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January 22, 2009
Soft Rental Market?
I've rented 2 floor-thrus in my Fort Greene brownstone for the past 3 years with no problem, but I always use a broker. Suddenly, I'm having trouble. Has the bottom fallen out of the rental market already? Has anyone else had to lower rents? I'm probably going to list it on craigslist - any other ideas?
Comments
Hi,
I have several apartments in prime park slope. I gave a one bedroom apartment to a broker and after a month of little interest he informed me that maybe I should lower the rent by $100. After doing so, the apartment still did not move. So I decided to place an ad on craigslist and show it myself. The apartment was rented right away. There were 3 people interested in the apartment.
I believe the rental market is softer then last year. But not by much. Especially in prime locations. However, this is the first time in 15 years that I actually had to lower the asking price. Also take into consideration that its always a little harder to rent during this time of the year. At around March you should see a greater interest.
Posted by: landlord at January 22, 2009 3:29 PM
Maybe if you described tham and told us what the rent is we might be able to add something. I don't see rents lower in bed Stuy.
Wait for cornerbodega's insight though.
Posted by: daveinbedstuy at January 22, 2009 3:29 PM
As a renter, I agree with "landlord." Renters are looking for deals right now, and there are deals to be found, so it may be hard to rent for the same price as last year. However, you don't have to lower by a ton--at least not yet. A $100 or so reduction would likely make you competitive.
Posted by: alsawo at January 22, 2009 3:32 PM
I forgot to mention that my rents are always a little below market to begin with.
Posted by: landlord at January 22, 2009 3:32 PM
Depends by what you mean by "lower". Lower than the last tenant or lower than the hype you have gotten from the real estate agent? I have had to lower them from the expectations and promises of over zealous agents promising the moon, but have yet to lower them from the prior tenant just moving out. But then again, I generally don't raise rent upon renewal and wait until the tenant moves out or they stay for more than a few years. It's better to keep a good tenant than have a vacancy unless you want them to leave. One-two months vacancy and your anticpated rent increase is totally wiped out. Have you always rented them in the winter? Mid-Winter is not an ideal time. If you opt to list yourself via craigslist, download a credit release form and screen your tenants for everythiing, which is one of the benefits of using a real estate. Plan on seeing some real winners via craigslist.
Posted by: ou812 at January 22, 2009 3:39 PM
it's pretty simple why you were having problems using a broker. NO ONE USES BROKERS ANYMORE! NO ONE WANTS TO PAY A RIDICULOUS FEE TO SOMEONE OF 12-15 PERCENT OR EVEN JUST A MONTHS WORTH OF RENT FOR DOING NOTHING! the word has been out for quite some time. apts with broker fees will not move for the most part and brokers are the new rotary telephones!
*rob*
Posted by: PitbullNYC at January 22, 2009 3:45 PM
"Plan on seeing some real winners via craigslist."
I don't think that just because people don't want to pay $4500 to a broker (for doing next to nothing) makes them any less of a "winner" than someone who does.
Posted by: boofer at January 22, 2009 3:49 PM
I agree with Rob - there's no need for any renters to use a broker in Brooklyn, so as rents are falling anyway, why would anyone waste time on a place where you pay 15% of the annual rent just for some ape to open the door for you?
List it yourself, its pretty easy to screen. And in any event you'll do no worse than an uninterested broker.
Posted by: dittoburg at January 22, 2009 3:52 PM
No offense to non-human apes.
Posted by: dittoburg at January 22, 2009 3:54 PM
By the way, to the OP:
I know several people who are looking in Fort Greene right now who may be interested. Can you post more info on your rental?
Posted by: boofer at January 22, 2009 3:54 PM
While I wouldn't SCREAM IT SO LOUD, I tend to agree with Rob (and I'm a landlord). I've always FRBO'd the rental in our house. The prospective tenants are happy about no fee, I learn a lot about what they would be like as tenants from watching them look at the apartment and from the questions they ask, and I get a feel for the market. Much more info than you get distilled through a realtor ("they would be really nice tenants"). While a credit check is always prudent, every prospective tenant I've liked has checked out fine. No one needs a realtor to gain access to the market because nearly everything is on CL.
