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We replaced rental brokers with software and filled 200 vacant apartments

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Re: We replaced rental brokers with software and filled 200 vacant apartments

#141

Post by oconnor663 »

tut-urut-utut wrote: post #31
cde-v wrote: post #6

Would love something like this to kill (or at least severely maim) the broker industry in NYC. 0 value added at the cost of 10-15% of yearly rent.

The assumption that software can solve this problem is simply wrong. It's the regulation change that needs to happen if you don't want that renter pay the broker "services". For example, a new law in Germany to apply the "who hires pays" principle for brokers in the renting market basically made the renting "broker fee free" for renters. Previously, the landlords would hire a broker that needed to be paid by the rent…

> Why not, it doesn't cost them anything

It can't be quite this simple. If your renter is paying $X to you plus $Y to your broker, then their willingness to pay for the apartment was at least $X+Y, and you're leaving at least $Y on the table. In theory there should be a lot of market pressure to shrink Y. So the question becomes, what transaction costs are getting in the way of that? Or maybe, is the $Y actually buying something that's of value to the landlord?

Re: We replaced rental brokers with software and filled 200 vacant apartments

#142

Post by crazygringo »

e1g wrote: post #129
benmanns wrote: post #111

We used this pre-COVID to get out of a Brooklyn lease and had a fantastic experience (back when it was Flip Instant). Flip basically charged 1 month rent and guaranteed a fill or they'd pay the rest (6 months) of my lease. Compared to our landlord who wanted 1.75x rent, up to 2.75x rent if not filled immediately, after significant negotiation. Hiring a broker myself would have likely cost 1x rent or more anyways with…

The landlord is under no obligation to accept anyone this service finds, so this startup guarantees an outcome they cannot control. It might be a way to build awareness and goodwill, but they are burning VC capital to offer a service that is either fundamentally unsustainable or mispriced.

Obviously you're not going to use it if your landlord doesn't allow subleases, and landlords are also usually pretty upfront about approval requirements for a sublease.

I've never heard of a landlord not allowing a subletter to convert to a full lease upon original lease expiration.

I mean, the alternative is to forego a month or two of rent while you find a new tenant. Unless there's a horrible problem with the existing subletter's credit, but then they probably wouldn't have gotten the sublease in the first place.

I'm not saying it's never happened, but it's going to be rare. I don't really see anything unsustainable or mispriced about this at all. There are already other companies doing it as well in NYC, e.g.:

https://doorkee.com/

Re: We replaced rental brokers with software and filled 200 vacant apartments

#143

Post by EricE »

analyte123 wrote: post #107
cde-v wrote: post #6

Would love something like this to kill (or at least severely maim) the broker industry in NYC. 0 value added at the cost of 10-15% of yearly rent.

If evictions didn’t take 3-6 months minimum in NYC (even pre-COVID), landlords could afford to be a lot less picky about who they rent to. Brokers or other middlemen also benefit the landlord by keeping the landlord at arms length from tenant selection and therefore possible discrimination lawsuits.

Yup. And people wonder why landlords are so picky...

10 years ago I would have entertained owning rental properties. I'm so glad with todays climate I didn't go down that path!

Re: We replaced rental brokers with software and filled 200 vacant apartments

#144

Post by lotsofpulp »

tcbasche wrote: post #131
lotsofpulp wrote: post #85

Earlier quoted context omitted.

How would one automate away the fixing of toilets and performing routine maintenance?

I don't think you would (and that would be a terrible idea), more the 'organising' and booking of those maintenance items. I can count more than I'd like to the amount of times I've had double-handling, miscommunication and downright rude behaviour from rental managers trying to either refute that you need maintenance, call the wrong person or don't chase anything up and get things fixed. Submit maintenance on an app…

My point is automation is not going to fix the problem of an owner who is trying to squeeze every last cent of profit by skimping on maintenance, and hiring rude rental managers, or not paying enough for qualified people to come fix the problem.

Re: We replaced rental brokers with software and filled 200 vacant apartments

#145

Post by baby »

paxys wrote: post #115
standardUser wrote: post #108

Apartment hunting is the most inefficient "purchasing" decision I have ever had to make, and the one most likely to end up with a severely sub-optimal outcome. There's some good ideas here that would at least facilitate efficiently viewing more apartments. But there's still so much extremely basic information that potential renters either cannot get about a unit or have to jump through hoops to get. Noise issues, pes…

During my apartment search in San Francisco I found that it was basically impossible to know whether a unit was covered by rent control or not. You'd have to explicitly ask the landlord, and even then they'd be cagey about it.

I just moved to SF and I just used craigslist and always asked if it was rent controlled in my intro mail. What’s the point of visiting a place if it’s not?

Re: We replaced rental brokers with software and filled 200 vacant apartments

#146

Post by WaitWaitWha »

How will this system work for those - who do not have a smart phone, - who do not have a smart phone with Biometric identity verification, - who do not have a credit card to provide?

If I was landlord, I would definitely what to automate everything. But, this feels like it would exclude people who cannot fulfill all of the above.

Re: We replaced rental brokers with software and filled 200 vacant apartments

#147

Post by lotsofpulp »

BoysenberryPi wrote: post #132
lotsofpulp wrote: post #85

Earlier quoted context omitted.

How would one automate away the fixing of toilets and performing routine maintenance?

Is this not already automated? I log into my apartments tenant portal, file a maintenance request, and tomorrow there's a dude at my door to fix my stuff.

Yes, my point was that the problem of a penny pinching owner trying to skimp on maintenance will not be solved by automating the maintenance request system.

Re: We replaced rental brokers with software and filled 200 vacant apartments

#149

Post by crazygringo »

an_opabinia wrote: post #76
literallycancer wrote: post #33

Earlier quoted context omitted.

So the landlords just make the rent more expensive to account for having to pay the broker, what changed?

> So the landlords just make the rent more expensive to account for having to pay the broker, what changed? Nothing. Clearly brokers are doing something or else people wouldn't pay for them. My theory is the broker fee has positive selection for wealthier tenants, which for every property - low or high rent - makes for an economically better tenant. Raising the rent has the same effect. We care that there's cheap ren…

> Clearly brokers are doing something or else people wouldn't pay for them.

They were, pre-internet. It actually made sense then in NYC with such complicated and massive amounts of inventory.

They don't make sense anymore. The only reason they still exist is because lazy landlords just want to stick with the system they've always known, because it feels "free" to them. In reality they get lower rents, but that's harder for them to see. And it's a problem of coordination -- as long as most other properties use brokers, you really don't have a reason to change.

The slow increase of no-fee listings has changed that. But it's still slow, and a lot of it is new buildings. It's hard to get landlords who have done things the same way for 40 years to change.

Re: We replaced rental brokers with software and filled 200 vacant apartments

#150

Post by rembicilious »

e1g wrote: post #129
benmanns wrote: post #111

We used this pre-COVID to get out of a Brooklyn lease and had a fantastic experience (back when it was Flip Instant). Flip basically charged 1 month rent and guaranteed a fill or they'd pay the rest (6 months) of my lease. Compared to our landlord who wanted 1.75x rent, up to 2.75x rent if not filled immediately, after significant negotiation. Hiring a broker myself would have likely cost 1x rent or more anyways with…

The landlord is under no obligation to accept anyone this service finds, so this startup guarantees an outcome they cannot control. It might be a way to build awareness and goodwill, but they are burning VC capital to offer a service that is either fundamentally unsustainable or mispriced.

Are you sure about that? It looks to me like they check the current lease for subletting stipulations. It’s literally the first step under “Sublet your place” on the website.
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