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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

#511

Post by gnopgnip »

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.

That is a recent change in NY law, until last year landlords werent required to mitigate and rerent, it was on the tenant to sublet

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

#512

Post by 6f8986c3 »

chasontherobot wrote: post #496
6f8986c3 wrote: post #490

Earlier quoted context omitted.

As with most things: it’s complicated. When you sign a lease agreement, you get a guarantee that your rent will not go up during the term of that agreement. So, if you sign a lease for $1000 a month on Monday, and on Tuesday the market rent for that area spikes to $10,000 a month, you’re locked in with a lower rate. If I were a landlord in Oregon, given the above law, I would just only rent month to month. Breaking a…

That doesn't make any sense, the Oregon law works very well for the landlord in that case. Tenant is locked in at $1000/mo. 6 months in, decides they want to move. Tenant pays $1500 to break lease, and landlord can charge $10000/mo immediately to the next tenant.

Why on earth would the tenant spend $1500 to break their lease, just so they can go find a new place for $10000/month?

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

#513

Post by firestarter223 »

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…

I find that German law idiotic. Of course it costs the landlord something to hire a broker, even if the renter is supposed to pay the fee. It still eats into the overall budget of the renter, that could otherwise have gone to the landlord.

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

#514

Post by jbigelow76 »

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.

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.

I'm clutching my pearls so hard after reading this, I may have uttered a "I do declare..." and wiped sweat from my brow as well. :)

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

#515

Post by simonh »

6f8986c3 wrote: post #512
chasontherobot wrote: post #496

Earlier quoted context omitted.

That doesn't make any sense, the Oregon law works very well for the landlord in that case. Tenant is locked in at $1000/mo. 6 months in, decides they want to move. Tenant pays $1500 to break lease, and landlord can charge $10000/mo immediately to the next tenant.

Why on earth would the tenant spend $1500 to break their lease, just so they can go find a new place for $10000/month?

They’ve bought a house, moving out of state, moving in with their boyfriend, lost their job and moving in with their parents, been convicted and going to jail, etc, etc.

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

#516

Post by cto_of_antifa »

jbigelow76 wrote: post #514
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.

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. I'm clutching my pearls so hard after reading this, I may have uttered a "I do declare..." and wiped sweat from my brow as well. :)

Won’t somebody think of the landlords? With this product they might make slightly less raw profit off the backs of people who work for a living!

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

#518

Post by risyachka »

oconnor663 wrote: post #141
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…

> 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 buyi…

Sure it buys some value for the landlord, but that value is very low and can be replaced by software for 1/100 of the current cost.

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

#520

Post by robbrown451 »

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.

I would assume that if they weren't able to negotiate it with the landlord, they wouldn't accept the contract.
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