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I'm about to graduate college and move to NYC for a job. The unfortunate norm there is to pay a 15% fee (of the annual rent) to brokers to get a rental apartmen
by kevindong 8y ago
I'm about to graduate college and move to NYC for a job. The unfortunate norm there is to pay a 15% fee (of the annual rent) to brokers to get a rental apartment. The cheapest the broker's fee gets is one month's rent, so about 8.33% of the annual rent. High end apartments sometimes pay the broker's fee on the renter's behalf [2]. Large apartment complexes sometimes have their own leasing offices, so there's no fee there either. To be clear, this is a one time fee paid when you initially move into the apartment. If you renew the lease, you don't owe another broker's fee.
Meaning if the rent on an apartment is $2,000/month = $24,000/year, the broker's fee on that would be $24,000 * 15% = $3,600. The cheaper apartment are usually owned by small landlords who use brokers to vet applicants. For those apartments, you're required to use brokers. There's no way to opt out by working with the landlord directly as the broker's fee is paid by the renter. The broker provides their services to the landlord for free.
I'm trying my absolute best to find a no fee apartment, but it pretty severely limits my options. For studio or 1 bedroom apartments under $2,500/month, there's currently 1,362 no-fee apartments [0] and 3,395 apartments at large (so, 2,033 for-fee apartments) [1].
[0]: https://streeteasy.com/for-rent/nyc/status:open%7Cprice:-2500%7Cbeds%3C=1%7Cno_fee:1 https://streeteasy.com/for-rent/nyc/status:open%7Cprice:-250...
[1]: https://streeteasy.com/for-rent/nyc/status:open%7Cprice:-2500%7Cbeds%3C=1 https://streeteasy.com/for-rent/nyc/status:open%7Cprice:-250...
[2]: https://www.brickunderground.com/blog/2015/12/in_case_you_missed_it_high_broker_fees https://www.brickunderground.com/blog/2015/12/in_case_you_mi...
- michaelper22 8y agoI don't understand how this racket is allowed to operate. From my experience (three NYC apartments through realtors), the landlord's realtor provides pre-screening of "desirable" tenants for the landlord, showings, collecting paperwork from the prospect, and handing over the keys. None of this adds value from the (prospective) tenant's perspective, but the tenant must pay the fees (in all three cases, one month's rent).
- tootie 8y agoI recently worked on a financial website that does a full credit, background and fraud check online and in real time for issuing small loans. There's some amount of manual auditing that can happen in the background for anyone that raises a yellow flag, but otherwise you can get a loan approved and disbursed with no fees and it happens in a few days and is fully automated.
- airstrike 8y agoMoved to NYC and paid a broker $8k+ for an apartment I had found by myself on streeteasy, and rent was around $3.5k... To this day my wife and I refer to her as "the parasite". She provided ZERO value other than showing me around the building, which any of the 20-person staff in the building could have done, and in any case certainly doesn't justify paying her more than TWO months' rent
- freewilly1040 8y agoI'm surprised there is not more progressive backlash against apartment brokers in NYC. Plain as day rent seekers disproportionally affecting people with low incomes. Who are their friends?
- kevindong 8y agoThere is actually movement to cap the broker's fee at one month's rent, cap the security deposit at one month's rent (and allow for paying the deposit over six months), and mandate the return of security deposits within two months of the lease ending. https://www.brickunderground.com/rent/pros-cons-capping-brokers-fees-security-deposits-nyc https://www.brickunderground.com/rent/pros-cons-capping-brok...
- Eridrus 8y agoFWIW there is a bill working it's way through city council to limit the fee to 1 month's rent, so people realise it's an issue. Now if only they banned renter-side fees entirely.