Illegal sublets prove profitable for struggling New Yorkers

October 10, 2011 12:13PM

More than 1,500 New Yorkers are raking in as much as $10,000 a month by illegally subletting their rental apartments, the New York Post reported, as many struggle to find their financial footing in the wake of the recession.

When Tony Chavez lost his job at a hedge fund, he realized he could make a $60,000-a-year profit just by moving out of his apartment, the Post said. He stayed at a friend’s house and started renting out his pad for between $250 and $350 per night.

Renters are required to obtain written permission from their landlords in order to sublet their apartment legally, according to New York State law, and cannot charge more than 10 percent above the current rent. For Class A units, it is also illegal to sublet them for less than 30 consecutive days.

The main issue with illegally renting out an apartment is security, said City Council member Gale Brewer.

“You have to be concerned about the comings and goings in the building, and you need to know who you’re renting to,” Brewer said. “If people need help making ends meet, they should work on getting a roommate.”

As previously reported, some landlords have even resorted to turning their buildings into illegal hotels. The city shuttered 15 illegal hotels in May, when a new state law designed to root out short-term rentals took effect. The hotels were the targets of a sting operation in Manhattan and Brooklyn that commenced May 1, when it became illegal to rent out apartments for less than 30 days in New York. [Post]