We replaced rental brokers with software and filled 200 vacant apartments • Hacker News Board

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

#561

Post by gbronner » Fri, Jul 09, 2021, 12:30 PM UTC

tjalfi wrote: post #444

an_opabinia wrote: post #76

Earlier quoted context omitted.

> 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. There's a great Joel Spolsky comment[0] that explains why landlords use brokers. They perform work that would otherwise be done by the landlord. https://news.ycombinator.com/item?id=9961727

Thanks! I've personally advised/warned a couple startup founders trying different variations of this. All failed

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

#562

Post by solveit » Fri, Jul 09, 2021, 1:13 PM UTC

AJRF wrote: post #538

solveit wrote: post #500

Earlier quoted context omitted.

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.

They docked you because you sometimes paid rent early?

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

#563

Post by conductr » Fri, Jul 09, 2021, 1:29 PM UTC

CydeWeys wrote: post #477

conductr wrote: post #476

Earlier quoted context omitted.

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.

Your “pretty easy” sounds extremely onerous to me. If my friend said, “hey, apply for my old apartment so I can prove in court that my landlord is fielding/dodging applications.” I think I’d tell them, unkindly, to go F themself. (Yes, That’s how I talk to my friends, but also because I think it’s preposterous that that even asked.)

Going into court you have no/low knowledge of what your landlord has actually done. If they pull out their ads they posted on the internet or on some zero readership newspaper. The judge will see they have made an effort and you probably are grasping at straws because you have nothing in the way of proof. If you’re lucky, judge would hear some expert testimony (realtor) that says the apartment/market/etc should have been filled within 1-2 months and they feel it’s highly unusual the unit would remain unfilled for 6 months. But even still, if the law says the landlord is required to market the property it might not imply they have to be good at marketing the property. So there’s a grey area where it could go either way, and he can proof that you can’t match.

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

#564

Post by caddemon » Fri, Jul 09, 2021, 2:23 PM UTC

listenallyall wrote: post #526

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…

> Most landlords I know "write" their own listings using a standard template and reusing old photos So, like Airbnb? Last I checked, that platform -- without a person -- also charges renters about 15% or more. And you don't even get to actually visit the place before you commit to paying the fee!

The landlords are the ones writing the listing, the agent is the one collecting the money for supposedly "connecting" someone, when AT MOST all they did was post it onto a couple websites like AirBnB. I have no problem with the fee a website collects for listings. They provided a service that allowed the listing to be spread. But the agent is now just an unnecessary middleman between the landlord and such services. 9 times out of 10 real estate agents don't meaningfully contribute to the matching of landlord/tenant in the NYC or Boston markets, yet they continue to collect a fee. And as I mentioned this happens even when it is provable that the prospective tenant found the apartment via a source 100% unrelated to the real estate agent (such as a friend in a different unit).

Before you try to argue that landlords wouldn't pay them if they didn't contribute - the landlord doesn't pay! In cities where the landlord has to pay, you will find agents are used much less often and charge cheaper prices for these sort of rental services. The problem is when the landlord chooses the agent but the tenant has to pay. Every agent just charges the max allowable fee, and the majority of landlords stick with this scheme, whether out of stubbornness, loyalty, or kickbacks I don't know - but it hurts tenants far more than landlords. Otherwise you are correct, landlords would stop using them unless their prices went down!

Let me know when a real estate agent makes their own website that gains traction across the city.

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

#565

Post by caddemon » Fri, Jul 09, 2021, 2:31 PM UTC

tdeck wrote: post #537

listenallyall wrote: post #532

Earlier quoted context omitted.

> 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.

Yes you are right about NYC, and the same is true in Boston - it's been explained repeatedly in this thread why the broker fee is not at all equivalent to a landlord giving up that money, but for some reason there are commenters that just keep repeating the same line about a perfectly rational market instead of engaging with the actual arguments presented.

For someone new to the market it is essentially a hidden fee you find out about at buy time. Since 90% of places do this it would be a huge hassle for a tenant to try to avoid the fee, especially with the pressures surrounding shopping for housing. It's not the same at all as changing a list price.

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

#566

Post by kd0amg » Fri, Jul 09, 2021, 2:57 PM UTC

yunohn wrote: post #407

colinmhayes wrote: post #384

Earlier quoted context omitted.

Again, it depends on elasticities. Businesses can't just raise prices and expect demand to remain at old levels. People quickly substitute goods and services in the face of price changes. In the case of mcdonalds price increases cause people to cook or eat food that doesn't need to be prepared. In the case of rent, supply is fixed, so landlords are already charging monopoly prices. There is very close to zero wiggle…

> There is very close to zero wiggle room for landlords to raise prices. This is disproved very easily by reality - most places have increasing rent YoY. Same goes for house prices. Because of low supply and large demand, like you say, landlords can charge monopoly prices. Not sure why you claim they don’t go up?

> This is disproved very easily by reality - most places have increasing rent YoY. Same goes for house prices.

All this proves is that evolving market conditions lead to changes in price. Try charging 2030's market-rate rent in 2021, and see how many offers you get.

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

#567

Post by whywhywhywhy » Fri, Jul 09, 2021, 3:13 PM UTC

konschubert wrote: post #534

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 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.

> Unless he is going to live in the place herself

Can just lie. My last landlord said he was moving back in because of family circumstances. As soon as he kicked me out he renovated it and put it up for sale.

Didn’t get an offer he was happy with and was asking me if I wanted to move back in 12 months later.

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

#568

Post by newsclues » Fri, Jul 09, 2021, 3:53 PM UTC

NoOneNew wrote: post #440

newsclues wrote: post #352

Earlier quoted context omitted.

Humanity is fine but we’ve tolerated cancers that have gained control of the brain and are running the show.

I'm perfectly okay with AI and algorithms being used as red flaggers to help a human find out what needs immediate attention or even potential concerns. I'm 100% against algorithms and AI making the actual decisions.

I was talking about MBAs, but find your idea to be logical and likely. AI/human hybrids where humans make decisions based on AI processed information.

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

#569

Post by crazygringo » Fri, Jul 09, 2021, 4:08 PM UTC

pydry wrote: post #555

crazygringo wrote: post #487

Earlier quoted context omitted.

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?

> Lyft and Uber have already dialed down their competition with each other

Citation needed. They've raised prices in order to be sustainable, but you're going to need to show some kind of actual evidence of collusion. Extraordinary claims require extraordinary evidence. We can't just assume conspiracy theories between publicly traded companies here.

And who's talking about 1% margins? You're making that up. Healthy competition usually results in something like 10% margins. You don't need illegal agreements to get that.

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

#570

Post by crazygringo » Fri, Jul 09, 2021, 4:13 PM UTC

TeMPOraL wrote: post #522

crazygringo wrote: post #487

Earlier quoted context omitted.

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

No, the way it will happen when Uber, Lyft and their other rideshare competitors run out of investor money and become forced to actually turn a profit. Still, Uber is not sticky. Drivers aren't forced to use it exclusively (fun things would happen if they tried to pull it off, something something employees). Brokerage websites most likely will demand you don't post your apartment on multiple sites. This will encourag…

It doesn't matter if a brokerage website is exclusive. Healthy competition between, say, 3 main ones means people looking for apartments will check those 3.

Kind of like people looking for used textbooks will check eBay, Alibris, and Chegg.

Of course there will be concentration, that doesn't mean it's going to be a monopoly. It's just going to be the usual 2 main competing companies with a 3rd slightly-different company -- your Coke, Pepsi and RC, or your AT&T, Verizon and T-Mobile. It's the usual market pattern.