Posted by: slopefarm at January 22, 2009 3:59 PM
I am sure that if your rentals are reasonably priced, you will have no problem unloading them thru CL swiftly. Rob, etc are correct. These days, hardly anyone is going thru a broker for a rental because the fees just aren't justifiable and people don't have the money to toss out on a broker. And the old rumor that brokers had the "best" or "nicer" rentals is total BS, probably thanks to CL.
Posted by: bowl of dicks at January 22, 2009 4:03 PM
Hi Lisa,
I'm actually looking for a new 2 BR apt in the neighboorhood as my little brother (16) attends Brooklyn Tech. My present lease is up in March. I have a good job, that is not going anywhere, we are a relatively quiet duo as I work all day and he has school and track and further, we have a small cat. Please email me at tiffytiffr@gmail.com if your apt meets the above.
Thanks,
Tiff
Posted by: tiffer at January 22, 2009 4:05 PM
I assume you all have rental property then to be able to comment on this. While I did get a viable candidate from craigslist and rented an apartment to them which so far has been great, I also got plenty of people who's financial background clearly shows they have no intention of paying any of their bills until they are chased or are so bordeline financially you wonder why are they looking at your place with that kind of rent demand or how many people are actually moving in when they say it's just them or when the rent will stop coming (Month 2, Month 3..?) For this I have no time to waste and the brokers do the work for you. Some just walked when being presented with such applications and forms. One was so bold to tell me that I would not get any information on them as they only "Paid Cash" for everything. Yes "Winners". I have but one criteria and that is the ability to pay. Professional tenants do exist.
Posted by: ou812 at January 22, 2009 4:12 PM
"Has the bottom fallen out of the rental market already?"
Absolutely. Inflated economy >>> inflated rents. Deflated economy >>> deflated rents.
The collapse in rental rates is playing out in phases:
*Collapse of the broker fee market [check]
*Shopping tenant gets saavy to the reality that rents are now negotiable [in progress]
*Landlord denial running it's course (realization that you more than lose the difference between ask and offer as the months roll by in this darkening economy - just lower your rent already!) [in progress]
*Significantly lower asks [coming soon]
Tidbit: Falling rents compound the downward spiral of falling home prices because the two are directly proportional.
***Bid half off peak comps***
Posted by: Brownstones Half Off at January 22, 2009 4:13 PM
Hi Lisa,
I'm actually looking for a new 2 BR apt in the neighboorhood as my little brother (16) attends Brooklyn Tech. My present lease is up in March. I have a good job, that is not going anywhere, we are a relatively quiet duo as I work all day and he has school and track and further, we have a small cat. Please email me at tiffytiffr@gmail.com if your apt meets the above.
Thanks,
Tiff
Posted by: tiffer at January 22, 2009 4:15 PM
ou812
Your experience hasn't been mine. I've had some jokers come through but they never got to the point of filling out an app, so I never saw the financials.
Posted by: slopefarm at January 22, 2009 4:19 PM
I'm a renter as is 90% of the office I work in (mostly single young people, some families). We all agree that a broker fee is a huge obstacle to signing a lease. I'll be looking for apartments next month and I refuse to pay any sort of broker fee -- it's money down the drain for us and not worth it.
I think you should consider listing it on craigslist yourself and finding a way to run the credit checks without doing it through a broker. Your future tenants will be much happier.
Posted by: duckumu at January 22, 2009 4:33 PM
Slopefarm,
I always use a broker in PS and I never even meet the tenants until we sign the lease. I do not bother trying to judge their character up front, it never works. The nicest people who tell you how clean they are and how "Their Cats don't smell" turn out to be the worst and because of the latter I do not allow cats anymore, only small dogs. When a broker tells me they someone wishes to rent, I ask for the data and make my decision. It has worked for me. I used emotion once and it was a mistake.
Posted by: ou812 at January 22, 2009 4:36 PM
You can run credit checks yourself, or have them pay/print them out. You can pretty much collect all the information a broker does on your own. Just say you require a credit check and proof of income in your Craigslist ad.
Posted by: dirty_hipster at January 22, 2009 4:41 PM
ou
I'm not trying to pick a fight. You should do whatever works for you, and if brokers work, that's great because it doesn't cost you anything and saves you time and effort. But in going the FRBO route, I don't think I am using emotion, I think I am using judgment. I've found good tenants and they have always been happy about saving the fee.
Posted by: slopefarm at January 22, 2009 4:44 PM
If they're paying the broker $4500 then they are $4500 less able to pay you.
