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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

#551

Post by tut-urut-utut »

udfalkso wrote: post #231
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?

This is a fallacy, at least in NY. I asked my last landlord about this. I asked "if brokers can't charge renters their fee will you pay it instead?". He replied immediately, "no way, I'll just ask my nephew to show the apartments instead". I had just paid a 12% fee to a broker a year earlier with this same landlord! Thousands of dollars. The broker did very little for this exorbitant fee, they opened a door for a doz…

That's exactly what happened in Germany. As soon as the landlords had to pay the brokers out of their pockets, they quickly realized that the "service" is not worth that much for them, so many went without brokers, and the ones that still kept brokers had to pay them much less than before, and the price was related to actual service provided.

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

#552

Post by shadowhost »

kangaroozach wrote: post #533
koolba wrote: post #263

Earlier quoted context omitted.

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…

is the cost passed on to the renter? yes.

is it still better to do that? yes. Because i can now compare the cost of rental, fees included on a comparison site, instead of looking at the place i want and finding it out it has a hidden charge.

this is why they changed the law in the uk so the landlord has to pick, becasue it means they will be incentivised to put it into the rent, and this way its STILL better for the renter because now they are able to compare the full costs.

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

#553

Post by allendoerfer »

firestarter223 wrote: post #513
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…

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.

You can find it idiotic, but finding a tenant is quite easy in popular places, so instead of finding a way to increase the overall price (which is also regulated), the landlords often just do it themself. In unpopular places, it is hard to increase the price.

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

#554

Post by CaptainZapp »

jarv wrote: post #545
raverbashing wrote: post #542

Earlier quoted context omitted.

"Works just fine" not actually. That's one of the reasons you see a lot of places going into airbnb (where they get paid more). I'll give you it works better than some other places because the rights are balanced. But 3 month termination notices are just an anachronism. German "bureaucracy" still think contracts are forever when they're getting shorter with time. Yes, I'm giving you the 3 months notice when you could…

Oh man, don't get me started. The 3 _calendar_ month notice that needs to be sent in writing (or faxed) is so ridiculous and I wonder if it is done to make it more difficult to get out of contracts. In my case, I had no idea that the written notice receive date matters (unlike the US, where you typically use the postmark date), due to mail delay because of a holiday my notice arrived 2 days late and that was enough t…

> unlike the US, where you typically use the postmark date)

I'd wager that it's really up to you to familiarize yourself with local laws and customs.

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

#555

Post by pydry »

crazygringo wrote: post #487
TeMPOraL wrote: post #441

Earlier quoted context omitted.

It's a two-sided market, it's gonna be winner-takes-all.

You mean the way Lyft went out of business because Uber took it all, and then Uber raised their prices 5x?

Lyft and Uber have already dialed down their competition with each other in many locations and raised prices. If theyre smart theyre probably already hammering out an (illegal) agreement of some kind and figuring out ways to disguise the price rise as a natural side effect of something innocuous.

Did you really think investors were willing to sustain a 12 billion dollar loss for a shot at a 1% margin?

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

#556

Post by NikolaNovak »

handmodel wrote: post #319
NikolaNovak wrote: post #314

Earlier quoted context omitted.

>>> Uber drivers make more money today than taxi drivers used to/or do today. Hmmm, That must depend on the market as it's not necessarily the case based on discussions I had with both in Ottawa. (note, when Uber first started, that was the perceived story - almost "free money!" for bored white collar workers with a car and few hours to spare here and there. I've had people in $50k, $60k cars drive me around, to "mee…

I guess I'm skeptical that taxi driver who takes on less rides is making more money after the cut they give to their company. Or, if you were starting an independent taxi service that you'd make more money taking your own calls and doing your own maintenance anyway. I'm not surprised its gone down - probably a sign that it used to be very profitable even if not as much so now. I do know plenty of people that can repa…

>>I guess I'm skeptical that taxi driver who takes on less rides is making more money after the cut they give to their company.

There's an implicit assumption there that taxi driver gets less rides and I don't see why that is necessarily true.

More broadly, I think both Uber and Taxi drivers have significant distribution, and it appears there are both Uber & Taxi drivers who are better or worse at maximizing their rides and income. I've seen both drivers who just "do what app/dispatch tells them" (and are constantly complaining about their income level or nature of rides), and drivers who actively seek out timing, areas and locations that give good rides. This is not the same as parking in front of hotel and hoping for a long drive - it's a fairly active dynamic work.

Overall though, active engaged Taxi drivers seemed to find it a more predictable, profitable engagement that sufficed as main income for their family; whereas I have not gotten that sense from Uber drivers in the 12-18 months prior to Covid.

Of course, while I took taxi or uber twice a day for several years in Ottawa, this is still anecdata and limited sample - absolutely! But that's largely my point - we discuss Uber and Taxi as if the situation in London and San Francisco and New York and Ottawa and so on is the same - and it absolutely is not.

One thing that seems to often be missed in these discussions as well is edge cases; even if in a place Uber is a great alternative for 80-90% of folks, I find it is far less dependable if you're in a less active area, during less active time, and/or need Uber planned for a specific time.

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

#557

Post by gbronner »

e1g wrote: post #158
crazygringo wrote: post #142

Earlier quoted context omitted.

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…

The difference from Doorkee, or any matchmaking service, is that they do not guarantee to pay your rent for six months if a) they can't find someone within a month or b) your landlord doesn't like them. This bet is highly asymmetric - they can win 1 month fee (if you sublease tomorrow) but lose 6x that. I'm also in NYC, and wouldn't underwrite this gamble two years ago, and absolutely not today.

As a small ll I absolutely do not want this in my building. I negotiate lease break fees into my leases; if a tenant is unhappy, I'd rather charge them an appropriate amount rather than have them hire a broker whose sole goal is to find a tenant that can pay the first month of rent

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

#558

Post by gbronner »

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.

I don't use brokers, but rent control enshrines them. More housing->fewer brokers, so join open ny

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

#559

Post by gbronner »

gnopgnip wrote: post #509
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.

In NYC landlords are reauired to allow subleases, and they cant unreasonably deny particular tenants

You can slow walk them if necessary, but if the vacancy happens in the last few months of a lease, it is usually better to break the lease and move on

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

#560

Post by gbronner »

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…

Rent control...
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