I just rented an apartment in NYC this week and using Naked Apartments and RentHop were great -- forget about Craigslist. Naked Apartments combines duplicate listings which was definitely a helpful feature in my search. This new feature seems really great and helps prevent waiting around for email replies (some brokers are ridiculously fast, some aren't).
Craigslist is completely useless in NYC, but largely as a result of brokers poisoning the well. They will indiscriminately post in roommate categories, no-fee categories, and basically any category remotely related to real-estate.
I've seen coverage about some NYC apartment startups recently, and while some of these features are useful, I keep hoping for someone to come in and actually fix the core problems with NYC real estate - i.e., brokers.
There was a startup that had some buzz locally a few months ago when they launched who claimed to be upsetting the broker order, except it turns out they were doing this by becoming a mega-broker themselves and charging basically the same brokerage rates as brokers. Meet the new boss, etc.
If there's any aspect of NYC that desperately needs generous application of our "disruption" buzzword, it's renting.
Nestio is a relatively new startup in NYC that helps aggregate listings among other features, but it doesn't seem to be a disruptive startup from the perspective of solving the issues you mentioned.
I went through a broker and a super fast, easy, and great experience, but I was also wary of dodging some of those spammier looking firms you see on Craigslist and other places. Good luck finding no-fee places on Craigslist, don't even try. No-fee seems to be viable only if you scour the city for buildings that display their management info and you swoop in at the right time to claim a place directly. Alternatively, take over someone else's lease.
It's one of those "you aren't the client" situations. The brokers are horrific for apartment searchers, but are more convenient for landlords than trying to show and rent units themselves.
Very large apartment complexes (e.g. Stuyvesant Town) tend to have in house sales staff. Although even there some poor schlimazels end up needlessly paying a fee.
Who pays the broker is generally a sign of the market conditions. When it's a renters market the landlord eats the fees, when vacancies are down, like now, it's the other way around.
Also, for all the reasons mentioned in potatolicious's other post [1], it's difficult for a landlord that is renting directly (i.e. without a fee) to convincingly communicate that fact to potential renters.
Has it ever been a renter's market in NYC? It seems that NYC's rental market has to have been deeply in favor of landlords for a very long time in order to create a market for these brokers to even exist.
In 2002-3, I remember landlords not only paying broker's fees, but also offering 1-2 months free. Then in 2009-10 there was another dip after the banks laid off all those people.
I wasn't renting in the Dinkins' era, but from what I hear it was an entirely different story.
It's difficult, but the biggest barrier is money. If you bring a lot of it to the table NYC is not a huge pain to rent in (less so than SF, actually).
Some basic issues:
- 40X Rule. As a rule of thumb, your rent multiplied by 40 needs to be less than your annual pre-tax income. Failing to meet this means you're probably not getting the apartment, or if you do, you'd be expected to pay a huge deposit, or in some other way mitigate the landlord's risk.
- Brokers everywhere, and on the whole they are extremely corrupt. In NYC it's very rare to contact an actual landlord through a listing - you're contacting a broker, who will expect a commission of 12-15% of your annual rent for the privilege of being allowed to rent this apartment.
- Every channel where a renter might contact landlords directly and cut out the broker middleman is flooded with deliberate spam. Bait and switching is common - where they list on a "no fee" listing site, but when you call the apartment "suddenly rented" but there is a broker-fee apartment still available at the same address...
- Obfuscation is common. Some apartments are exclusively represented by a brokerage firm, where they've come to some arrangement with the landlord. Other apartments are actually fee-less. Brokers will attempt to suppress these apartment listings from getting out into public view, and repost them instead as "their" listings. The easiest way to recognize this is when the posting refuses to reveal the exact address (instead they will list nearby intersections).
