Fee vs. No Fee Apartments
If you’ve ever rented an apartment or a house, you’ve probably heard of a broker fee. Depending on the area you are renting in, you may find different rates. For example, rental brokers in New York charge an average of %10 against the year’s rent. When renting a Boston apartment, brokers will charge a slightly lower amount equal to one month’s rent. Regardless of where you ending up planting your rental roots, there will be broker fee involved. Let’s clear up some common misconceptions about “no fee” apartments.
It’s a good bet that most renters would like to avoid paying a broker’s fee. Most brokers, on the other hand, would agree that they enjoy being paid for their work. The rub here is that nothing is free. So what is a frugal renter to do? Most will ask to rent a “no fee” apartment. What is important to note here is that there is still a full fee being paid to the broker on this apartment…it’s simply being paid by the landlord. This isn’t out of the owner’s charitable nature but a result of supply and demand in the rental market. So what does this mean for you as a rental client?
What I’m getting at is that it’s important to understand where that fee is coming from and why. Let’s assume that the rental market in your area is at a pretty neutral. In this situation, the nicer apartments will most likely be renting with the tenant paying the fee as they are naturally in more demand. Less desirable units or properties in less desirable areas may be renting with the fee paid by the landlord. Of course, there might be some room to negotiate a partial fee paid by either side, but you can bet that your broker won’t be taking any money off of their fee. In this scenario, your choices aren’t terribly limited when searching only “no fee” apartments, but you are certainly missing out on the cream of the crop.
Let’s switch the scenario up a bit. Let’s assume that the market is very demand heavy so the scale is tipped heavily in the landlord’s favor. If you are searching only “no fee” apartments, you may find yourself with only a couple of options. In fact, if you are looking for some specific features that would make a rental more desirable, you may have no options at all. Of course, this can vary greatly depending on your market, but it’s the norm in most of the U.S.’s major cities. It’s important to bear this in mind when relocating from a rural area to a big city. Renters can be quite sticker shocked when they find out what goes into renting an apartment in a new area.
Be prepared for everything that goes into renting a home before you make your first visit. Do your research by reaching out to an experienced real estate agent and asking them to walk you through the process soup to nuts. Know what you should expect to pay for what you want. Know all of the fees involved. Knowledge is golden when relocating to a new area. Talk to an agent today and you’ll be equipped to make an informed decision with as little stress as possible.