Want To Disrupt An Industry? Try Actually Working In It First
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Re: Want To Disrupt An Industry? Try Actually Working In It First
#2To me, broker fees in NYC seem so crazy. Can someone justify them? Is opening up a few doors really worth 3k?
Re: Want To Disrupt An Industry? Try Actually Working In It First
#3Hey, this is Lee from RentHop.
One thing that isn't very clear from the writeup: we went through a LONG trough of sorrow before finding our current pivot. That's a story for another day...
Re: Want To Disrupt An Industry? Try Actually Working In It First
#4To me, broker fees in NYC seem so crazy. Can someone justify them? Is opening up a few doors really worth 3k?
Funny, that's exactly what I thought 3 years ago...
I think the root of the problem is there are too many available apartments but most of them are a waste of your time to view. A great broker previews every listing and only shows the best deals.
Similarly for the landlord, most renters who come see the apartment will not take it, so having brokers do the showings saves the landlord a lot of time and effort.
Re: Want To Disrupt An Industry? Try Actually Working In It First
#5To me, broker fees in NYC seem so crazy. Can someone justify them? Is opening up a few doors really worth 3k?
Funny, that's exactly what I thought 3 years ago... I think the root of the problem is there are too many available apartments but most of them are a waste of your time to view. A great broker previews every listing and only shows the best deals. Similarly for the landlord, most renters who come see the apartment will not take it, so having brokers do the showings saves the landlord a lot of time and effort.
... but most of them are a waste of your time to view
(I'm coming from a rental environment where every available apartment gets 20 applicants, no matter how bad the place looks.)
Re: Want To Disrupt An Industry? Try Actually Working In It First
#6To me, broker fees in NYC seem so crazy. Can someone justify them? Is opening up a few doors really worth 3k?
Funny, that's exactly what I thought 3 years ago... I think the root of the problem is there are too many available apartments but most of them are a waste of your time to view. A great broker previews every listing and only shows the best deals. Similarly for the landlord, most renters who come see the apartment will not take it, so having brokers do the showings saves the landlord a lot of time and effort.
> A great broker previews every listing and only shows the best deals.
But that's exactly the problem -- the best deals get taken on the spot. Luck, not a good broker, makes you the first one in. And in the end, finding a good apartment, and finding a good broker (with that kind of access) are equivalent problems.
In NYC last year it took me almost 3 months to find a decent apartment. I found the broker on Craiglist (of all places), he pulled a bait and switch on the apartment he'd listed, but it turned out to be a switch for the better. I was the first one who ever saw the apartment, because it wouldn't even be officially listed until the next day, but he was friends with mgmt, and I said yes on the spot. I grudgingly paid the broker's fee, despite only having spent 20 min with him. But I'd already met with probably 15 different brokers (some of them just horrible) showing 25 different apartments (most of them just horrible) before that. In the end, it's certainly not like any broker saved me any time or money. I just kept at it until I got lucky -- most apartments, esp. the good ones, just seem to come with brokers "attached" that you're required to use, and very often exclusive brokers, which means it's not like any other broker has access to them anyways.
Re: Want To Disrupt An Industry? Try Actually Working In It First
#7Can't agree more.
Re: Want To Disrupt An Industry? Try Actually Working In It First
#8New York real estate is a system. You have to learn the system to hack it.
A lot of real estate start ups are trying to "Avoid the Broker." The system isn't as broken as we may think. Landlords enjoy minimal vacancy. Brokers get paid generously. Tenants find apartments.
Complaining about a 15% broker fee is like complaining about the gas for your Lamborghini.
Re: Want To Disrupt An Industry? Try Actually Working In It First
#9Earlier quoted context omitted.
Funny, that's exactly what I thought 3 years ago... I think the root of the problem is there are too many available apartments but most of them are a waste of your time to view. A great broker previews every listing and only shows the best deals. Similarly for the landlord, most renters who come see the apartment will not take it, so having brokers do the showings saves the landlord a lot of time and effort.
> A great broker previews every listing and only shows the best deals. But that's exactly the problem -- the best deals get taken on the spot. Luck, not a good broker, makes you the first one in. And in the end, finding a good apartment, and finding a good broker (with that kind of access) are equivalent problems. In NYC last year it took me almost 3 months to find a decent apartment. I found the broker on Craiglist…
Brokers are compensated for their market knowledge, not just opening doors. The fast that he was "in" with the management company is hugely valuable, and you were able to take advantage of that. 15% is a lot of money, but brokers meet tens of clients each week that don't rent with them, so they are compensated for that low hit rate as well.
And yes, many apartments are exclusive so you have to pay a full 15% fee (split between the broker who has the listing and your broker).
You could have the greatest collection of listings in NYC and still not solve the "rental issue" because you'll always have landlords that only work with certain brokers, exclusives and apartments that are rented on the spot (with no real-time updates). It is nearly impossible to get a real-time feed of data. I've been in the business a year now and I've seen apartments get rented as I was showing my [interested] client the gym. I've showed up to apartments with clients and, embarrassingly, found out that they've been rented between the time I called to make the appointment and the time I showed up.
The entire system is outdated, and the real fix is one that incorporates brokers to make it easiest for clients to rent.
Re: Want To Disrupt An Industry? Try Actually Working In It First
#10Hey, this is Lee from RentHop. One thing that isn't very clear from the writeup: we went through a LONG trough of sorrow before finding our current pivot. That's a story for another day...
But since this last pivot, year over year growth is ~10x! You guys are an example of sticking around long enough and trying enough things that one's finally catching good traction. Congrats Lee, well deserved :)