- More bait and switch: brokers will frequently try to upsell with fake listings. This is common done by either posting a very good-looking apartment at a great price, and then arrange the showing. Once you actually show up to see the apartment they will try to pivot you to another, more expensive apartment that you didn't sign up for. This is also frequently done by showing the actual apartment, but relabeling it to be in a more desirable area. You can often tell this is happening if the broker refuses to meet near the listing's location, and instead tells you to meet them "by their office" in a nearby, but less desirable, location.
- Unlike most aspects of NYC life, there is no effective police action against the above abuses. You can file a complaint with the real estate licensing body, but unlike, say, the taxi licensing body, no real consequences result for the cheating broker.
- Terminology bingo. NYC is very space constrained, and as such landlords and brokers alike have come up with specialized language to describe their apartments that make them sound better than they actually are. Learning to read between these lines is a pain. A "flex" 2-bedroom actually means a 1-bedroom apartment where a makeshift living space has been constructed in the living room (this can be anything from a semi-legitimate wall to a curtain). A "1 bedroom" is frequently just a plain lie, it's a studio apartment. "Charming" usually means run-down. It takes quite some time to really figure out the hidden meaning behind a lot of apartment postings.
- Fake apartments altogether. This is particularly true if you're young, not used to renting (even in other cities), and trying to rent without being in the city to look at places. Lots of places will collect rental application fees and then reject all candidates. Rinse and repeat. Warning sign is an abnormally high application fee.
- Quality of landlord. Sometimes even good-looking apartments are actually run by slumlords who won't fix the heat, won't fix the water, and generally let everything go to shit. Because most NYC apartments rent in a matter of days (if not hours), there is no ability for the renter to do due diligence on the landlord. This is changing - the city has made building complaints public via API, and more and more real estate sites are incorporating this data.
The summation of all of this is that if you are looking for an apartment on a budget, you need to be ready to sign a lease/make a deposit the day of posting. Any apartment that is considered a "deal" will probably not last a few hours, and definitely won't last a day.
That's an awesome writeup, and matches my personal experiences in NYC exactly.
I looked at 25 different apartments before I found the one I'm in now -- it was the first one I'd been the first person to see, and I told them I'd take it on the spot.
If no one's taken an apartment within a day, it's either overpriced or crappy or both. But managing to be the first person to see an apartment (which usually means before it's technically listed, so you need connections) is not easy.
Is this specifically Manhattan experience? My experiences in Brooklyn were nowhere near this bad (before I eventually got out of the renter's market and bought here).
I suspect so. This has been true for everywhere I've looked - which has been all Manhattan. Even in the more run-down parts of Manhattan (coughChinatowncough) it's still the case.
My impression from coworkers is that it's the same in the "hot" parts of Brooklyn. Park Slope, W'burg, DUMBO, etc. Things may not be so bad further out though.
Perhaps it goes without saying, but each of these points can vary. For example, some landlords/building management companies have a 50x rule. Some brokers only want one month's rent. Anything is possible, however unlikely.
Thinking back to apartment hunting in NYC a few months ago makes me want to vomit. I am never going to do it again, I'd rather leave. I had a lucky break that did not involve using any of these services nor a broker.
16 comments
[ 3.6 ms ] story [ 51.9 ms ] threadI've seen coverage about some NYC apartment startups recently, and while some of these features are useful, I keep hoping for someone to come in and actually fix the core problems with NYC real estate - i.e., brokers.
There was a startup that had some buzz locally a few months ago when they launched who claimed to be upsetting the broker order, except it turns out they were doing this by becoming a mega-broker themselves and charging basically the same brokerage rates as brokers. Meet the new boss, etc.
If there's any aspect of NYC that desperately needs generous application of our "disruption" buzzword, it's renting.
I went through a broker and a super fast, easy, and great experience, but I was also wary of dodging some of those spammier looking firms you see on Craigslist and other places. Good luck finding no-fee places on Craigslist, don't even try. No-fee seems to be viable only if you scour the city for buildings that display their management info and you swoop in at the right time to claim a place directly. Alternatively, take over someone else's lease.
