Renters vs Landlords...Who's really running this town tonight?

This is a question that came into my mind when listening to people all over talk about the real estate bubble and the economy. I have lived here my whole life and see things a bit differently than most other people living here. In other parts of the country and even the world, there is very little, if anything, that can compare to the rental market here. China, Japan, London, San Fransisco are other areas that are tight markets overall, where the demand far outweighs the supply. None have the draw and lure of this city. So who really runs this town? Renters or landlords?

The rental market here is somewhat insulated from what happens elsewhere. Even in the midst of the recession periods dating back over 100 years, the vacancy rate here in Manhattan is never in double digits. Actually, for it to hit 1% or greater is actually viewed as the market having a surplus here. This means that there is always fierce competition for affordable (if you can call it that) housing in Manhattan. The higher end market sometimes seems to go faster when priced properly and in a sound location.

Honestly, the pricing is actually irrelevant as this city is all about location. For a solid location, the price can be what the market will bear. For example, a new building on the corner of West 72nd and Broadway, directly across from the 1/2/3 train station aptly named, "The Corner" has rented at least 75% of it's units with studios STARTING at $2975, 1BR's at $4600, 2BR's at 7950 and 3BR's at $16,000 per month. They began leasing earlier this year. I still can't figure out why you take a train if you pay $18,000 per month for a three bedroom. I would think sitting in traffic in a towncar with a/c is better than having Louie from the Bronx eat his bagel, Henry the Hipster from Harlem (used to be Larry Homeboy from the hood, not as much anymore) blasting gansta rap from his ipod and various shady individuals rub you up on your way downtown in 20 minutes on those sardine cans we call the subway, but what do I know?

This shows that while the rest of the country and even this city and state, are in a crunch financially, New York is still the most affluent city around. The landlords have always been in control historically. With the "crash" which was really more like an altitude adjustment of rents and sales prices here since the fourth quarter of 2008, the renters gained some ground as rent prices dropped 4% and sales prices became more negotiable through the last two years. The sales market is still a buyers market. We are still seeing some of the lowest mortgage rates ever, and the owners are having a hardtime finding buyers as mortgages are not getting approved as much for sub 700 credit scores. Rentals, is another story altogether.

There is a shortage of rental apartments as the vacancy rate has dipped below .90% again for the first time since the second quarter of 2008. The landlords can always rent directly and the renters can always rent directly. It's kind of like finding a needle in a haystack in this city though. That's a part of why broker's earn our fees. It's not just about turning a key or opening a door and being a bit of a tour guide. We screen, guide, advise, prepare and even serve as therapists more often than not.

Landlords have been offering a month of rent either free or towards the broker's fee. A standard broker's fee is 15% of the first year's rent (a little less than 2 months rent). Many broker's will settle for this concession from landlords when it's offered, as it helps everyone. The landlord gets a tenant that has been pre-screened by a broker rather than a random street-walker, the renter gets a decent apartment and saves almost two months rent and the broker gets a piece of a commission rather than no commission at all. As the market tightens, those concessions from landlords dry up. For a landlord, a person being able to pay the fee is more likely to be a model tenant. It speaks volumes to a landlord that someone is financially solvent enough and willing to pay an expert two months rent to find the best possible space, quality, location and price for the dollar.

I have seen those concessions vanish in high demand areas that they were never really offered in before. There usually is a catch when a landlord offers this. Either it's a large managment and the apartment has been vacant for a while, the monthly rent is the same as if you paid a fee yourself to a broker, the area is a fringe area (further from a subway or "developing" area) or the landlord is desperate to get it rented fast. Either way, you get what you pay for. Do the math and you'll see that finding a below market rent with a broker's fee involved, usually balances out better in the long run over two years or more versus a market rate apartment with yearly increases in the rent of 7-10%. If you don't have the money for a fee, than begin to expect five, six or even ten hour days, at least five or six days a week, of pounding the pavement looking for your next place.

The concessions have vanished a bit, but with the traditionally slower winter rental season approacing, I sense more will begin to pop up again in a month or so. This is the time where the renters will be able to negotiate lower monthly rents, perhaps get a fee paid from a landlord if they are going through a broker. Do realize that the landlord may ask you to sign a 16 month lease so that they get the apartment back vacant during the peak rental season and can get top dollar.

I guess the renters are in control in fringe areas. Those are hard to rent apartments and so when a landlord has someone interested, they can be a bit more agreeable. The owner has to offer free rent and or pay a month to the broker to ensure the units get rented and not sit vacant for months at a time. In high demand areas, there's no question about it. Let's be honest though, overall, the landlords have what we want as prospective tenants. Even when things can seem otherwise, they are always in control!

