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Real estate record and builders' guide: v. 88, no. 2284: December 23, 1911

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s^^i^i?c5 m^, j/ Vol. LXXXVIII DECEMBER 23, 1911 No. 2284 ALTERING UNPROFITABLE APARTMENTS Reduced Incomes in Old Houses Can Be Offset By Intelligent Alterations —Changing Large Suites Into Small Ones a Frequent Source of Profit. IT was pointed oul in last week's issue of the Record and Guide that many own¬ ers of business property in various sec¬ tions of the city fail to realize the in¬ come they should, beauae they do not devote sufficient time to studying con¬ ditions affecting their holdings. It was also shown by concrete examples how a number of property holders had added very materially to their incomes by alter¬ ing buildings to meet changed conditions. In some of the more notable cases, the total cost of the alterations and a profit beside, were paid out of the increased rental the flrst year, Olher instances disclosed very material profits and still others showed how owners by making small alterations were able to keep good tenants who would otherwise have moved to more modern structures. The problems which owners of bus¬ iness property have been called upon to solve, also confront the holders of apartment houses. In the last few years the need for apartment owners to keep abreast of the times, especially in the great apartment house district of the West Side, has heen strongly emphasized. Since 190S, scores of modern houses have afisen in this part of the city and the occur, and the majority of owners fail to appreciate that the amount lost by carrying vacancies would in a short time equal the cost of alterations. In some cases it is necessary to spend consider¬ able amounts to modernize buildings. In others a very few dollars judiciously ex¬ pended will obtain new tenants. A broker recently showed an apart¬ ment on Central Park West to a pros¬ pective tenant and failed to make a lease because the premises looked dark and dingy. A few days later, another suite in the same house became vacant and, at the broker's suggestion, the o-wner had tlie kitchen and bath room enameled in white at a very slight expense. The same party that had refused to rent the first apartment, took the second after the touching up process, and the owner thus secured a responsible tenant by the use of a little labor and white paint. Another house on S5th street had lost a number of tenants because a few mod¬ ern conveniences were lacking. Tlie owner was able to appreciate what was needed and installed electric lights, hard¬ wood floors and modern plumbing. The cost was considerable, but before the al¬ terations were completed tenants were street. The original improvements con¬ sisted of several (ive-story apartments, containing seven rooms and batii. Each house had a separate entrance on Broad¬ way. The average rent obtained from the old apartments was )Fi50 a month each, and the total rent-roll for the building was about $20,000. It can be readily seen that the income obtained was en¬ tirely inadequate to the present value of Broadway property. The owner, not knowing what to do, leased the houses to a practical real estate man, and tlie lessee immediately altered the buildings exten¬ sively. Ey removing all the avenue en¬ trances and making one large en¬ trance on TSth street, the entire Broad¬ way frontage was left available for stores. The old fiats were sub-divided in¬ to suites of two, three and four rooms with either kitchens or kitchenettes. Good plumbing, electric lights and other mod¬ ern conveniences were installed. Within a very short time after the alterations were completed the apartments were en¬ tirely rented to an excellent class of ten¬ ants. The three-room apartments now bring in as much as did the seven-room flats before, and the entire income of the house is about $50,000, two and a half A PROFITABLE ALTERATION ON THE WEST SIDE. AN OLD BUILDING THAT BRINGS IN A BIG RENTAL. builders have vied with one another in producing modern and luxurious ciuar¬ ters. The normal increase in population has been insufficient to flll all the struc¬ tures, both new and old, and many of the tenants in the modern buildings have been drawn from older houses. Apart¬ ments which have always been success¬ ful heretofore, have experienced losses this year, never previously known, and the indications are that another year will flnd these same buildings suffering still more. The owner of the substantial apartment of ten years ago, but which lacks the modern finishing touches so essential in the eyes of the present-day tenant, is facing a situation which requires study and the exercise of good business judg¬ ment. Instead of maintaining an atti¬ tude of supine discontent and bemoaning the fate which has befallen him, he should apply himself to the task of keep¬ ing up with the times and by making necessary and intelligent expenditures, place his property in a position to com¬ pete with newer structures. Brokers and agents are constantly trying to im¬ press on their principals the necessity of making reasonable changes and are con¬ tinually being met with the reply, "I can¬ not afford to spend any money now be¬ cause I have several vacancies," The time to spend money is when vacancies secured for all the vacant suites; to-day the house is in a profltable condition. A corner building on Manhattan avenue which, because of its light and well planned suites, was desirable, became un¬ productive because the plumbing was old and the bath rooms contained tin tubs. The owner became disgusted and sold the house. The buyer immediately put in new plumbing and enameled iron tubs, and ill a short time rented all his apart¬ ments at a higher price tlian had ever before been obtained. These are ex¬ amples of what may be accomplished by a moderate expenditure of money. In some cases radical alterations are necessary to meet the changing condi¬ tions in cerlain neighborhoods and while these frequently involve considerable out¬ lay, the results obtained are sure to justify the expenditures. For three years past there has been a constantly increas¬ ing demand, on the part of responsible tenants, for apartments of two, three and four rooms. The supply has not equalled the demand, as only a few new houses of this type have heen erected. Many of the older houses which contain large suites are so planned as to permit of subdivi¬ sion, and in some cases this has been done with astonishing results. One of the most conspicuous examples of this form of alteration can be found on Broadway, at the corner of TSth times the original amount. Of course, the stores are capable of producing a much better return than the old ground floor apartments, and exclusive of the slores there are now fifty tenants as against thirty before altering. The cost w)as considerable, probably in the neighh. , hood of $50,000, but the greatly increased income makes the property one of the most productive in the district. Now and then one flnds an owner far- seeing enough to keep abreast of the changes in a given neigliborhood by ad¬ justing his property to meet conditions as they arise. The owner of the Pasa¬ dena apartment house at the corner ot Broadway and Gist street is one of these. The building is twelve stories high, of skeleton steel construction and was com¬ pleted about six years ago. Originally it vvas planned to contain only large suites of nine or ten rooms. This part of Broad¬ way is fast going entirely into business, and apparently it will not be long before apartment houses will be hard to flnd in the neighborhood. Five years from now there will probably be a much greater de¬ mand for a transient hotel or an office building at this point than for a residen¬ tial structure. Fully realizing this trend tlie owner has altered several of his large suites into ones containing only four or five rooms, and on the Broadway side, the second floor apartment has been