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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

#471

Post by dools »

AJRF wrote: post #302

I recently moved house. I was previously living with my friend, and we had an agreement I pay sometime before the end of the month. He gave me a contract and said you'll need this, just because when you go to the next place they will ask you for your previous contract. He found it online, it was boiler plate and we agreed verbally I pay him whenever during the month. We we're really good friends, and I lived there fo…

The problem isn’t with automated management but with economic inequality. Automating the job of property management and leasing makes perfect sense, having a system where people can be unfairly evicted and wind up homeless and jobless does not. Fortunately we can fix the real problem with some relatively simple policy changes.

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

#472

Post by azernik »

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.

They are "guaranteeing" in that they are putting themselves in high but limited liability in case they can't fulfill that "guarantee".

As long as they can find tenants for at least 6/7 (~85%) of their apartments, they're breaking even. Clearly, they think that's an easy target to hit.

(Another way to think of it: one service they provide is amortization of the risk of not filling the apartment over their entire catalog of apartments.)

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

#473

Post by caddemon »

e12e wrote: post #201
tut-urut-utut wrote: post #31

Earlier quoted context omitted.

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…

> "who hires pays" principle for brokers in the renting market basically made the renting "broker fee free" for renters. How can that work? Landlord (absent regulation) set the rents as high as they want/can get away with. What's the difference between 100/month rent + 50/month broker fee, and 150/month rent + "zero"/month broker fee?

The broker fee IME is usually an extra month of rent due at the time of signing the lease. Because in certain cities the vast majority of apartments will follow this convention, and it's not really something that will be mentioned until you're in the process of formally applying (unless you ask), I don't see it having a market effect in the same way that raising the rent would.

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

#474

Post by coding123 »

hammock wrote: post #113
unanswered wrote: post #29

Earlier quoted context omitted.

Well, it's either requiring rent to be paid throughout the entire lease term or not allowing leases to be randomly transferred to unqualified tenants. Does it really matter at that point which one GP meant?

A lease is a contract where you agree to pay throughout the entire term. That's evil? Most municipalities at least in the USA also have tenant-friendly laws on that books that mandate either or both of: a) landlords are disallowed from refusing reasonable sublease (e.g. one that passes the same credit check etc that you did) b) landlords must release you from the remainder of a lease if you leave and a reasonably sui…

In Oregon they realized how evil it was and made this law:

ORS 90.302 E

The abandonment or relinquishment of a dwelling unit during a fixed term tenancy without cause. The fee may not exceed one and one-half times the monthly rent.

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

#475

Post by coding123 »

gfxgirl wrote: post #203
coding123 wrote: post #18

Earlier quoted context omitted.

Super rampant here in CA with Craigslist. Scammer will post a rental ad for a house that is currently for sale in Zillow. You know it's a scam pretty easily, but not everyone does. If someone other than Craigslist can get in this market and do a better job, one that verifies the Lister owns the property, and there is no funny business about who gets the property, that would be excellent.

I ran into this yesterday. It wasn't entirely clear it was a scam, well to me, at first. The first clue was "sorry, no in house viewing, we had son and 2 friends die from COVID, please understand". Yes, that's a big red flag but sounded like a legit excuse to me. But, at least it got me suspicious. Next was in their email they claimed to be working for somecompany.com but their email address was soomecompany.com. Fin…

This one in Cali: I am in Philadelphia in the Military Camp, you can go by and view the inside of the house through the window, if you like it, you get back to me so we can proceed with the rentals.. then at the end of the email...

    Thanks will be looking forward to your reply.

    United State Army

    General SCAPARROTTI
For reference https://en.wikipedia.org/wiki/Curtis_Scaparrotti

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

#476

Post by conductr »

albedoa wrote: post #268
e1g wrote: post #192

Earlier quoted context omitted.

USA is a big place, but OP is talking about NYC specifically before COVID. At that time you were liable for the full amount until the end of the lease. Landlords could sit on empty boxes and sue you for the entire amount. Whether they want the hassle is up to them, but you couldn't compel them to do anything. It does sound unfair, but see here for supporting sources https://www.nolo.com/legal-encyclopedia/tenants-rig…

Your own link says that NYC landlords are required to mitigate damages by seeking a new tenant.

They could put an ad on Craigslist and deny all applicants or get non either way sought a new tenant.

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

#477

Post by CydeWeys »

conductr wrote: post #476
albedoa wrote: post #268

Earlier quoted context omitted.

Your own link says that NYC landlords are required to mitigate damages by seeking a new tenant.

They could put an ad on Craigslist and deny all applicants or get non either way sought a new tenant.

And doing so would be illegal, and you could sue them for it (and win). It's pretty easy to determine if a landlord is actually trying to rent out a given apartment -- just have your friends apply.

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

#478

Post by CydeWeys »

crazygringo wrote: post #142
e1g wrote: post #129

Earlier quoted context omitted.

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 exis…

> Obviously you're not going to use it if your landlord doesn't allow subleases,

In many jurisdictions, including New York, the law requires that landlords allow subleases. Tenants have a lot more rights than you might think.

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

#479

Post by coding123 »

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…

All states should operate like Oregon that stipulates the maximum lease break fee of 1.5 months. I think that's totally fair considering it's been a landlords market for the past 20 years. There's no reason in any state to keep someone on the hook for potentially 12 months when that landlord can just tell someone "hey we're still advertising it but we haven't found anyone yet". By the way, if any of you find yourself in that position, have your parents email them and ask for a unit - if they say they have none and are keeping you on the hook, you may be entitled to 2 months rent back in court.

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

#480

Post by CydeWeys »

danenania wrote: post #334
crazygringo wrote: post #310

Earlier quoted context omitted.

It doesn't seem that crazy to me. They say: > We were able to prove that we could make the financials work so long as we were able to fill the apartment within around 45 days of taking it over. They're prescreening apartments/leases so they're not going to take on an apartment they can't turn around in a month. And honestly, modeling NYC rental supply and demand according to a number of factors (neighborhood, price,…

"Why would they ever say no to a qualified tenant?" I agree with the rest of your comment, but in my experience landlords in hot markets can be pretty capricious. If they know they'll have a steady stream of applicants, many will definitely reject qualified tenants based on personal whims or to hold out for someone they see as "more" qualified or more likely to stay long term. That said, as long as the apartment stil…

That's not rejecting (all) qualified tenants though so much as they are merely using some kind of algorithm to pick one of the many prospective qualified tenants. They can only choose one anyway, and FIFO is not necessarily the best strategy.

So a better way to phrase the question would be "Why would they ever say no to all qualified prospective tenants?"

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