Renters getting perks in soft real estate market
Photo credit: Phil S. Kropoth | New York, New York: Nick Parisi (left) and Greg Wagner (right) lounging in the living room of their new apartment at the Chesapeake. The landlord of their building decided to cover the broker fees costs typically paid for by the tenants as the landlord has difficulty renting apartments.
Renters of New York, rejoice.
For this first time in a long time, rents are either holding steady or falling in Manhattan, signifying a broader weakness in the city's rental market, observers said.
What's more, many landlords throughout the city are getting creative (if not desperate), agreeing to pay broker's fees, or giving away the first month's rent free; sometimes free parking, a gym membership or moving expenses are thrown in.
"Last year at this time, there was no such thing as concessions like these," said David Calderazzo, a broker with Chelsea-based Luxx Realty.
Calderazzo found an apartment for roommates Nick Parisi and Greg Wagner. They had their broker's fee paid for when they moved into a converted two-bedroom in The Chesapeake, a luxury building on the Upper East Side. Their rent? $3,300 a month.
"The upfront costs of moving are usually the most painful," said Parisi, 25, an interactive producer who moved into his new digs earlier this month. "With first month's rent, security and the broker's fee, it can really break you." The landlord sealed the deal when he said he would pay the $1,645 broker's fee.
Circumventing a broker would have been a way for Parisi and his roommate to get an even better deal, according to Daniel Seron, leasing director of The Chesapeake.
"If a person comes is on their own -- without a broker -- we're more apt to give an incentive," Seron said, because that means there is no broker to pay and the deal can go directly to the tenant.
Figures from Citi Habitats show apartment prices largely steady compared to last summer. The Real Estate Group of New York found signs of declines in most categories, with two-bedrooms in non-doorman buildings dropping 5 percent to $3,968.
Yuval Greenblatt, a rental expert with Prudential Douglas Elliman Real Estate, said he's seen the most incentives from landlords of larger buildings who want to keep all their units occupied. Also, landlords of newer buildings are giving deals to fill their units quickly.
In Brooklyn, Andrew Friedman, a broker with Halstead Property, sees a similar trend with the large apartment buildings there, but independent owners of brownstones and smaller dwellings are negotiating differently.
"Perks are being given by the major buildings, major landlords. They'll pay [the broker's fee]," he said. "Mom and pops are not. They are giving rent reductions."
Greenblatt's take on the market is that renters will continue to have an advantage.
"There's a greater breadth of apartments available at this time of year, unlike in years past," said Greenblatt. "It means more choices for renters."
Tips for Renters
Know your stuff: Find out how long the property has been on the market. The longer it's been up for grabs, the more likely you are to get a special deal.
Speak up: It never hurts to ask if a landlord would be willing to offer a place rent-free for a month. The worst they can do is say no.
Hire a broker: If you're shy, it might be best to find a professional who can do the talking for you.
Consider a new building: Landlords eager to fill up empty units might be open to big concessions.
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