04 Dec New Apps That Make Renting In NYC Much Easier
Two-thirds of New Yorkers rent, and yet the city has no central listing service. Apartment seekers must cull information from myriad websites, sorting viable listings from bogus ones. Unlike buyers who partner with a real estate broker dedicated to their search, renters tend to juggle multiple brokers, frequently meeting them to get access to an apartment they have found on their own.
For this, renters pay the broker a hefty fee — generally around 15 percent of the annual rent, which for the median rent of roughly $3,400 means a fee of $6,120. A renter looking for a roommate must decide if a total stranger is a sane and safe match. And if a tenant decides to break a lease, the costs can be staggering.
The new services aim to ease the pain. One, Flip, formally started on Friday, offering tenants a novel way to break a lease, an albatross for anyone who unexpectedly needs to move. Thus, it also helps people rent the homes of these departing tenants.
“The space for finding and renting apartments in New York has been so ripe for innovation for so long,” said Ben Killen, 34, a graphic designer who moved into an apartment in Crown Heights, Brooklyn, last month that he found through a test version of Flip. “Flip is one of the first things I’ve come across that has really changed the landscape and really empowered the renter.”
New York State law requires landlords to let you out of your lease with 30 days’ written notice if you provide a qualified replacement tenant.
A tenant using Flip who wants to break a lease posts a description and photographs of the apartment online. (The company will even send out a photographer.) Once the tenant finds a potential new renter, Flip provides a report detailing the applicant’s credit history, salary and education. The would-be lease-breaker can then approach the landlord with a qualified alternate renter.
In the case of Mr. Killen, the management company dissolved the previous tenant’s lease and offered Mr. Killen a new one for $1,450 a month for the one-bedroom, a $50-a-month increase.
TF Cornerstone, which owns and manages 6,500 rental units in the city, recently began recommending Flip as an option for its tenants, about 1 percent of whom ask to break a lease each year.
“We’re living in a way that’s much more transient,” said Susannah Vila, 30, the chief executive officer of Flip. “We constantly want to be switching neighborhoods, switching houses, switching apartments, but that doesn’t fit the way lease terms exist.”
Breaking a lease can be expensive. A renter can lose a security deposit or be left on the hook for months of remaining rent. Flip offers a marketplace where tenants can free themselves of a lease, sell it or pay somebody to take it over. In one listing, the tenants of a $4,600-a-month West Village one-bedroom asked $550 for the privilege of taking over the apartment. Flip charges the departing tenant $150, or $350 to guarantee the lease will be flipped in two weeks.
To meet that two-week deadline, Flip will professionally clean the place and stage it with decorative vases and lamps and contemporary furniture, if yours is dated. Applicants pay $50 for the credit and background check.
“A lease shouldn’t be a burden, it shouldn’t be a liability,” Ms. Vila said. “It should be an asset.”
Another website, Padspin, which started in January and overhauled its website on Thursday, also helps tenants profit from their unwanted leases. Tenants post their apartments on Padspin, providing a description that is often more colorful than a typical broker’s listing. “I’ve lived in this building for three years and I’ve loved every minute of it,” a listing for a $2,100-a-month one-bedroom on the Upper East Side reads, adding that the Pony Bar and Bar-Coastal are nearby.
If another user of Padspin rents the apartment, Padspin pays the departing tenant a fee based on the rent, starting at $150. Renters pay a fee starting at $300 if they rent an apartment through Padspin. With a click of a mouse, an apartment seeker can sign up for a viewing on a schedule set up by the current tenant. By encouraging renters to post apartments directly, Padspin circumvents traditional brokers, reducing the fee to incoming tenants.
“There is an entire untapped resource, which is current renters,” said Jeff Segal, 35, who founded Padspin with Brandon Beveridge, 34.
Both Padspin and Flip depend on landlords’ agreeing to a plan that their tenants unexpectedly spring on them. A landlord might not be pleased to learn that his or her apartment has been posted online, let alone that the tenant is departing early.
Prospective renters are also at the mercy of the tenant, who could mislead them or the landlord. If the outgoing tenant does not stick to the letter of the law, a new arrival could land in a precarious or illegal arrangement, potentially losing the apartment after he or she moves in. Flip helps smooth the process by providing users with information about their legal rights and offering them guidance about how to speak with the landlord.
Even if the rules are followed, there is no guarantee that the landlord will comply willingly.
“There is a general conservative tendency among landlords,” said Jake Elghanayan, a vice president of TF Cornerstone. “Why give up what you have?”
Although the landlord is required to let a tenant break the lease if the tenant finds a qualified replacement, he or she could claim that the candidate is not up to snuff. In that case the tenant’s recourse would be to take the landlord to court to prove otherwise — or move out and hope the landlord does not come after the remaining rent.
“There are all sorts of machinations that owners come up with to justify” rejecting a replacement, said Bradley S. Silverbush, a partner with the law firm Rosenberg & Estis. “The landlord will find a way to say ‘No.’ ”
But the new sites for renters are hoping that more landlords will be amenable than not, particularly if the departing tenant has done good legwork.
“Some owners welcome an assignment to a creditworthy tenant,” said Sherwin Belkin, a partner at the law firm Belkin Burden Wenig & Goldman.
Both Padspin and Flip also handle sublets. For Steven Sirko and Jessica Rutledge, both 25, subletting from a tenant who had posted on Padspin was seamless. Ms. Rutledge fell in love with the exposed brick walls and new kitchen finishes of a Washington Heights two-bedroom for $2,200 a month.
These new services might serve a niche, but the relentless forces driving the city’s rental market remain unchanged: Housing is expensive and hard to find. The vacancy rate in Manhattan was about 2.3 percent in October, and the median price for a rental apartment in the borough was $3,391 a month, according to a report by Douglas Elliman. And, brokers say, the rental process is unlikely to change, even with a clever new website design.
“I appreciate the ingenuity, but I haven’t seen many of these companies take hold,” said Gary L. Malin, the president of Citi Habitats, a New York brokerage that specializes in rentals. “Because the system, as it is now, works.”
Even the seemingly draconian broker fees make sense, Mr. Malin said. The broker fee pays for a trained professional supported by a back office staff that files paperwork and vets listings. Despite what many renters believe, “no one’s job is simply opening a door,” he said.
Whether the new companies can grow by charging a fraction of what brokers charge remains to be seen. “The reason nobody has been able to make this work is nobody has been able to make money,” Ms. Vila said.
Joe Charat, the chief executive officer of Naked Apartments, a listings website that was founded in 2010, said, “Since we’ve been around, we’ve seen the graveyard of companies trying to build for the New York City renter.”
But for some New Yorkers, particularly those who are new to the city, figuring out how to navigate the complex and decentralized system can be overwhelming. “Things have gotten worse” in recent years, said Amit Patel, 34, a founder of Quo, a service that began operating in New York in June. “More onerous.”
For $90, Quo users are paired for up to 60 days with what the company calls a “concierge” who serves as part personal assistant, part city guide. New users fill out a questionnaire that asks them about where they work and shop, their hobbies and their interests. Communicating over phone, email and text, the concierge matches them with neighborhoods and schedules viewings of apartments.
“My job is to know about them on a deeper level than just their budget and the number of bedrooms,” said Janine Shea, 28, a Quo concierge.
When Donna Grigonis moved from Cleveland to New York, she did not hesitate to pay for the service. “I did it really quick without really thinking about it,” said Ms. Grigonis, who is 28 and works as a corporate consultant. “I thought it was too good to be true.” Continue reading > > >
via NYTimes | Lead image: The New York Times