What are the biggest challenges in renting an apartment by owner?
The main challenges involved in trying to rent an apartment without a broker are i) effectively marketing the apartment; ii) having enough availability to answer leads and schedule showings promptly; iii) pricing the apartment; and iv) handling tenant screening as well as drafting of legal documents.
How and where should you market your for rent by owner (FRBO) apartment listing?
Marketing your apartment effectively is key to successfully finding a tenant quickly. Unfortunately, marketing a for rent by owner apartment listing can be a tricky, time-consuming and expensive proposition. The best way to market is to get your apartment listed in as many places as possible. Start with free listing sites like craigslist and other rental sites (renthop, zumper, leasebreak). Then list it on social media, specifically Facebook. Besides simply posting on facebook’s marketplace try to join some NYC real estate groups like Ghostlight Housing/Gypsy Housing (many groups are particularly popular amongst artists, students, roommates, and renters looking for short term and/or furnished housing). Craigslist and Facebook tend to be very effective tools for getting affordable apartments rented out.
To truly maximize your apartment’s exposure you’ll have to list on paid sites. This is usually mandatory for more expensive, luxury listings. Most listings in full service buildings as well as those with high condo or co-op board fees will likely require paid marketing. The two paid sites which you should list on are streeteasy and the NY Times online real estate. Combined these two sites are responsible for most online real estate traffic in NYC and will represent your best shot at finding a renter.
For even more exposure you can purchase a FRBO marketing program from PropertyClub. Our assisted marketing is the best way to get listed on the Real Estate Board of New York’s RLS (residential listing services), which is essentially a multiple listing services style database that over 17,000 realtors have access to. This means that virtually all NYC realtors and their clients will be able to search for your listing, either directly on the database or on their brokers’ site through shared data feeds (Brokerages like Compass, Redfin, Elliman, and Corcoran all use either an IDX or VOW feed that pulls listings from the RLS database for their clients to search so getting on the RLS database effectively means you’ll be getting your listing on all the top RE firms websites as well). You’ll also get your listing onto dozens of real estate marketplaces including broker only sites like Realtor as well as getting advertising on paid sites, all for less than you’d pay to list directly.
How should I price my apartment?
Assuming you’re renting your condo or co-op your best bet will be to find a comp by searching past listings on streeteasy. One thing to be aware of is NYC’s price brackets. Renters typically perform searches by price bracket so a listing that is priced at $3,505 may take exponentially longer to rent than a listing priced at $3,495.
If your FRBO is a lease break or lease assignment you probably won’t be setting the price as you’re either locked into a lease at a pre-existing rent or your landlord or management company will set a new asking rent. If you think the lease break/assignment is priced above market you can always add an incentive like a free months rent, or offering to forfeit your security deposit.
For a short term sublet or furnished unit you may be able to get a premium of around 10%, but check with your property manager to confirm that you’re allowed to sublet and that there are no fees or penalties to do so.
How should I handle the logistics involved with showings, qualifying a tenant, and signing a lease?
Most of the logistics can be handled on your own, assuming you have the time. We’ll start with dealing with leads and scheduling showings as that will be your first interaction with potential renters. It’s of utmost importance to respond to leads quickly. Don’t let an email or call go unanswered for more than an hour if possible. Once you’re speaking with a potential renter the first thing you’ll likely want to do is to prequalify them. That doesn’t mean asking for their paperwork immediately, but let them know what you or your building expect of them to be able to rent the apartment. In cases where you’re assigning or breaking a lease your building will likely have a standard process for this and will handle the application once you’ve found an interested tenant. If it’s your condo or co-op however you’ll want to make your expectations clear. What are the income requirements (is it 40x the monthly rent), what are the move-in fees (is it first month and security or first, last & security, are there board fees involved, does their move-in date line up with your expectations, etc. Some quick pre-qualifying will ensure nobody wastes their time and will make closing after a showing more likely. Once they’re ready to sign a lease you can simply use a standard Blumberg lease or a REBNY co-op or condo lease.
When all is said and done the biggest hurdle when it comes to renting an apartment by owner is related to time. Do you have the time to do the necessary research required as well as the availability to handle leads and showing requests? If you do you can successfully get your NYC apartment rented for top dollar quickly, especially with proper marketing. Marketing can be a challenge in and of itself as traditionally you wouldn’t have access to the same tools as a broker, and would need to commit a fair amount of time to listing your property across multiple platforms, but the PropertyClub assisted FRBO marketing package solves all of this. Find out more here.