Posted by: dittoburg at January 22, 2009 4:48 PM
I'm going to be looking for a 1-bedroom for March 1 if anybody would like to send me some pics of their place. zachmattheus@yahoo.com
Posted by: zachmattheus at January 22, 2009 4:49 PM
I don't reccommend to anyone not use CL or post anywhere else for that matter. I have property in an other area where CL is my best option and I have used it. You get alot of responses, people make appointments and then they don't show and don't call. The process is real work and there is a reason for the fee. One perosn only sees themselves showing up and asking what is the broker doing for this money? How many propects do you have to go through before you A: Find Some on who wants it and is willing to sign on the dotted line and B: You also agree to rent to? If you don't put the work into it, you can be in for a lot of trouble. I only reccommend that you need to take the extra precaution. After all, it is a business, you have a mortagage, your insurance premiums are double/triple as non-owner occupied, your interest rates are higher for the same reason. Once you find those good tenants, be nice to them and don't get greedy because you think you can get another couple of hundred dollars.
Posted by: ou812 at January 22, 2009 5:13 PM
What I don't get is why the tenant gets stuck with the broker fee in the first place. The landlord should be paying that fee because the landlord is the one that supposedly benefits from the broker's services -- for the tenant it's an unnecessary and unwanted expense in almost all cases.
I would love if someone could clarify this for me because it has bugged me forever. That model is completely broken from the tenant's perspective.
Posted by: duckumu at January 22, 2009 5:19 PM
oh c'mon there are lots of scummy brokers who will say they have the perfect candidate, their credit cleared, everything good just to take their money. you really arent guaranteed a perfect tenant. in fact youll probably just have a more demanding tenant as they now just paid the first months rent, security, AND 15 of the yearly nut. that is a huuuuuuuuuuuuge chunk of change.
*rob*
Posted by: PitbullNYC at January 22, 2009 5:19 PM
a 1 month fee is about max for me.
and thats if the apartment is awesome.
Posted by: Santa at January 22, 2009 5:30 PM
My experience as a renter and landlord is that going the FRBO route is always the better option for non-absentee landlords. Trustworthiness is an easy hurdle to overcome as if you request a credit report, letter from employer/paystubs and reference, you can easily weed out the jokers. Moreover, tenants respect and value your decision to go without a broker, and generally end up being more respectful and upstanding as tenants. A landlord who shows he cares about his tenants and his apartment by doing it on their own garners a much better relationship with their tenant.
Posted by: saminthehood at January 22, 2009 5:32 PM
The "tenant pays broker fee" model is different place to place. When I lived in California I never saw it. New York has tended that way for years, except when times are rough, like now. I know someone that just this month got a 2 bedroom rental for $2000 in the west village, with the landlord paying the fee. Four tenants left the building at once and the landlord freaked out.
Posted by: corolla at January 22, 2009 5:32 PM
I agree with all the posters who say it's silly to use a broker when there's Craigslist. Owners can do a better job of screening than brokers.
Last time I rented, I found a nice apartment but didn't take it because of the broker. Among other things, I know for a fact he didn't run my credit or check my references but he told the landlord (who I met) that he did.
I don't know if they were running a scam together, or if a nice landlord lost a good tenant because of her broker.
Landlords, if you have to use a broker, make sure you use someone who's been operating out of a storefront for years and is licensed, not some guy who contacts you because they see your ad on Craigslist. Also consider paying the fee yourself.
Posted by: mopar at January 22, 2009 6:12 PM
ive been seeing alot of 2bedrooms in northern park slope in the 2000 range. If your apartment is nice and cheap it will get rented but if its expensive and shitty its not going to get rented anymore like it used to.
Posted by: Santa at January 22, 2009 6:29 PM
You could offer to pay the fee for to the broker instead of the tenant paying it... and I'd bet these days the amount would be negotiable. I never used a broker until recently, and have had mixed experiences with it, but in some ways it is a simpler way to deal. And I'm not defending brokers or anything, but the last time I looked two brokers that we didn't end up using spent a fair amount of effort on our behalf. I still feel kinda bad for them.
Posted by: Heather at January 22, 2009 7:11 PM
Renters be careful in using CL. I saw a rental I liked and when I wrote to the email I was told I needed to pay 40 bucks after I filled out and application. Is is possible to rent without having to pay a parisiste blood for doing nothing. I never thought I would see the day when real estate brokers would be begging for pennies. Brokers are all a bunch of parisite swines. Goodbye and good riddens to them all.
