Have you seen the ad for my apartment?
No?
Excellent – my strategy is working!
I will never advertise my apartments on Craigslist. And your broker will never hear of them either.
Here are a few reasons I don't work with brokers:
- Using a broker tells me that you lack confidence and independence, and may have an elevated sense of self-importance, all of which suggest that you’ll be an annoying tenant. I share a walk-up building with some of my tenants, so they have the ability to make my life a living hell. Moreover, unlike many bigger landlords, I’m not a real estate pro; I’ve still got a day job that pays far more than the maximum amount I could ever squeeze out of my rentals. My rentals are my pension, and my goal in finding a tenant is a person who will be a good neighbor, who respects my property and my time, and who won’t be a pain in the neck. That's why I’m looking for seasoned New Yorkers with a DIY vibe. If you can’t even find an apartment without training wheels, can you change a light bulb, install an A/C unit, or fix your toilet without calling me?
- Most brokers charge 12 to 15% of a year’s rent.That's money that I could get by charging a higher rent. But instead of hiring someone to pick a tenant’s pocket, I’d rather keep the cost of moving in low and encourage the tenant to spend more on new furniture and apartment upgrades.
- I like to meet each of my tenants in person. Since they are going to be my neighbors too, I want to see how well we get along, and to see how their experiences have prepared them to live in my building. Brokers interfere with that process, and make it hard to get a sense of what the tenant is actually like.
- I’m not looking to have Section 8 tenants in my building, because I simply don’t have the time or energy to deal with a government bureaucracy that might or might not pay me, and to sit at home waiting for the apartment to be inspected. By carefully selecting who sees my ads (more on that below), I can filter out nearly all of the applicants who might be Section 8 tenants. Not so of a broker, especially since the common marketing strategy for brokers is to stick the apartment on Craigslist.
- Brokers often don’t even do a very good job protecting my interests. If the brokerage fee came with a money-back guarantee for both tenant and landlord, I’d consider it, but what if my tenant doesn’t even pay me? It isn’t as if I can go sue the broker for malpractice.
What, no Craiglist?
Twenty years ago, when the Internet was used mostly by geeky university dwellers, Craigslist was a great idea. Now, putting an apartment on Craigslist, as often as not, is an invitation to scammers, and local “entrepreneurs” who will pose as me and try to “rent” my apartments. I also avoid other websites like StreetEasy/Zillow/whatever, who will carefully log the trajectory of rental price changes that I’ve made. No thanks.
Instead I selectively market my apartments to friends of friends, employees of finance companies and prestigious law firms, and alumni of elite universities and private schools.
Bottom line: If you aren’t in one of those aforementioned networks, you won’t have a crack at my apartments. NYC’s incredibly tenant-friendly court system and my lack of a professional staff mean that if I don’t have some way to easily vet you, you are too much of a risk.
But don't hate me too much. Contrary to popular belief about landlords, I really want my tenants to stay long-term. This is due to the basic economics of being a landlord: it costs me a lot of time and effort to rent you the apartment, to clean up after your move, to deal with the utility companies before and after, and to patch, paint, and renovate when you leave.
Even if I could jack up the rent by another 5%, if it cost me a month of vacancy, it would take two years to break even, and that assumes that the new tenant doesn’t find a better deal and leave. So (at least with my free-market units), I’m happy when you are happy, and I’ll try and give you a good reason to stay here.
Lessons from a Small Landlord is a bi-weekly column penned by a real-life NYC landlord whose pseudonym is Craig Roche.
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- Inside tips for amateur landlords
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