"Net Rent"
I’ve recently looked at several apartment buildings in Brooklyn where the advertised rent is specified as “net rent.” Meaning, they say they give you 1 month free rent, but then they factor that in to the listed rent – for example, let’s say the rent is listed at $2700, but if you sign a one…
I’ve recently looked at several apartment buildings in Brooklyn where the advertised rent is specified as “net rent.” Meaning, they say they give you 1 month free rent, but then they factor that in to the listed rent – for example, let’s say the rent is listed at $2700, but if you sign a one year lease, they give you 1 month “free”, so the “out of pocket” (actual) rent is $2,925. Is this some new thing?! Is it me or is the “free” rent then not really free? I think this is shady. Do others agree, or am I overreacting? I have never seen this before and I’ve lived in NYC for nearly 20 yrs.
wtf is a an “automatic unegotiated legal increase?”
Petebklyn is right, it’s been a number of years since I’ve looked for an apartment. And duckumu is right too when saying “of course it’s shady – these are NYC realtors you’re talking about. scum of the earth.” LOL. At any rate I still don’t like this practice and I won’t be moving into any of the buildings I looked at that had the rent structured this way, but yeah, I realized a long time ago that no matter if you’re paying fee or no fee, “free” month rent or not, you are going to pay one way or the other, whether it’s up front or down the line! C’est la vie in NYC.
yes you are overreacting because its been going on for that long. “free” rent, and the resulting year 1 “net” rent, is preferable to LL’s who can get away with it (as opposed to just a lower monthly rent) because after the lease is up there is a automatic un-negotiated legal increase (by a factor of whatever % you received “free”).
could be a host of potential reasons as to why, but as a renter would not be my cup of tea. i would imagine only desirable properties /locations could get away with it.
This is common practice even in good markets for commercial space. Tenants typically get some sort of free rent period plus cash towards fitting out the space. Both of those “concessions” are amortized over the life of the lease to get your net effective rent.
In my very first NYC apartment (a new development on Roosevelt Island) we got 2 months free and $2000 cash for signing a 2 year deal. This was years ago.
also, when i was looking at buildings that did this I found the developer typically advertised using the real rent. it was brokers who were showing the building who would advertise the net effective rent on sites like Craigslist (typically misleading)
It’s not new by any means, but it’s common when new buildings are opening – and it’s the developer, not the broker, who decides about “net rent.” Ditto “no fee” – there’s always a fee, it’s just a question of who pays. That “no fee” apartment would probably be $100 -$200/month cheaper if you paid the fee up front.
duckumu nailed it. you essentially sign a 12 month lease for the 2925 – and the management company puts an ‘early occupation rider’ in your lease – letting you move in early for free.
keep in mind the ‘free months’ are typically the first or last month – so don’t sign a lease thinking you can afford the net-effective, since you likely will need to budget for the full rent amount.
of course it’s shady – these are NYC realtors you’re talking about. scum of the earth.
i think this trend picked up steam in the past few years because newly constructed buildings wanted to attract new tenants, but couldn’t legally lower their rents because of their financing conditions. so they offered a few free months of rent to get around that. of course, when the lease comes up for renewal, that ‘free rent’ deal is probably gone and the renter ends up having to pay the full price after a year 🙂
if never seen before, you haven’t been looking. Common when rental market is weak and in new buildings trying to ‘rent up’.