Posted by: hannible at January 22, 2009 8:08 PM
Q: Why would a landlord use a broker ??
A: To discriminate.
Race, Age, Sex, Income, Marital status, Children, Pets...u name it...be honest....i wanted a single woman who had a decent job and no pets and no children...race/age not real relevant....my rent is about 2-400 below mkt...i've had 2 tenants in 11 yrs...my story is far more common than unusual...i've lived in NYC for 16yrs...i can't tell u how many people preface "rent stories" with how special/unique their situation is relative to everyone else...how their deal is so great...sort of like those suburban people at work who lie about easy their commutes r(they r usually the ones yawning the most after lunch.)
Posted by: yanks77 at January 22, 2009 8:13 PM
hannible..the $40 was probably for a credit check don't you think?
Posted by: boofer at January 22, 2009 8:25 PM
One factor to consider in your decision whether or not to use a broker is what kind of apartment it is. An expensive family-sized apartment whose market is a relocating executive's family whose company pays the broker fee is far different than a small apartment fit for a single professional. In the past, banks who signed on lots of new employees in June might have paid brokers fees as well, and those may be your market, but not as likely in January (and are companies are even doing this anymore for new hires in this economy?)
I agree that using Craig's list is worthwhile -- you might also send an e-mail to acquaintances to let them know about the apartment since most people don't want to pay brokers fees. But I'd certainly expect rents to decline in this economy as they have in all past economies, and if you are only getting $100 less than peak, consider yourself fortunate. It's much better to have a good tenant than get top rent in any case.
Posted by: CGfan at January 22, 2009 9:11 PM
I just have a 2 family that I live in. When I go to rent the unit, I place an ad on CL with an "open house" a few nights for an 1-2 hours when I know I'll be home anyway until the unit is rented. I put my address on the ad. I do this so I don't have to answer emails, schedule appointments, make phone calls. I try to be as descriptive as possible and post a few pics. I feel that serious people will show up to see the place if there is no fee. In the past, the people who emailed me claiming to be great canidates, asking additional questions, requesting additional viewing times, never showed up so I quit responding to emails. I also charge $75 for the application fee and I check all the references. I tell people not to bother filling out the application if they don't think they will qualify, aren't serious about taking the place, the fee is for the credit check and my time and is non-refundable. I am happy to give them a copy if they want it. Photoshop makes it too easy to fake documents so I insist that I do the credit check myself.
Posted by: bqe1970 at January 22, 2009 10:41 PM
Hi Lisa.
I am an architect and I am looking for a 2 bedroom rental in Boreum Hill or nearby. I will be able to move in for March or April. Price to be in the $2000 range. It will be my wife and daughter (19 month old). If you or anyone has anything of interest, please email me at pohlmachine@yahoo.com.
Thank you.
Posted by: Liv at January 22, 2009 11:21 PM
Even if the 40 dollars were dor the credit check even though it does not state that, why should I givemy prospective homeowner my private information without me even getting a chance to see what the appartment looks like. Using this method I could pay that fee 10 times without seeing a single apartment. How about getting a credit check on the homeowners and real estate brokers? I would like to ask them if they have always been honest in declaring their income's, have they ever falsely overstated the value of a home to get a higher profit, are they in foreclosure? We all run a credit check on renters because we assume that renters are all bad disshonest people but I have seen some real characters as brokers and homeowners.
Posted by: hannible at January 23, 2009 1:43 AM
The good news is, real estate broker is going the way of used car salesman as a career. The unholy arrogance of these little bloodsuckers is now coming back to haunt them.
Posted by: Whuh at January 23, 2009 9:27 AM
One prospective tenant told me that she responded to a rent-by-owner ad on craigslist. When she showed up to the place the landlord told her that he is also a broker and she will have to pay him 1 month fee. Now that is a low life !!!
On a different note, if I place an ad on CL for a prime park slope apartment in April I will get over 200 responses. Last month I got 10! The new tenants lucked out because this is the best time to rent and they did not have to compete with others. Rent was lowered from 1900 to 1800.
Tenants state that only 1 out of 6 apartments advertised by landlords are true in their posting. Many apartments listed as being in park slope are no-where near the area. One extreme example was actually by church avenue.
