Manhattan Real Estate Rental Agents Fees De-Mystified
Anywhere else in the US, I only know of one place in this country where the real estate rental agents fees are paid by the prospective tenant–that’s Manhattan.
There are several types of fees that are applicable, depending on the price of the apartment and type of Manhattan property.
For the typical rental property, it is 15% of an annual rental contract. For a typical $5000 2 bedroom, the annual rent comes out to $5000 a month multiplied by 12 months = $60,000/ yr times 15% broker fee= $9000. What a hefty price tag! These fees are divided between both brokerage houses who takes their cut, then pays us.
Sometimes there will be a landlord that will offset these hefty fees by agreeing to pay for one month of the rental amount. So in this case, the $9000 broker fee minus $5000 will leave you paying $4000 instead. But– with the advent of the rising economy and the dwindling inventory, most landlords are not giving this type of incentive to renters. I have seen it only in higher priced luxury units. For instance, Manhattan luxury rentals such as the Plaza Hotel’s Astor Suite broker fee could probably be negotiated for one month of the rental amount. Of course there are no guarantees because the typical going rate to rent in Manhattan is 15% of the annual rental contract.
Keep in mind, majority of lower end or typically priced Manhattan apartment rental will not be negotiable.
If you are renting in a condo NYC or co-op ownership, there will be other fees attached such as application fees, move in/ move out fees, processing fees, credit check fees, etc. On an average this will be approximately $1200-1500 in extra fees, but up to $3000-5000 for high end luxury buildings. Don’t forget to tack on the first month’s rent and 1 month security. This security amount will depend on the health of your credit. If your credit has a few nicks and bumps, landlords will ask anywhere from another extra month up to 6 months. So– to save yourself some money just as you were purchasing a house, make sure to clean up your credit to save you some green.
Before you make your move to Manhattan, you will want to make sure that you actually have enough liquidity to cover your new apartment costs. Also, all payments are made by certified bank checks only. Make sure that you have a bank branch in the city to be able to get these checks from.
I have had clients from other states thinking that the rental process here in Manhattan is just like everywhere else with the typical 1 month rent, 1 month security. You will have a very rude awakening how things are done for apartments to rent in Manhattan are done, before possession rights are transferred to you, the renter.
So before you contact Manhattan real estate rental agents, know that you will be paying a fee because we, just like you–do not work for free.
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