Very large apartment complexes (e.g. Stuyvesant Town) tend to have in house sales staff. Although even there some poor schlimazels end up needlessly paying a fee.
If they directly charged the landlords, maybe some of them would consider whether the service is worth 10-15% of a year's income.
Also, for all the reasons mentioned in potatolicious's other post [1], it's difficult for a landlord that is renting directly (i.e. without a fee) to convincingly communicate that fact to potential renters.
[1] https://news.ycombinator.com/item?id=6027785
I wasn't renting in the Dinkins' era, but from what I hear it was an entirely different story.
Some basic issues:
- 40X Rule. As a rule of thumb, your rent multiplied by 40 needs to be less than your annual pre-tax income. Failing to meet this means you're probably not getting the apartment, or if you do, you'd be expected to pay a huge deposit, or in some other way mitigate the landlord's risk.
- Brokers everywhere, and on the whole they are extremely corrupt. In NYC it's very rare to contact an actual landlord through a listing - you're contacting a broker, who will expect a commission of 12-15% of your annual rent for the privilege of being allowed to rent this apartment.
- Every channel where a renter might contact landlords directly and cut out the broker middleman is flooded with deliberate spam. Bait and switching is common - where they list on a "no fee" listing site, but when you call the apartment "suddenly rented" but there is a broker-fee apartment still available at the same address...
- Obfuscation is common. Some apartments are exclusively represented by a brokerage firm, where they've come to some arrangement with the landlord. Other apartments are actually fee-less. Brokers will attempt to suppress these apartment listings from getting out into public view, and repost them instead as "their" listings. The easiest way to recognize this is when the posting refuses to reveal the exact address (instead they will list nearby intersections).
- More bait and switch: brokers will frequently try to upsell with fake listings. This is common done by either posting a very good-looking apartment at a great price, and then arrange the showing. Once you actually show up to see the apartment they will try to pivot you to another, more expensive apartment that you didn't sign up for. This is also frequently done by showing the actual apartment, but relabeling it to be in a more desirable area. You can often tell this is happening if the broker refuses to meet near the listing's location, and instead tells you to meet them "by their office" in a nearby, but less desirable, location.
- Unlike most aspects of NYC life, there is no effective police action against the above abuses. You can file a complaint with the real estate licensing body, but unlike, say, the taxi licensing body, no real consequences result for the cheating broker.
- Terminology bingo. NYC is very space constrained, and as such landlords and brokers alike have come up with specialized language to describe their apartments that make them sound better than they actually are. Learning to read between these lines is a pain. A "flex" 2-bedroom actually means a 1-bedroom apartment where a makeshift living space has been constructed in the living room (this can be anything from a semi-legitimate wall to a curtain). A "1 bedroom" is frequently just a plain lie, it's a studio apartment. "Charming" usually means run-down. It takes quite some time to really figure out the hidden meaning behind a lot of apartment postings.
- Fake apartments altogether. This is particularly true if you're young, not used to renting (even in other cities), and trying to rent without being in the city to look at places. Lots of places will collect rental application fees and then reject all candidates. Rinse and repeat. Warning sign is an abnormally high application fee.
- Quality of landlord. Sometimes even good-looking apartments are actually run by slumlords who won't fix the heat, won't fix the water, and generally let everything go to shit. Because most NYC apartments rent in a matter of days (if not hours), there is no ability for the renter to do due diligence on the landlord. This is changing - the city has made building complaints public via API, and more and more real estate sites are incorporating this data.
- Simple noise. This is a real tragedy of ...
I looked at 25 different apartments before I found the one I'm in now -- it was the first one I'd been the first person to see, and I told them I'd take it on the spot.
If no one's taken an apartment within a day, it's either overpriced or crappy or both. But managing to be the first person to see an apartment (which usually means before it's technically listed, so you need connections) is not easy.
My impression from coworkers is that it's the same in the "hot" parts of Brooklyn. Park Slope, W'burg, DUMBO, etc. Things may not be so bad further out though.