THE END OF THE NO FEE SEASON IS RIGHT UPON US!!!

Greetings all. I will cover this once for all of those not in the know. There is only one true "No Fee" rental in this city. That is when you rent from an owner directly. While it can still be done, it's like finding a needle in a haystack. That is why a knowledgable, professional broker will never be obsolete. We save you time, which saves you money. While it may cost you more money up front at lease signing, in the long run, we save you the time and aggravation of looking for three months and putting in dozens of applications until you get a place to call home. As they say, you can't put a price tag on happiness!

When using a broker, a "No Fee" apartment usually refers to us receiving one month of rent towards the broker's fee directly from the owner or management company. If you do the math, you will see that this is a huge discount in itself from the standard 15% of one year's rent charged in Manhattan as the fee. You are basically getting us to give up half of our commission, take a payment from the building or owner directly within 2-8 weeks from move in, making you a happier customer overall. I have actually waited four to six months in some cases for payment, but if it makes my clients happier, I have lived off of ramen noodles and tuna before and can do it again in the lean times ;-)

The first slideshow to the top left, is a Murray Hill, PET-FRIENDLY, Doorman building offered as "No Fee" for IMMEDIATE move in! The OP wil be gone after this coming week! Studios here are currently ranging from $2050-$2350. That is the only size apartment left in the entire building.

I STRONGLY urge you to call me or email me RIGHT NOW if you are looking to move before May. The time is almost here when the concessions will dissappear from the market until October. May through October is the peak rental season in this city. Landlords will not have enough property for the rush of new hires, interns and new students we recieve each year. Even the areas not normally focused on tend to stop giving away these concessions in the busier time of the year. The "fee" is still coming out of your pocket with these rentals, just in a different way. Often, a "no fee" client is just limiting the amount of options available, as the lower monthly rents are often the full fee listings. The "no fee" listings often charge a slightly (5-10%) higher monthly rent than a comparable apartment which is not offering any concessions.

Here's a link to the comprehensive vacancy and rental rates over the last five years as testament to my industry knowledge-->Rentals2002_2006.pdf

For those who still don't believe the HARD DATA FACTS, I have seen this trend happen for three years first hand now. People just DON'T move as much in the winter months, as they are too busy being depressed by the cold, rain and snow or just travelling to visit family and friends to AVOID the weather here. They then ASSUME that it will be easier in the summer, unbeknownst to them it is like a feeding frenzy come that time of year!

I have a host of great LUXURY buildings and also some traditional rentals offering this concession for the next four weeks or so. I can not mention that in the ads on our company website, but I can tell you all about them here.

I can not urge you enough to consider the options.


1: Wait another month or two and get caught in the mad spring/summer rush and have VERY little to choose from.

2: Wait another month or two and have options, but pay a full 15% of one year's rent

3: Move earlier and SAVE big time by taking advantage of a slightly slower (if there is such a thing in NYC) rental market right NOW!

The choice is yours. You need to make the call!

Tis the season of NO FEE rentals!

Amazingly, there are over 268 listings currently on the market which I can rent to you as a "No Fee" rental. For those not in the know, the standard commission here in NYC is 15% of the first year's rent, which is due at lease signing. Many landlords, especially during this traditionally slower time of year for rentals, offer concessions known as OP's (Owner Paid) which equal one month (roughly half of the standard fee) to help brokers and tenants come to an agreement and thus fill vacant units.


More often than not, the units which offer this are not in the premium areas which are in the most demand, so it takes some compromise on all three sides to get the transaction done. The broker has to be willing to forgo roughly half of his standard fee (10% of something beats 100% of nothing!). The tenant has to be willing to see the value in taking a place that may be outside of the box by common standards. Areas such as Washington Heights (WaHi), Jackson Heights (JaHe?) Harlem (Morningside, Hamilton and Suagr Hill as well!), certain areas of Brooklyn (Think outside the hipster areas such as Willie B and Green P) and of course, the Fi-Di area of Manhattan will net you big savings on a broker's fee.


If you are not at all in the higher budget range, these are areas you will need to consider to get the maximium yield for your dollar. At the end of the day, the "no fee' market is the exact same thing as the "fee" based market. The fee is just spread out a different way.

Trust me when I tell you, this is not the NYC of ten years ago where you had to be scared of these areas. Gentrification has spread to the point that the only place without a Starbucks is Two Bridges. I know a lot of you reading this are like "Is that even in Manhattan?"
Look here http://en.wikipedia.org/wiki/Two_Bridges,_Manhattan

Call or send me an email with details regarding your search for a new home.