Who pays all cash for a year's rent upfront??!!

Yes its quite common, especially in these economic times. If someone has the cash upfront, they can get a FAR better deal than someone who needs to pay each month. The property owner/management company loves it too, as they dont need to worry about the tenant losing their job or falling behind on payments. The only person really at risk is the tenant; if he/she doesnt like the place (or the management company doesnt fix things, etc.) he/she is kind of in a bad place since the money is already paid!

No benefit from the brain trust at Peter Cooper/Sty Town...I tried!

jenni - that stinks. yep, it can be a big advantage to the renter. I considered this as one of our negotiating strategies when we were looking for a place but my husband wasn't comfortable taking the risk (as UESbandit points out, there are serious risks to the renter). Sorry you got shafted. NYC is a beast of a place! Good luck with your search.

Can a renter expect a discount if he offers to pay the year up front???? What type of discount?

Friend of mine paid cash upfront for a 1 year lease from an underwater condo owner. I think the original ask was $5,500/month and he offered $50K cash for the year. The owner took it and put the unit up for sale the following month. Lucky for my friend the place didn't sell before his lease expired. The reason he paid all cash is he has no job and no credit score (he's a rich foreigner who won a green card in the annual lottery).

Back in the 90's I recall offering to pay 1 year up front at a Related Rentals building and they told me I couldn't do it. And that no matter how much money I had my credit rating better be good. They would auto-debit the rent from the AMEX card but no cash upfront. I wonder if paying the full rent upfront makes it more difficult to evict a problem tenant...

A friend wanted to rent an apartment, was told that they were the #2 choice, but could "win" by paying a year upfront (they didn't have a great income history). Friend countered with 6 months upfront, and didn't get the apartment.

Like anything else the landlord might like - a quiet girl vs. a frat boy, someone with family money, who knows - its just one more factor in negotiating.

it is a flawed concept --- what happens in year two?

what if somebody loses their job in the middle of a year? does the security deposit requirement increasse? no.

"Back in the 90's I recall offering to pay 1 year up front at a Related Rentals building and they told me I couldn't do it. And that no matter how much money I had my credit rating better be good. They would auto-debit the rent from the AMEX card but no cash upfront. I wonder if paying the full rent upfront makes it more difficult to evict a problem tenant..."

No.

My co-op has a similar philosophy.

A poor credit rating suggests an irresponsibility about being able to handle one's finances, and regardless of *ability* to pay, signals they might be irresponsible about other things, like keeping the apartment clean and in good repair.

> it is a flawed concept --- what happens in year two?

You ask for it all in advance again, I guess...

I'm not saying I agree with it, just thats its pretty standard protocol.

"I wonder if paying the full rent upfront makes it more difficult to evict a problem tenant..."

I do remember a story of a couple who scammed a lot of landlords, left a lot of unpaid rent (after months of getting them evicted). Their shtick was to pay a year upfront in a 2 year lease, or something like that.

NYCApt1234 - I'm not sure you can expect a discount in all cases. It depends on the LL/owner.

Manhattanfox - flawed? year two rolls around, you renegotiate, like any other rental.

80sMan - that is crazy. From a time value of money perspective, why would anyone accept $50K today over $66K over 12 months. I would think a normal discount (if any) would be a low single digit %.

The absentee recent landlords, e.g. the morons who bought condos as investment properties in 2007, love full year paid upfront. Saves them a lot of hassle. And they couldn't care less how you live in the apartment as long as you don't materially damage anything.

"Friend of mine paid cash upfront for a 1 year lease from an underwater condo owner."

Oh, look, a wasp's nest. I think I'll go stick my hand in it.

""Back in the 90's I recall offering to pay 1 year up front at a Related Rentals building and they told me I couldn't do it. "

Let me guess... it was a rent stabilized apartment?

As a potential tenant, can you offer 1 year rent upfront but money will sit in a escrow account to be credited to owner each month?

Can this kind of offer work? In this way tenant has some control in case owner goes into forclosure etc.

Who will manage this escrow account? Your attorney who charges $200 per hour? lol

I did not think on that, perhaps real estate broker? I was just asking if these arrangements have ever been done.

lol, trust your money to the real estate broker.

the guy I know rented from an owner of several new const units all of which were underwater. I warned my friend that if he pays up front and the owner goes bankrupt and the bank takes over, the lease may be worthless and he's out money. He took his chances and managed to dodge a bullet. My point is that I would look into the owner's financials before I put down 1 year up front. Just like a landlord should think carefully before accepting 1 year in advance.

30yrs. The related blsdg was market rate. I was going to be out of the country off and on, didn't want to worry about mailing rent checks from all cornwers of the globe. In the end my firm let me put it on the corp amex as an auto deduct

This is what happened to me, my rental was snatched from a all cash renter....back in early 2003.

I did it two years ago because I had no choice. It was a Rockrose building where the least requires that you prove an annual salary of -- 40x? 75x? I can't remember exactly -- the monthly rent. Proving cash in the bank was not sufficient, and bonuses were not considered part of salary. The only way to rent the apartment was to pay it all upfront, and there was no discount for this.

I also did this in 2004. The list rent was $2,600 and I offered 1-year cash upfront which equaled to $2,200. I guess there were other interested parties and I also signed a 2-year lease. It worked out for the LL since he could pay the bank back the loan he took for renovations for the unit I was renting. This was for a floor-through in Cobble Hill.

I forgot to add, I found out later the former tenants used to pay $800 before the renovations were done. Not that the renovations were that great. Very DIY - Homedepotish. I'm just glad I learned of the former tenants prior rent on my 2nd year.