For most New York City renters, having to pay a broker fee—an extra cost on top of an already exorbitant rent—really stings. So if you're looking to save on upfront costs, no-fee apartments are the way to go.
Typically, a broker fee, which you pay to an agent for helping you vet apartments and navigate the rental process, ranges from an amount equivalent to 12-15 percent of a year’s rent and is paid when you sign a lease.
But with a no-fee apartment, you don’t have to pay the broker’s fee because either the landlord is covering the fee for you, or in the case of larger rental properties that handle the leasing in-house, the building’s management is waiving the fee.
Why do owners cover or waive the fee?
When the landlord covers the broker’s fee for you, it’s a concession designed to encourage you to sign a lease. Apartment owners much prefer offering a one-time freebie instead of lowering the rent for a full year.
Large rental buildings, especially high-end developments from companies like Related, are another source for no-fee apartments. With a new development, there are lots of apartments to fill—at high, market-rate rents, so owners are inclined to offer a concession. (Another concession you may find at a new development is one or two months free rent.)
Either way, you’re getting a deal—well, sort of. You may be paying less money upfront in exchange for locking in a high rent. But, hey, nothing is free, especially in NYC.
To rent an apartment in New York City, most landlords require you to earn an annual salary of at least 40 to 45 times the monthly rent. If you don't—or if you’re an international employed person, self-employed, non-employed with assets, retired, or an international student or US student—you’ll need to find a guarantor for your lease who earns at least 80 times the monthly rent and lives in New York, New Jersey or Connecticut. Or you can turn to Insurent Lease Guaranty. Accepted at more than 4,700 buildings across the city representing over 475,000 apartments, Insurent Lease Guaranty is a quick and easy way to get the apartment you want. Click here to learn more.
How common are no-fee apartments now?
Concessions are still offered in about 34 percent of Manhattan rentals, for example. But in the current rental market, high demand for apartments (people who are nervous about buying in the current economic climate are choosing to rent instead) is empowering landlords to scale back on freebies.
Another impact on concessions is a result of changes to New York’s rent laws.
While the reforms were largely aimed at rent-stabilized tenants, there are new protections for market-rate tenants that have landlords feeling squeezed.
Landlords who were collecting “last month’s rent” in advance would use that to pay the broker’s fee, but they’re no longer allowed to do so under the new rent laws, says Jaclyn Ragolia, an agent at Citi Habitats.
A new approach by smaller landlords is “to pay half of the broker’s fee and then we collect the other half from the tenant,” says Ragolia.
Large new developments still offer no-fee apartments says Ragolia.
“These newer buildings that do offer no-fee apartments often offer other concessions and have amenities so the tenants are already getting a good deal,” says Ragolia.
How can I find a no-fee apartment?
Many properties advertise no-fee apartments on the side of their buildings, and they can be found on real estate sites like StreetEasy and Zillow. NYC neighborhoods with lots of high rise developments are known for no-fee apartments, like Long Island City, the Far West Side and these other neighborhoods.
You can hit the streets and look for those advertisements or deep-dive into real estate listings, or if you want to save time, check out Brick Underground’s guide to finding a no-fee apartment and browse these tried-and-true websites.
Can't find a no-fee apartment that you love? Sign up here to take advantage of the corporate relocation rate offered by Brick Underground partner Triplemint. A tech-savvy real estate brokerage founded by a pair of Yale grads in response to the frustrating apartment searches of classmates and colleagues, Triplemint will charge a broker's fee of 10 percent of a year's rent versus the usual 12 to 15 percent if the apartment is an "open" listing (versus an "exclusive" listing where the fee is split with the broker holding the listing.) Bonus: The agents at Triplemint are a delight to deal with.
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