Manhattan IS an Island: What you need to know for Negotiating an Apartment Rental Deal

October 7, 2009

The Numbers Don’t Lie?!?!

Don’t be fooled, It’s is impossible to gauge any real estate market in real time, especially Manhattan 2009 Rentals! I was reading an article today on the number 1 subway (the red line) about how the national apartment vacancy rate was at 7.8%, a pretty big number. What relevance does this average have on the Manhattan market?  Not much!  The Manhattan vacancy rate is 2.7 %, almost two thirds less than the national number. If you are going into negotiations with a 7.8% vacancy rate as your ammunition, you might be talking your way out of a sweet deal!

There is no question that there are some great values in today’s New York City rental market.  This market has been in a down slide since October, 2008! Apartments have already been discounted, owner paid commissions are the norm in big buildings, and there is SOME room to negotiate — but be smart! If you’re looking at numbers that include some rental complex in Connecticut or New Jersey, they’re blurring your vision.

Here are a couple of tips on how to save money:

Know the History of the building

This is a huge factor!! If a building is offering concessions like two months free, free gym membership, etc, the very best thing you can do is contact your broker and find the rental history of the building. Landlords will offer concessions to get you into the building for a number of reasons; the most major reason is that the building owes their investors so much money that the banks won’t let them reduce rents.  This is why things like free rent and owner-paid broker fees work to reduce a tenant’s overall annual cost of living.  Be warned:  at the end of lease, your free market apartment most likely increases from the discounted, incentive-based rent to a real time market rate rent one or two years down the line. Tenants might ultimately pay twice as much for these apartments.

Take the Fee Out of the Equation

There is a ton of great inventory that you will never see because you want a “no fee” rental! Think about it… why would a landlord want to pay a fee?  Because they are so nice, or maybe because your so qualified?  Sorry to break it to you, landlords are in this business to make money, and most renters in NYC are qualified! Fee apartments amortized are always less than No Fee apartments. The fee is a one time charge, which over the lifespan of your tenancy, could ultimately save you thousands!!!

Get a Pro On Your Side 

Any renter needs a professional to guide them through all of the great values that are available in today’s Manhattan rental market.  A good broker should have a bird’s-eye view of the entire market landscape:  they can help you determine not only where the landlords are offering the best incentives, but they can demonstrate how you might do better to pay the broker fee and achieve a better cost benefit for the life of your lease!
Whether the vacancy rate drops more, or it remains stable as the economy starts to recover, I will be on the front lines ready with all the information and access it takes to help you secure the best deal!

Neil Nerich can be contacted via phone 212-645-4477 or email neil[at]benjaminjames[dot]com

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