year fixed. Not only do these mortgages adjust to the current market rate once the term is up, but some contain balloon payments and/or the inability to refinance at will.

Rising interest rates and other economic headwinds are causing concern for many homebuyers today, but with this uncertainty comes great opportunities in the current market. There are some great deals out there and now is the moment for buyers to act if they can. Rates can still be attained, but the mortgage product might look different today.

Stan Ponte is a Senior Global Real Estate Advisor and Associate Broker with Sotheby’s International Realty - East Side Manhattan Brokerage. He was named the #2 agent across all firms in Manhattan by individual sales volume in 2020 according to “The Thousand” list, an annual national ranking by The Wall Street Journal and REAL Trends. As a realtor in New York City for the past 23 years, Stan’s client list ranges from first-time home buyers to CEOs, philanthropists, hedge fund managers, entertainers and technology thought leaders.

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Fall is for Fireplaces: four things buyers and renters should consider before cozying up

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By Louise Phillips Forbes Brown Harris Stevens

180 West 58th Street Apartment #9D

 For many residing outside of the city, the crisp fall air is synonymous with wool sweaters, hearty soups, and crackling wood-burning fireplaces. However, in New York City, before we can cozy up by the fire - there is an array of qualifications we must check off before committing to a property. A coveted amenity with a dwindling supply, a wood-burning fireplace can command a premium from $25,000 to as much as $100,000 on Fifth Avenue and Central Park according to most appraisers. 

Before committing, it’s imperative to understand the pros, cons, and cautions for buyers and renters seeking a warm fire on a cold Gotham night. To be prepared we hope this overview on the dos and don’ts is helpful before committing to your preferred home with accommodating reclaimed fireplaces.

Do not assume that the wood-burning fireplace is in working condition

In New York City, it is not uncommon for a building to seal off the chimneys during renovations and repairs and offer the mantle as an aesthetic contribution rather than a source of warmth. Before closing on any property, make sure you are getting what you are looking for! In recent years, approximately less than 10% of fireplaces in apartments listed on Streeteasy are in working order. If you are graced with the privilege of having a New York City fireplace, it is recommended that chimneys and fireplaces are professionally painted and cleaned bi-annually or periodically depending on usage.

Responsibility for maintenance costs should be discussed in advance

Because of the added maintenance that comes with having a fireplace in the city, it is important to assess the upkeep costs that you might be assuming responsibility for. As part of pre-purchase diligence, be sure to have a conversation (and document it!) with your landlord and discuss what falls under your building’s jurisdiction and maintenance, and what falls under yours.

Wood-burning fireplaces can lead to higher insurance rates

Usually, standard homeowner’s insurance covers fire and smoke damages; however, depending on the insurer, you may have additional charges to cover. Most recently, you can anticipate an increase of 2% and higher depending on your insurance carrier.

Implement precautions for fireplace safety

If you are new to fireplaces, you may not yet know the safety risk behind these added amenities. To ensure an efficient and safe fireplace for you and your loved ones, there are some precautions you must take. The top priority is knowing the signs of poor ventilation. An example of this would be a blockage, in which smoke may be blown back into your living space. Never put anything flammable near the entrance of the fireplace, and more conveniently, leave the space surrounding a fireplace empty.  To avoid a fire, never leave a fire unattended, and be cautious of what you chose to burn. And, in case of an emergency, always have a working carbon monoxide and smoke alarm and a ready-to-use fire extinguisher.

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How to Navigate the Post-Pandemic Market

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By Briggs Elwell, CEO and Co-Founder of RLTY Capital

Being a real estate agent in New York City is hard work but arguably one of the most exciting careers the city has to offer. Unlike desk jobs, real estate agents can experience something new every day, traverse the greatest city in the world and build networks that will benefit them for a lifetime. This career path takes hustle and grit - if you can make it in NYC, you can make it anywhere. 

Briggs Elwellcontact

Briggs Elwellcontact

Between new developments, resales, conversions, lofts, brownstones and skyscrapers, clients of all backgrounds can find a housing option that suits their needs, surpasses their lifestyle expectations and is uniquely New York. It’s a real estate market renowned for its value worldwide. For agents, the thrill of the hunt - and guiding clients along the way - is an eternal source of motivation with incredible rewards. 

As we emerge from the pandemic, real estate agents have a newfound appreciation for financial literacy, understanding operating costs and keeping workflow in balance. The challenges of last year showcased the need to think long-term and reaffirm your commitment to whatever it is that you do. For agents, that means doubling down and reinvesting into your real estate business to achieve growth and regularity for your team. And, despite the rebound of the New York real estate market, agents continue to experience fluctuations in deal flow and a lag time in commission delivery for a variety of reasons. 

