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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

#531

Post by kangaroozach »

colinmhayes wrote: post #296
tenpies wrote: post #225

Earlier quoted context omitted.

Spoiler: the landlord is just passing that cost to the tenant. It's like in Canada where tenants can hire a broker for "free" to find a rental. However the broker just collects 1 month rent from the landlord. Do you think the landlord just absorbs the cost? No, the quoted rent was just 8.4% higher when the broker mentioned he was a broker.

Landlords can't pass costs to tenants. The rental market is completely supply inelastic. Landlords are already charging the maximum renters are willing to pay.

Landlords derive their revenue from rent. That’s it. And they aren’t in the business of losing money. So one way or another it comes out of the renters pocket.

Its like when a broker sells a house and says the seller pays the fee. In reality the buyer is the only source of money in the deal so they are effectively paying the fee.

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

#532

Post by listenallyall »

tdeck wrote: post #523
caddemon wrote: post #505

Earlier quoted context omitted.

The agent isn't the one doing the connecting, that's my point. Most landlords I know "write" their own listings using a standard template and reusing old photos. Circulating this is trivial, especially in a hot housing market. A few of the landlords I know are older and will pass the info to an agent to paste into popular sites. But I'd hardly call that "connecting" and certainly not worth thousands of dollars. Addit…

This whole discussion is so bizarre to me, since I've only been a tenant in the SF Bay Area. We don't seem to have brokers here, or at least I've never heard of them. If the landlord pays a property manager or realtor to show the place, that's, on their end and not an additional fee (in fact, non-refundable deposits are illegal in SF). Some people who are used to this broker system seem to assume it *must" be adding…

> it *must" be adding some value but I can attest that it doesn't

And yet, landlords keep using it. A $2500/month apt in NYC will cost $34,500 the first year -- but only $30,000 goes to the landlord. Can you help explain why a landlord would freely give up $4500 (standard 15% fee) in potential revenue?

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

#533

Post by kangaroozach »

koolba wrote: post #263
ipqk wrote: post #234

Earlier quoted context omitted.

Yes, but the landlord can find cheaper brokers, or do it themselves to save money. There's now an efficient market. When the burden is paid by the renter, there's no efficient market because renter has no choice in the broker and the owner doesn't care.

Either way the renter is paying the cost and the landlord is losing a chunk of the spread. It’s no different than the ridiculous notion that “ the seller pays broker’s commission ”. It’s baked into the price and the buyer is still paying it, otherwise a home would cost X% less.

EXACTLY! How is this lost on so many people? The buyer is the only source of funds, so any cash paid to the broker effectively came from the buyer.

The National Association of Realtors is a huge political lobby that works to perpetuate the racket.

Compass started as Urban Compass and wanted to distrupt the racket! But eventually decide to join in on it and become a VC backed brokerage with better “technology”.

No one has yet been able to educate consumers on the insane mismatch between value and price among RE brokers.

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

#534

Post by konschubert »

coding123 wrote: post #479
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 Germany, the tenant usually has a 3 month termination notice requirement.

The landlord just CANT terminate the lease, ever. (Unless he is going to live in the place herself or the tenant stopped paying. And even then, it takes a long time to get a tenant out.

It works just fine.

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

#535

Post by wanderer2323 »

allset_ wrote: post #525
coding123 wrote: post #479

Earlier quoted context omitted.

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 Seattle (a couple years ago at this point) the highest lease break fee I saw was 1/2 month which already seemed quite high to me. 1.5x seems crazy.

2 months + concession claw-back is pretty standard on Seattle Eastside now and was couple years ago.

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

#536

Post by Robin_Message »

xyzzyz wrote: post #508
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.

Yes, but the point is that the tenant doesn’t want to break the lease then, but the landlord does. 12 month leases protect the tenant from rent hikes as much as they protect the landlord from losing a tenant. If legislating easy breaking of the leases results in removing landlord protection, the landlords will stop offering 12 month leases as they confer no benefit to them, and will only offer month to month lease. T…

In the UK, all leases are legally for at least 6 months; 12 months obviously is common.

So you could combine that with Oregon law. Or use the German system someone mentioned.

Basically anything but the unfettered free market is going for home tenancy, given the obvious and large power imbalance between renters and landlords.

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

#537

Post by tdeck »

listenallyall wrote: post #532
tdeck wrote: post #523

Earlier quoted context omitted.

This whole discussion is so bizarre to me, since I've only been a tenant in the SF Bay Area. We don't seem to have brokers here, or at least I've never heard of them. If the landlord pays a property manager or realtor to show the place, that's, on their end and not an additional fee (in fact, non-refundable deposits are illegal in SF). Some people who are used to this broker system seem to assume it *must" be adding…

> it *must" be adding some value but I can attest that it doesn't And yet, landlords keep using it. A $2500/month apt in NYC will cost $34,500 the first year -- but only $30,000 goes to the landlord. Can you help explain why a landlord would freely give up $4500 (standard 15% fee) in potential revenue?

As I understand it, the difference between the broker system in NYC and the one I'm familiar with is that the tenant is obliged to pay the broker some amount directly. I've seen rental condos shown by realtors and property managers - presumably landlords pay these people although I'm not familiar with the standard rate.

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

#538

Post by AJRF »

solveit wrote: post #500
AJRF wrote: post #494

Earlier quoted context omitted.

Nope not illiquid (quite the jump made there on your behalf given the available information). I get paid “on or around the 20th” every month. In some cases it’s earlier (if the 20th falls on a weekend I’ll be paid the Thursday before that weekend), and on those occasions I paid the rent before the 20th. I like to manually pay bills where I can as I will then write them off in a ledger I keep, especially for rent as I…

If your getting paid after the 20th makes you unable to pay on the 20th then you are illiquid. This may or may not be a big deal but it is strictly worse than the alternative. For instance, what happens if you lose your income for whatever reason? Your paying irregularly might as well be proof that you will immediately be unable to pay rent in that case. Now, this may not in fact be true (perhaps you have lots of liq…

Sorry, but nope you are wrong again, I was never paid after the 20th.

Payment was always before or on the 20th, in 3 years not a single rental was after the 20th. I am sorry I am not fitting your curve neatly.

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

#539

Post by Brystephor »

wanderer2323 wrote: post #535
allset_ wrote: post #525

Earlier quoted context omitted.

In Seattle (a couple years ago at this point) the highest lease break fee I saw was 1/2 month which already seemed quite high to me. 1.5x seems crazy.

2 months + concession claw-back is pretty standard on Seattle Eastside now and was couple years ago.

I believe my lease is 3 months + concessions. It's definitely at least 2 months + concessions. This is in downtown Seattle.

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

#540

Post by unishark »

6f8986c3 wrote: post #527
allset_ wrote: post #524

Earlier quoted context omitted.

Except 99% of people wont accept month to month due to the instability.

Another option is for landlords to price the additional risk into the rent itself. But there’s no way you’re going to add risk into the market without that having some effect on pricing.

Yes playing with regulations might help some renters to the detriment of others, but on average landlords will probably make the same.
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