Posted by: landlord at January 23, 2009 9:27 AM
"Tenants state that only 1 out of 6 apartments advertised by landlords are true in their posting."
What's the benefit in this? Do unsuspecting apt shoppers slip on a bananna peel, say "whoops" and accidentially sign the lease before realizing the truth? Or does the landlord make "them an offer they couldn't refuse", ink or brains on the lease agreement?
I mean some of these listings are way outrageous. I see some listed as Fort Greene but buried in the print it'll say Franklin Ave or Classon Ave.
***Bid half off peak comps***
Posted by: Brownstones Half Off at January 23, 2009 9:35 AM
Many out of towners looking to rent in park slope. They don't know that sunset park is not park slope. And yes, they do sign these leases. Many sign on 3ed avenue and in the 20's thinking they are living in park slope.
Posted by: landlord at January 23, 2009 10:56 AM
Hi All,
I'm the OP. Thanks for your comments. I've been using a broker to rent my apartments because when I bought my brownstone 3 years ago and rented them myself, a con-man saw me coming a mile away. He pretended to be a doctor (he wasn't even close), gave me a fake w2 and SS#, and when I asked him to send me a credit report (very bad strategy), he told me he had trouble printing it and modified it to show "low risk". All this while sweet talking me with his Ivy League non-credentials. I was totally naive and didn't follow-up on any of his claims. I had never met anyone who wore a Harvard t-shirt to try and con people! He actually paid the rent for a year, and then stopped - making up every excuse in the book to carry on the charade that he was a legitimate professional rather than a pathological liar and psychopath dead-beat loser. (For those of you on this list curious about the socio-dynamics, we're both Black, I'm female and was single at the time.) It took me 6 months to evict him (yep, 6 months of no rent plus legal fees) and it was a horrible experience. (Tip: spend the money on a good lawyer. It will save you time, i.e. rent, in the long run.) Soooo, I've been using a broker ever since to really dig into people's credit checks. That being said, I'm a little wiser than I was 3 years ago and will probably attempt a craigslisting. In addition to credit checks, it's amazing what you can learn about people on the Internet now for free. The consensus from the Forum really sounds like people aren't using brokers anymore.
As for the apartment, it's a 1 bedroom, 3rd floor walk-up in good condition with great light on Clermont between Fulton and Greene. The previous tenant was paying $1,850. More comments?
Thanks, Lisa
Posted by: Lisa FG at January 23, 2009 11:02 AM
I let my attorney do the credit check.. Money well spent.
Posted by: daveinbedstuy at January 23, 2009 11:32 AM
As for Brokers vs FSBOs, I own a two family and have used brokers for the rental. It saves me the time and effort of dealing with prospective tenants and has always resulted in a good experience from my perspective, and good tenants who have always renewed. Brokers do know the market and what the asking price should be.
When I used to rent, I hated dealing with the rental brokers, especially those who handed you a key and told you to find the place yourself, or showed you garbage that was nothing like what you wanted. But as an owner, its my preference, and I dont see the downside.
FYI - My my most recent rental started in Nov 2008, and its possible things have changed significantly since then.
Posted by: very bored at work at January 23, 2009 11:41 AM
Everywhere I've lived in NYC the landlord has phoned both my employer and my last landlord (except when I moved in with a boyfriend. I guess he figured he knew me). The internet is your friend, too. If you're really feeling paranoid, you can make sure that the "landlord reference" you're talking to actually owns the building (Property Shark).
Posted by: serpentor at January 23, 2009 12:24 PM
OP, what a story. I'm not a landlord (yet) but I gather there are services that do credit and background checks for landlords. Anyone know the name of some?
I would say only 3 percent of FRBO listings on Craigslist are legitimate. The rest are unlicensed brokers posing as owners. They use every trick in the book. They are terrible.
I have never seen a genuine FRBO listing that did not accurately state the location and other details.
Posted by: mopar at January 23, 2009 2:40 PM
The fake FRBO listings are fairly easy to spot, I think.
There are credit/criminal/background check services. I use TenantVerification.com for this. They do provide housing court records, if any, as well as terrorist watch list checks and other exotic checking.
Even so, I think you have to trust your gut to a degree and do the reference-checking yourself. Like the OP said, a lot can go wrong.
Posted by: corolla at January 23, 2009 4:51 PM
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