Those who live in New York know that the coveted city views and the world-class cuisine typically come with the ineludible 15% broker’s fee. It’s no surprise that many people are on the lookout for no-fee apartments and may be quick to sign on an apartment because of this fact alone. However, the apartment on a whole needs to be considered when choosing a new home, whether it comes with an extra fee or not.
All apartments are not created equal, so make sure to properly investigate the pros and cons of no-fee apartments.
Are no fee apartments really the best?
In short: Not necessarily. The term “no-fee” serves as an indication of how the property compares to the market at a given time. Developers monitor the relationship between vacancies and prices closely, and consequently decide how to best market the property. Understanding the logic behind no-fee rentals helps reveal the potential associated drawbacks.
No-fee apartments are those that may not rent as quickly if the landlord didn’t pay the fee himself. The developer’s prerogative is not to give away money, but to lower their risk and increase their opportunity by renting the vacant units as efficiently as possible.
The phrase “time is money” is highly pertinent in real estate, and the “no-fee” maneuver exists in some cases to hurry along the rental process. The developer’s profit depends on rental generated capital. When there is a steady supply of leases, developers are most successful.
When the landlord offers concessions, some of the time he may cover his cost by increasing the rent. In the end, a broker’s commission is redistributed throughout the year. Another fact to consider is that the starting base rent can easily be hiked up, as opposed to a negotiable starting rent often secured through a broker’s service.
Are no fee apartments all they appear to be?
Unless offered at new luxury developments, “no-fee” incentives can often be matched with the dregs of the inventory. Prime location and paramount apartments don’t need to self-market or self-fund. Renters looking for the best apartments appreciate a broker’s work and assistance throughout the rental process.
If your heart and budget are still set on a no-fee unit, valuable no-fee apartments can be found in new developments in growing neighborhoods such as the Financial District or Battery Park City.
If you are in the market for a new apartment, read up on the benefits and drawbacks of no-fee apartments so you can be sure to find one that best suits your needs in the long-term. Platinum Properties agents are ready to help you with your apartment search, answer any questions along the way, and guide you through the exciting process of finding your new NYC home.