Closing date push backs, construction delays, timing to sign a lease, and inspections are items that have always been challenging for agents as it relates to pay day. As independent contractors, agents fund much of the staging and marketing costs themselves and the uncertainty of commission timing makes financial planning all the more difficult. It takes a real commitment to the numbers and lean operating costs to sustainably grow a real estate business in New York - and even then, without the ability to definitely plan pay days, finances can be overwhelming for even the most astute agent. Adding the post-pandemic effects of uncertainty in terms of remote work and school, delays are more common as people plan for the future in neighborhoods and housing types that may not have considered pre-pandemic. 

My co-founder, Daniel Kennedy, and I launched RLTY Capital - a REtech platform and speciality finance firm for the real estate community to have more certainty and confidently approach the post-pandemic market. We carefully analyzed current market dynamics alongside an advisory counsel of real estate veterans like Ryan Serhant, CEO and Founder of SERHANT., and studied the day to day operational tools that are needed to succeed right now.  

RLTY is a new service that enables real estate agents, brokerages and developers to secure earned commissions upfront with no hidden fees or extraneous costs. We provide an efficient, seamless application process and complete confidentiality. Our underwriting is powered by a proprietary AI-enabled platform, deep relationships within the real estate community, and the ability to secure data from NYC listings services in real-time.  

We are committed to serving real estate professionals who have a proven track record of success and are looking to grow their businesses, hire and boost performance. Partnering with Ryan via SERHANT. Ventures, we are pioneering a new category of technology products and resources dubbed REtech. This pipeline includes tools for agents, brokerages and developers to enhance their performance, rapidly transact and accelerate investments in the New York real estate industry. 

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Maintaining Luxury Apartments For Wealthy Investors

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Dylan Pichulik

Dylan Pichulik

Dylan Pichulik began XL Real Property Management with one goal in mind- provide an unparalleled level of service and attention in a world dominated by companies that seem to have forgotten the basic principles of property management. Companies should be up to date with the latest property statistics and aim to gain customers from this. For example, Dylan has kept up to date with the latest lease accounting standards (learn more about IFRS 16 here) and many other elements of the property business to keep his company ahead of the game. As the chief executive officer of XL Real Property Management, and with a decade of experience, Dylan is responsible for overseeing the company’s operations and business development objectives.

  • What type of offerings do you provide to clients?

  • XL goes beyond just the laundry list of offerings for clients. Our services are designed so the role as the owner is only to sit back and relax – we take the stress out of owning investment properties in New York City and ensure we’re available 24/7 for our clients. Services include: rent Invoicing, rent collection; expense payment; insurance procurement; tenant requests; repair and maintenance issues; lease and lease renewal preparation; board application assistance for new tenants/renewals; apartment turnover services; emergency repair assistance; renovation oversight; unit owner meeting attendance; monthly and annual accounting statement preparation; state and federal tax filing preparation; furnishing procurement and inventory services; legal services; routine property inspections; mortgage escrow reviews; boiler, elevator and life safety equipment inspection; and monitoring and regulatory filings and compliance.

  • How much of an increase have you seen in business since the pandemic? How much of it is people who have left NYC, but plan on coming back?

  • We’ve seen about a 20% increase of business across the board and 50% of it is people who have left NYC but are planning on returning. 

  • What do you predict the real estate market is going to see in 2021? 

    • Presently, I think there’s going to continue to be a very active sales market – especially because people are specifically worried they’re going to miss the “covid discount”. It’s similar to those who kicked themselves for not investing in the stock market. While it’s still too soon to tell, by summer we should see more activity and recovery in NYC. I also predict you can count on seeing an increase in bulk buying – going back to the covid discount, we’re having a lot of conversations with our clients about taking advantage of the market and rates for long term investments.  

  • Can you give us an example of a client who you worked with during the pandemic? 

    • Of course – we worked with a gentleman who owns a condo in Midtown East but moved to Costa Rica to ride out the pandemic. He has an expensive art collection and engaged XL to do the following:  

      • Perform weekly inspections to ensure no leaking of the apartment

      • Work closely with HVAC company to ensure equipment working properly so that climate is well-maintained in the apartment

      • Coordinate and oversee weekly cleanings of the apartment

      • Clear drains on terrace to prevent clogging

      • Clear snow from building up around drains to ensure proper drainage

      • Check mail weekly

      • Pay and review all operating expenses

  • Is there one example/instance you can share about an ill-intended renter taking advantage of the Tenant Safe Harbor Act?

    • I think the Tenant Safe Harbor Act protected a lot of New Yorkers but with anything, of course there were people who took advantage of it. For example, we had a tenant that didn’t think it was fair he had to pay full rent because he was quarantining in Bora Bora.

  • How do you help investors enhance their profitability? What are the benefits to using XL?

    • New York City is a complex market – hiring a property manager to represent your individual apartment or small building is vital to having a prosperous investment experience. With all of the challenges that real estate investors face, XL Real Property Management maximizes the income potential of assets to help enhance profitability with services such as lease renewal negotiations, volume pricing on operational expenses, trustworthy vendors, and insurance policy audits

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