Renting Out Your NYC Condo: Rules, Taxes and Steps

You can rent out a condo you own in New York City, but you first need the building’s sign-off under its bylaws, and once you sign a lease you are a landlord under state and city law. That means a capped security deposit, a $20 limit on screening fees, FARE Act broker-fee rules, a ban on whole-unit stays under 30 days, and rental income reported on Schedule E.

This guide walks through each step in order, from reading your bylaws to filing taxes the next spring. It is general information, not legal or tax advice. Your bylaws, your lease and your tax situation decide the details.

Step 1: Read the bylaws and house rules

New York’s Condominium Act lets a condo’s bylaws include “provisions governing the alienation, conveyance, sale, leasing, purchase, ownership and occupancy of units” (Real Property Law §339-v(2)). The same subsection bars any provision that restricts leasing because of race, creed, color or national origin. Beyond that, the rules are whatever your building adopted. Look for:

• A right of first refusal on leases. Many condos can take over a lease on the same terms you agreed with a tenant. In practice the board usually waives it, but you need the waiver before the tenant moves in. See condo right of first refusal.
• Minimum lease terms (for example, no leases under a year) and limits on how often you can lease.
• Application packages and fees the managing agent charges you or the tenant for processing a lease.
• Move-in rules: elevator reservations, move deposits and a certificate of insurance for movers.
• Pet, smoking and occupancy rules your tenant must also follow.

Ask the managing agent for the current leasing package before you list. A tenant who signs and then can’t move in because the waiver is still pending is a problem you created.

Step 2: Check what changes for your own taxes and benefits

Some NYC tax breaks depend on the unit being your home. The Cooperative and Condominium Property Tax Abatement, for example, only applies to a unit that is the owner’s primary residence, and the owner certifies that to the board each year. If you move out and rent the unit, tell the board or managing agent so the abatement stops on time, rather than being clawed back later. Use the abatement estimator to see how much your tax bill could rise.

Step 3: Price the unit and run the numbers

Your costs don’t stop because a tenant pays rent. You still owe common charges, property taxes, any special assessments, your mortgage and insurance. Plan for vacancy between tenants and for repairs inside the unit, which your bylaws often make your job rather than the condo’s. Run a realistic budget in the rental cash flow calculator before you commit.

Step 4: Market it under the FARE Act

The FARE Act took effect June 11, 2025. A landlord’s agent, including a listing agent who advertises your unit with your permission, cannot charge the tenant a fee. If you hire a broker, you pay the broker. You also can’t require a tenant to hire a particular agent as a condition of renting.

• Every fee a tenant must pay to rent the unit has to be disclosed clearly in the listing.
• Before the lease is signed, the tenant must get and sign an itemized written disclosure of those fees. You or your agent keep it for three years and give the tenant a copy.
• Violations can bring a DCWP summons, civil penalties and restitution, and tenants can sue in civil court.

More detail: FARE Act rules for landlords. You can also list for free on Roofy without a broker.

Step 5: Screen tenants within the fee limits

New York bans application and processing fees. The only thing you can charge is the cost of a background and credit check, capped at the actual cost or $20, whichever is less (Real Property Law §238-a). You must give the applicant a copy of the report and the receipt from the company that ran it, and you must waive the fee if they hand you a check done in the past 30 days.

Fair housing law applies to you as well. NYC bans discrimination based on lawful source of income, such as housing vouchers. See source-of-income rules and tenant screening rules in New York.

Step 6: Collect the deposit and sign the lease

If the building was built before 1978, federal law requires a lead disclosure: give the tenant EPA’s pamphlet “Protect Your Family From Lead in Your Home,” disclose any known lead paint and records, include a Lead Warning Statement in or attached to the lease, and keep the signed disclosure for three years. Leases of 100 days or less and zero-bedroom units with no child under six are among the exemptions. NYC has its own lead law too; see NYC lead paint law for landlords.

NYC leases also need specific riders and notices. Use required NYC lease riders as a checklist, and attach the condo’s house rules so the tenant agrees to them in writing.

Step 7: Short-term rentals are mostly off the table

Under Local Law 18, you can’t rent an entire apartment or home for fewer than 30 days in NYC. That applies to owners and tenants alike, whatever the building size. A short stay is legal only if the host is a permanent occupant who lives in the unit during the stay, is registered with the Office of Special Enforcement, and has no more than two guests (children under 4 don’t count). OSE must deny registrations in buildings on its prohibited buildings list, which includes buildings whose owners have told OSE they don’t allow short-term rentals. Many condo bylaws also ban them. Details: NYC short-term rental law.

Step 8: Update your insurance

A condo unit-owner policy is written for an owner who lives in the unit. Tell your insurer before the lease starts and ask whether you need a policy written for a rented unit, how liability coverage changes, and whether loss of rent is covered if the unit becomes unlivable. Many landlords also require tenants to carry renters insurance. See landlord insurance in NYC.

Step 9: Report the rental income

IRS Publication 527 covers residential rentals. The basics for a single rented condo:

1. 1

   Report income on Schedule E

   Rent counts in the year you receive it, including advance rent. A security deposit you plan to return is not income. Any part you keep, for example for damage, becomes income in that year.
2. 2

   Deduct ordinary expenses

   Expenses of renting, such as common charges, repairs, insurance, property taxes and mortgage interest, are generally deductible against rental income.
3. 3

   Depreciate the unit

   Residential rental property is depreciated over 27.5 years using the straight-line method and a mid-month convention. Land is not depreciable. Use the rental property depreciation calculator to estimate it.
4. 4

   Watch personal use

   If you use the unit yourself for more than the greater of 14 days or 10% of the days it is rented at a fair price, the IRS treats it as a home and limits your deductions.
5. 5

   Check the loss rules

   If you actively participate, you may deduct up to $25,000 of rental loss against other income. The allowance shrinks once modified AGI passes $100,000 and is gone at $150,000. If you are married filing separately and lived apart from your spouse all year, the allowance is $12,500 and phases out between $50,000 and $75,000.

Estimate depreciation with the rental depreciation calculator, and read rental income taxes for small landlords. When you eventually sell, depreciation you took can be taxed back; see the depreciation recapture calculator.

Owner-occupant vs landlord: what changes

What to do next

• Ask the managing agent for the leasing package and the board’s turnaround time.
• Run the cash flow numbers with the abatement removed.
• Check what tenants will pay with the security deposit calculator.
• Look up your building’s record on Roofy’s building lookup so you know what a careful tenant will see.