Questions about renting/rental broker

Hi P101,

I do some rentals as part of my business, but my general philosophy on them is that they're a pain in the neck. Most brokers who can do sales make more money doing them, and so rental brokers don't tend to be the cream of the crop (yes, I know there are exceptions).

Because of the way things shake out, the best broker for your rental is generally a sales broker who lives in your building, because they'll be able to show you apartment most frequently.

However, you've run into another problem with brokerage, which is that summer is in general slow, and so people of a certain experience level work less in the summer to save their energies for peak spring and fall seasons. Also, nobody of a decent level of experience is going to sign an exclusive agency listing and work hard at it.

I think your best bet is either to do it yourself, or to find a newbie agent who is eager to get their career started and willing to show every Sunday. You can ask the broker you like to refer you to someone like that (because at least they'll get tipped that way, and if they're good, they'll oversee the process) or you can walk into your local real estate office and ask the office manager for someone who fits that bill. You could do this either with a boutique firm (like Fox Residential, which is UES-based) or your local Corcoran/Elliman/BHS office, or maybe Keith Burkhardt on this board has somebody for you.

ali r.
DG Neary Realty

Thank you so much Ali. By the way, is it offensive to ask for an exclusive agency listing? Also, is "showing every Sunday" something that I can put in the contract?

It's your contract, you can put anything you want in it. I wouldn't sign an exclusive agency listing on most rentals, because why would I want to work on something where there was a big loophole where I might not get paid? The exception would be if I thought having that inventory on my shelf would bring me more business -- which is why a broker in your building is perfect -- he/she can say "I'm the building specialist, look people even come to me for rentals."

ali r.
DG Neary Realty

I recommend using a rental broker with a good reputation to rent out your apartments. I don't do rentals in the UES so I can't recommend someone but definitely would not recommend a young sales agent.

A good rental broker will have dozens of comparable and lower priced apartment listings which they are already advertising in your neighborhood. They will be able to bring their existing clients who have seen other similar properties to your apartment. They will be able to match a renter to your property who may never have considered living in the UES but is looking for exactly your type of apartment. They will pound the street and advertise your listing.

Perching on top of your building like some kind of bald eagle might work for sales exclusives, but a good rental is all about the hustle. A rental broker's job is to maximise advertising streams and channel all them all to your particular apartment.
They are supposed to come in fast, and accurately and rent out your apartment as soon as possible. There is no advantage to sitting vacant, especially in the summer season when hundreds of potential renters are walking the streets every day. Every day your apartment sits vacant costs you money or if the apartment is occupied annoys the people in your building and the existing tenant. This is the busiest time of the year for rentals and the best time to have a lease expire for a landlord.

A 3 bedroom with more than one bath in the UES in a nice building with amenities should rent almost immediately if it is priced well.

Some advice:
1) Make the rental exclusive valid for only a month. If it takes more than two weeks in the summer, either you're overpricing and have to offer a concession or they're not doing their job.
2) Do not pay the fee. There is no point in the summer and you're losing money. Offer the same rate for a two year lease and that should be enough of a draw to renters.
3) Use a broker that is licensed through REBNY and lists through OLR or realty MX.

best

Thank you Ali for answering my question.

Thank you snezan for taking the time to respond -- I'm truly grateful for your lengthy reply. Thank you for letting me know that rental exclusive is 1 month, because I was thinking it might be longer (6 months). Question about your second comment, what does "do not pay the fee" mean? What fee are you referring to? Do you think openhouse every Sunday is important?

At the moment, our buyer's agent insists that she will handle the rental for us with another top agent from the firm. We like this broker but the problem is that we don't think she will devote much time to our property. Both of them have many high-end sale listings (Both are Real Deal's top 75 agents) and they are never around on the weekends. We are thinking to ask our sales agent to co-list the apartment with a more junior agent from her company, not the top broker she said she will co-list with. The apartment is in a good building, but we need to do about 2 weeks of work on the apartment. We are closing next week so have some time. We are foreigners and do not know the rental market too well. So any other advice will be appreciated. Thank you so much.

Also, can we show the apartment while doing work? (paint job, nothing huge)

Another question -- we have a friend who was looking to rent last year. He liked this particular building. So he rented a one bedroom in that building and PAID to renovate the kitchen since the apartment is very dated. Is our friend an exception in this market? We plan to do 2 weeks of work (carpet removal, wallpaper removal, and a paint job. Nothing else). If we can find a tenant like our friend, then we can save a great deal! So I wonder maybe we can show the apartment while doing the work...

The building is one of the top condos on the UES, and we will be the only 3 bedroom on the rental market at this time.

Peninsula-When are you expecting apt to be avail to rent...I'm looking for 2-3 bedroom in UES .

I'm confused. You're buying this place that you haven't lived in ever as an investment property, and so the two brokers you are familiar with are your buyer's agent and the listing agent, is that right?

My recommendation is to do the apartment improvement work *before* listing. I know it's more of a shell-out in terms of cash, but the market is a little soft, so you do want it to look as pretty as possible. During the slump, I had a three-bedroom rental listing at Trump World Tower, and the fact that there was carpet turned off a lot of potential renters. So you want to get all the carpet removal, wallpaper removal etc. done before the photos are taken -- and if I've got your scenario right, you could still list in August.

Also, I like the idea of asking your sales agent to co-list with a more junior broker. (Sorry I'm not around to throw my hat into the ring). I disagree with snezan that a young sales agent can't do the job of a good rental agent -- IMHO, you just want someone hungry who will show the place often.

I think the fee snezan is referring to is brokerage commission, which is typically 12-15% of a year's rent, and until the slump was always paid by the tenant, but now is sometimes paid in full or in half by the landlord.

ali r.
DG Neary Realty (on TRD's list of top boutique brokerages)

Hi Lolls.

We expect the apartment to be available by end of this month, but it can be shown earlier. The apartment is in excellent move-in condition, but we just want to freshen everything up so the new paint job, etc. If you are interested, please send me an email.

nycapartment4rent@gmail.com

Thank you.

12-15%? That's not a small number!

Yes, we are buying a place that we haven't lived in and the brokers are our buyer's agent. We have not signed a rental contract with them, that's why I'm on this board seeking advice.

If I am understanding you correctly, you seem to imply that July and August are peak rental season and by the time September comes, we will be out of luck? We need to hurry with the paint job then...

July and August are peak rental season for smaller apartments -- I have two renters coming in in the next two weeks. The three-bedroom market is a little different, because you're generally dealing with people with kids, and it's easiest for them to shop in the apring and move in early summer. Since you've missed that season, I wouldn't worry about it.

ali r.