New arrivals in NYC are quickly overcome by how complicated the housing market is. There are many twists and turns to it, even if you’re only looking for a rental apartment. Chief among these is the difference between a fee and no-fee apartments. Any quick search on listing websites will turn up apartments for rent listed as “No-Fee” while others will make no mention of a fee at all. These are the two types of rentals available in NYC, ones with a broker’s fee and No-Fee NYC apartments for rent.
If you want to rent an apartment in NYC, you’ll need to decide between the two. Just don’t be too quick to assume the no-fee choice is the best one. As you’ll soon see, there are some downsides to it.
No-Fee New York City Apartment Guide
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What Does No-Fee NYC Apartments for Rent Mean?
To attract; apartment renters, many apartment rental sites are now advertising “no-fee” apartments. So does this mean there’s no money in it for the broker? Not always. It’s just a case of who pays it. Most rental apartments advertised as “no-fee” are represented by a broker unless listed by the in-house marketing team in a rental building. They’re not working for free. The landlord merely has offered to pay the brokers fee out of their pocket. Before you think how great that sounds, it’s worth noting that you will bear the cost of this in the form of higher rent.
The only reason a landlord might do this is that they’re having trouble finding a tenant. They’re losing money every month the apartment sits empty. When you consider that the average cost of a Manhattan apartment is $4,041, that can be a significant loss if it sits empty for months.
As such, by agreeing to pay the broker’s fee, they can fill the unit much faster. However, in high demand markets with low inventory, landlords will usually have no trouble finding another tenant quickly. That tends to put highly coveted neighborhoods in Manhattan and Brooklyn out of the no-fee game.
What is a Broker’s Fee?
In the real estate rental world, a “fee” is the cash amount you pay to the broker that helped you find an apartment for rent. Brokers make their living and what motivates them to find you an apartment once you’ve hired them immediately. In NYC, the broker’s fee can be up to 15% of the full-years lease. Might seem like an easy gig for the broker. All they’re doing is collecting a nice fee for finding a rental apartment you could have located on your own. Well, not exactly.
A real estate agent can devote themselves full-time to the task of finding a rental apartment for you. They’ll have access to exclusive listings, landlord relationships, have contacts to apartment rentals, condos, and co-ops that haven’t been listed yet and be able to do all the legwork and hard negotiating. If you don’t have time to search on your own, they make for the most natural choice.
Are No-Fee Apartment Rentals a Good Deal?
Whether they’re moving to New York for the first time or are moving from an apartment somewhere else in the city, no fee apartments often catch the attention of renters who are looking for a new place. While it’s easy to understand why this type of apartment initially seems attractive, it’s essential to be aware of why they’re not necessarily the best deal. Since we want you to be able to get the absolute best apartment for your budget, we’ve put together the following information about No fee New York City apartments for rent and several other questions that renters often have about this process.
The Reality of No Fee NYC Apartments for Rent
Although there are a few exceptions, no fee apartments are generally more of a marketing tactic than a reality. It’s common for apartments advertised as no fee apartments to be represented by a broker. In this type of situation, the broker isn’t working for free. Instead, the building’s owner is paying their fee. While that may sound like a good thing, tenants often end up bearing the cost in the form of higher rent payment.
When comparing fee and no fee New York City apartments within the same neighborhood, you will also find quite often that the no fee apartment is priced higher or than other residences with a broker’s fee. More often than not the lines between a broker fee and no fee are not as far apart, and at times there is no difference.
Since there are situations where a no fee apartment may not turn out to be the right fit for what you’re looking for, you shouldn’t automatically cross all of them off your list. At the same time, you shouldn’t limit your search to these types of apartments. Instead, you should work with a reputable tenant representative who will do all this leg work for you and help you get into the best possible apartment for rent.
Paperwork, and Guarantors
If this is going to be your first time renting an apartment in New York, you’ll likely be surprised by how much paperwork is required. While credit checks are a standard part of renting in any part of the country, most landlords will request quite a bit of additional information. Required paperwork can include a letter of employment, pay stubs, tax return, landlord reference, and bank statements. Ensuring you get everything together is another example of how tenant representation can help make your life much more comfortable.
The last question people have is whether or not they’ll need a guarantor. All depends on someone’s credit score, their job, and any other relevant information. Just keep in mind that while earning 40-50 times rent is standard for a tenant, then the guarantor will likely need to make 80-100 times that amount.
Perhaps Getting a Rental Agent is a Good Idea
If all this information has your head spinning, the good news is you’re far from being the first person to feel that way. And the even better story is if you wish there were a professional who could guide you through this entire process, that’s precise, what you can get through tenant representation.
Now that we’ve cleared up the issue of no-fee New York City apartments for rent the next most common question renters have is how much they can expect to pay a brokers fee. For a standard lease of six months or longer, 15% of the first annual rent is what you can expect.
Cons of Choosing a No-Fee Apartment for Rent
Getting a rental apartment with no broker’s fee attached sounds like a great deal. That’s the clear advantage of a no-fee apartment. But as with everything, there will be a catch. There are usually good reasons why a broker is willing to pay the brokers fee. And contacting the landlord directly; presents a few difficulties and can lead to some disadvantages.
