4 ms·

They describe the "1-2 months free" phenomenon as something new, but that has existed for at least several years. It's the way they coax people into these new d

They describe the "1-2 months free" phenomenon as something new, but that has existed for at least several years. It's the way they coax people into these new developments. (Why people think that's attractive, I don't know; given the absurd prices, it's a drop in the ocean if you intend to live in the same place for a while.) I've never seen three months offer, so maybe that's what's new.

Nav_Panel 10y ago
I live in Brooklyn (not Downtown Brooklyn, though) in an old building with a totally new (gut renovated) interior. My flatmate and I are paying above market rent, but not that much (only a few hundred more per person), and it's worth it for the amenities (duplex apartment, central AC, no issues from "deferred maintenance"). We got a month free and have no broker fee. With these conditions, we're actually paying pretty close to market rent. I probably wont be sticking around for longer than 2 years, so we got a pretty decent deal all things considered.
- 35bge57dtjku 10y ago
  It sounds like you're paying an extra month or two or more of rent every year, from the 2 * 300$ per month extra you're paying.
  - Nav_Panel 10y ago
    Ok, let's figure this out. Market rent in my area (Bed Stuy) is $2200/mo for a 2BR. I'm splitting $3000/mo. Let's assume I'm staying 2 years and that the $2200 apartment would charge one month's rent as a broker fee (standard practice, often higher). I got one month rent free for my apartment and no broker fee. $2200/mo room * (12 mo * 2 years + 1 month of broker fee) = $55000 total for 2 years. $3000/mo room * (12 mo * 2 years - 1 month free) = $69000 total for 2 years. So, the difference is $14000 / 2 people = $7000 per person over 2 years, or $3500/year over market rent. This comes out to 2-3 months extra per year per person. ... The real question is, is it worth it for what I'm getting? I made the decision that yes, thus far it's worth it. Could I have gotten something cheaper? Sure. I was paying less when I lived in Manhattan ($900/mo!). But I like having central air (very few NYC apartments do), I like having no neighbors above/below my bedroom (I DJ/produce in my spare time and I wouldn't want to bother anyone. Also in Manhattan I had a situation involving a neighbor upstairs...), I like living across from the train (cheaper apartments are at least a few blocks walk), and I like having a good amount of space to myself. It's nice to have roof access, and the apartment is quiet and bright. As a software developer I'm making enough to not feel strained budget-wise. I think it makes sense to spend a little extra on living in a nice place. Lord knows there are enough crappy apartments in NYC.
    - 35bge57dtjku 10y ago
      > This comes out to 2-3 months extra per year per person. That's what I just said... > The real question is... Not really. I was just pointing out that your amazing free month of rent isn't really amazing at all.
n72 10y ago
A real estate agent explained to me that the reason for this is to keep the monthly rent as high as possible on rent stabilized apartments. Since on rent stabilized apartments there is a maximum percent a landlord can raise the rent annually, it is in their best interest to keep the monthly rent as high as possible.
- CPLX 10y ago
  That's not how rent stabilized apartments work. It's just to report a higher monthly rent roll, for purposes of increasing the value of the building.
refurb 10y ago
The reason they offer a few months free is that it helps delay/prevent the actual decrease in rent. Even thought offering 2 months free is the same as dropping rent ~17% (for the first year), they would much prefer to not drop the actual rent. The same thing happens with houses. You'll see a house for sale for $200K w/ a $10K bonus back to the new owner. A drop in rent/house price tends to be much more permanent than just giving cash back.
jseliger 10y ago
(Why people think that's attractive, I don't know; given the absurd prices, it's a drop in the ocean if you intend to live in the same place for a while.) My impression is that a lot of people in conventional, market-rate NYC housing move ever 1 – 3 years and concomitantly try to keep their "stuff" (http://paulgraham.com/stuff.html http://paulgraham.com/stuff.html) footprint small and mobile. I wonder if companies like Campaign Living (http://www.campaignliving.com/ http://www.campaignliving.com/) will help this general trend.

Nav_Panel 10y ago

I live in Brooklyn (not Downtown Brooklyn, though) in an old building with a totally new (gut renovated) interior. My flatmate and I are paying above market rent, but not that much (only a few hundred more per person), and it's worth it for the amenities (duplex apartment, central AC, no issues from "deferred maintenance"). We got a month free and have no broker fee. With these conditions, we're actually paying pretty close to market rent. I probably wont be sticking around for longer than 2 years, so we got a pretty decent deal all things considered.

35bge57dtjku 10y ago
It sounds like you're paying an extra month or two or more of rent every year, from the 2 * 300$ per month extra you're paying.
- Nav_Panel 10y ago
  Ok, let's figure this out. Market rent in my area (Bed Stuy) is $2200/mo for a 2BR. I'm splitting $3000/mo. Let's assume I'm staying 2 years and that the $2200 apartment would charge one month's rent as a broker fee (standard practice, often higher). I got one month rent free for my apartment and no broker fee. $2200/mo room * (12 mo * 2 years + 1 month of broker fee) = $55000 total for 2 years. $3000/mo room * (12 mo * 2 years - 1 month free) = $69000 total for 2 years. So, the difference is $14000 / 2 people = $7000 per person over 2 years, or $3500/year over market rent. This comes out to 2-3 months extra per year per person. ... The real question is, is it worth it for what I'm getting? I made the decision that yes, thus far it's worth it. Could I have gotten something cheaper? Sure. I was paying less when I lived in Manhattan ($900/mo!). But I like having central air (very few NYC apartments do), I like having no neighbors above/below my bedroom (I DJ/produce in my spare time and I wouldn't want to bother anyone. Also in Manhattan I had a situation involving a neighbor upstairs...), I like living across from the train (cheaper apartments are at least a few blocks walk), and I like having a good amount of space to myself. It's nice to have roof access, and the apartment is quiet and bright. As a software developer I'm making enough to not feel strained budget-wise. I think it makes sense to spend a little extra on living in a nice place. Lord knows there are enough crappy apartments in NYC.
  - 35bge57dtjku 10y ago
    > This comes out to 2-3 months extra per year per person. That's what I just said... > The real question is... Not really. I was just pointing out that your amazing free month of rent isn't really amazing at all.

n72 10y ago

A real estate agent explained to me that the reason for this is to keep the monthly rent as high as possible on rent stabilized apartments. Since on rent stabilized apartments there is a maximum percent a landlord can raise the rent annually, it is in their best interest to keep the monthly rent as high as possible.

CPLX 10y ago
That's not how rent stabilized apartments work. It's just to report a higher monthly rent roll, for purposes of increasing the value of the building.

refurb 10y ago

The reason they offer a few months free is that it helps delay/prevent the actual decrease in rent. Even thought offering 2 months free is the same as dropping rent ~17% (for the first year), they would much prefer to not drop the actual rent. The same thing happens with houses. You'll see a house for sale for $200K w/ a $10K bonus back to the new owner. A drop in rent/house price tends to be much more permanent than just giving cash back.

jseliger 10y ago

(Why people think that's attractive, I don't know; given the absurd prices, it's a drop in the ocean if you intend to live in the same place for a while.) My impression is that a lot of people in conventional, market-rate NYC housing move ever 1 – 3 years and concomitantly try to keep their "stuff" (http://paulgraham.com/stuff.html http://paulgraham.com/stuff.html) footprint small and mobile. I wonder if companies like Campaign Living (http://www.campaignliving.com/ http://www.campaignliving.com/) will help this general trend.