The rent may be higher
No-fee rental apartments typically have higher rents than properties with fees. The landlord does this to cover the cost of the broker’s fee or direct marketing expenses.
It might be in bad shape
No-fee rental apartments are often in poor condition. There will likely be some wear and tear from previous tenants. Having no-fee attached is how the landlord hopes to attract tenants despite the poor health. Exceptions to this are Related and Glenwood buildings though still not as good as new condos.
You won’t have access to the best apartments
In NYC, the best apartments; are always listed by brokers. Because they are in Condo and co-op buildings. Unless you’ve got a credit score of over 700, have at least two years of tax returns and little to no debt, you’re better off going with a broker. They’ll be able to negotiate better on your behalf.
You need to do all the legwork yourself
Without a broker to do it for you; you’ll have to spend time going out to each apartment you find and inspect it yourself. Most people in New York don’t have time for this. Especially when you’re a grad student that hasn’t yet arrived in the city. You’ll also need to negotiate for the lease and may end up with terms that less than appealing. A broker can devote themselves full-time to the search and know how to negotiate to get you the most favorable lease.
Going with the no-fee option could end up saving you some money, but it could also mean spending more. It’s certainly a doable option, and there are plenty of websites available to help you find an apartment on your own. Craigslist would be ill-advised as there are scams to watch out. Although far from perfect, the sites mentioned below are the best options. Just know that you’ll need to do all the hard work yourself, and you could end up with a less than a stellar apartment. Also, pro-tip, avoid like the plague any listings that don’t include photos.
You’ll find a full list below of management companies that have no-fee apartments. Contact them and see what they have for your budget. You can always do some searching on your own and then contact a broker to see what they can offer you. Chances are they’ll find you a better apartment with a lower rent. Remember, as with everything else; you get what you pay for in NYC real estate.
No-Fee NYC Apartments for Rent Websites
No-Fee Property Management Companies
- Abington Properties (15 buildings managed)
- A.D. Real Estate Investors, Inc (23 buildings managed)
- Aimco (59 buildings managed)
- Albanese Organization, Inc (12 buildings managed)
- Algin Management (22 buildings managed)
- Applied Development Company (15 buildings managed)
- ATA Enterprises (18 buildings managed)
- Caiola Real Estate Group (6 buildings managed)
- Bettina Equities (40 buildings managed)
- Big Apple Management, LLC (26 buildings managed)
- Bozzuto Management (28 buildings managed)
- Bridgeline (6 buildings managed)
- Broad Street Development (9 buildings managed)
- Broadwall Management Corporation (9 buildings managed)
- Brodsky Organization (61 buildings managed)
- C&C Apartment Management, LLC (89 buildings managed)
- Carlyle Property Management (5 buildings managed)
- Clipper Equity (47 buildings managed)
- CoSo Apartments (98 buildings managed)
- Dermot Realty Mgmt (10 buildings managed)
- Fetner (5 buildings managed)
- Gatsby Enterprises, LLC (35 buildings managed)
- Gilar Realty (4 buildings managed)
- Glenwood Management (27 buildings managed)
- Goldfarb Properties (45 buildings managed)
- Gotham Organization, Inc. (4 buildings managed)
- Greystar (14 buildings managed)
- Hakimian (12 buildings managed)
- Halcyon Management Group (10 buildings managed)
- Harlington Realty (12 buildings managed)
- Icon Realty Management (90 buildings managed)
- Jack Resnick & Sons, Inc (3 buildings managed)
- Jakobson Properties (38 buildings managed)
- JR Properties (21 buildings managed)
- K&R Realty Management, Inc (49 buildings managed)
- Kings & Queens (63 buildings managed)
- Landmark Resources LLC (26 buildings managed)
- LC Lemle Real Estate (21 buildings managed)
- Lisa Management (11 buildings managed)
- M & R Management (10 buildings managed)
- Manhattan Skyline (15 buildings managed)
- Marquis Apartments (3 buildings managed)
- MDays Realty LLC (14 buildings managed)
- Milford Management (13 buildings managed)
- Mossanen (3 buildings managed)
- Newport Management (14 buildings managed)
- Ogden CAP Properties (5 buildings managed)
- Olnick Organization (15 buildings managed)
- Related (22 buildings)
- Rockrose Development LLC (10 buildings managed)
- Rose Associates (41 buildings managed)
- Roseland Property Company (10 buildings managed)
- Shalimar Management Corp. (7 buildings managed)
- Silverstein Properties Inc (3 buildings managed)
- Sky Management (30 buildings managed)
- Skyline Developers (3 buildings managed)
- Solar Realty Management (22 buildings managed)
- Solow Management Corporation (7 buildings managed)
- Stellar Management (75 buildings managed)
- Stone Street Properties (45 buildings managed)
- Stonehenge NYC (17 buildings managed)
- S.W. Management / City & Suburban (111 buildings managed)
- S.W. Queens Mezzanine (32 buildings managed)