Viewing a single comment thread. View all comments

LazarusLong67 OP t1_j6gfe6n wrote

Reply to comment by HankAtGlobexCorp in Areas near Boston to live by LazarusLong67

Yeah for as progressive as the area is you would think they would ban that shit as I'm sure it has a huge affect on lower income people being able to easily move.

−7

modernhomeowner t1_j6hq34r wrote

(Not a broker myself nor a landlord, just an economist) The broker fee actually lowers the total cost of renting for those who stay in a place a while. A landlord covering the brokers fee, has to add it to the rent, and you pay it to the landlord every year. If it's not included in the rent, you only pay it when you move. So you may pay $1200 up front but starting year two you save that $100 a month every month going forward. If you stay in one place 4 years, that broker fee saved you close to $4k.

I had an economics class where we studied that people will pay more for an item if it has free shipping, even if the item+shipping is cheaper elsewhere. Kind of the same principle with brokers fees.

−10

HankAtGlobexCorp t1_j6hys60 wrote

Are you seriously trying to make an argument that a background/credit check and a lockbox key code is worth ~$2500-5000, and also that an paying exorbitant fee for almost no value is for the economic benefit of renters?

🤦🏻‍♂️

9

modernhomeowner t1_j6hzg6d wrote

Yes. Well, I haven't seen a $5,000 fee; it's been 4 years since I looked at apartments, I don't know maybe they are going that high now, maybe those are just bigger than my budget. But let's take something in the middle, $3600. If you were a landlord signing a one year lease, and you had to pay that $3600 in fees, how would u do it? You'd add $300 a month to the rent, right? Maybe you'd pay $1200 of it yourself and add $200 a month to the rent. If I rented that apartment from you for 3 years, I'd have paid $7200 extra in rent rather than paying $3600 right to the broker. It's paying for free shipping, people don't want to see that shipping cost, they'd pay more for an item to avoid it.

−3

HankAtGlobexCorp t1_j6i1m49 wrote

Landlords don’t have to pay that in fees. Brokers fees are solely propped up by insane rental demand in Boston. Rental markets in almost every other city in America do not suffer them.

I understand math and passing costs to the consumer, I’m arguing that brokers do nothing, charge exorbitant rates for doing nothing, and offer no long term value to renters or landlords.

You’re arguing from a place that brokers provide value and are a necessary part of the equation. They aren’t.

6

modernhomeowner t1_j6i3s8n wrote

You are right, they could not use a real estate agent and get away with not paying the fee. There will always be some tenant acquisition cost, either a broker, advertisement listings, a management company, a vacancy allowance, or some combination.

NY law recently shifted broker fees onto the landlord rather than the tenant. Rents in NYC increased at a faster pace (33%) in the last 2 years (when the law was passed) than Boston (25%), despite NY losing a higher population than Boston. That 8% difference on a $2500 a month apartment is $2400, basically that broker fee, and that person in NY now has to pay that $2400 every single year rather than just when they moved in. Getting rid of broker fees in NYC didn't save the tenant, it actually costs them more now.

−2

HankAtGlobexCorp t1_j6i4re2 wrote

Again, I understand the math. Brokers offer no value and tenant acquisition costs are a small fraction of a month’s rent in Boston. Adding a broker inherently makes the transaction more expensive for renters, directly or indirectly.

Rent seeking landlords and the scummy ecosystem around them are greedy parasites to a functioning city.

3

modernhomeowner t1_j6i64z9 wrote

If a landlord is a large company, they don't need a realtor, they have staff. Sounds like something similar to where you live when you mention a "building". If a landlord is the 90 year old man or the 60 year old woman who owns one or two two-families (the two people I rented from), they hire experts to do everything as needed rather than having a staff, such as an electrician, plumber or realtor. You can chose to rent from those people and pay the fee, or large companies with staff, depending on what you want. You can go to an overpriced grocery store with personal attention where you get a cashier or the big Walmarts who have eliminated cashiers except for the handicapped register. We have options, but getting rid of realtors would probably just incentivize that 90 year old man to sell his properties to a large corporation who have staff to deal with vacancies.

1

HankAtGlobexCorp t1_j6ip6b9 wrote

You’re a broker. We get it.

1

modernhomeowner t1_j6is1v6 wrote

Literally said I'm not a broker nor a landlord. I just understand economics. Cheaper now doesn't mean cheaper later.

1

HankAtGlobexCorp t1_j6iwdp2 wrote

Not if you insist on paying an unnecessary middleman. I own and rent a condo in another market with much lower demand than Boston and would never even think that a broker is necessary for tenant acquisition.

2

modernhomeowner t1_j6j65sa wrote

A landlord has a choice to do the work themselves, have a staff, or hire experts (brokers, electricians, plumbers, etc). If the law forbids a landlord to charge for brokers (as it does for electricians and plumbers), it just increases the rent. As we see in NYC as they outlawed charging broker fees, rents went up to compensate. I'd be smiling ear to ear as a NY landlord, getting to raise the rent and keeping the excess each year the tenant stays.

The best part for consumers is if they want to pay the broker fee, they can, and it results them paying less over time. If they don't want to pay a broker fee, they can find someplace else, may end up paying more over time. It's a personal decision. Luckily for landlords, people are willing to pay extra to have the landlord pay the broker or their staff, or themselves.

Economist is a 9 letter word meaning cheap. If there is a way to get something cheap, I'll tell you; the law forcibly passing the broker fees to landlords isn't the way to do it.

0

HankAtGlobexCorp t1_j6jfmy0 wrote

Not once have you made a compelling argument for the existence of brokers for an average apartment and you keep referring to them as a necessity, which I disagree with.

Property management companies provide a service that alleviates a burden for passive landlords. Brokers do nothing for a typical renter or landlord for that matter that wouldn’t be better folded into a long term management service.

I disagree with housing as a rent seeking activity and do not do so above costs of paying a mortgage, HOA dues, and expected upkeep.

1

LazarusLong67 OP t1_j6ia7jz wrote

The types of properties we've lived at the past 8-9 years have all been larger properties with management companies (and that's sort of what we're looking for). I do get what you're saying regarding broker fees for smaller "mom and pop" rentals. Those aren't common in most other parts of the country but the costs are rolled into the rent I'm sure.

1

modernhomeowner t1_j6ibb2q wrote

Those mom and pops are usually a great deal here. We rented a house (garage, 3 bed 2 full bath, living room, family room, dining room, backyard) for $500 less than we could get a 2 bedroom for in a building further from the T station. Who cares if I had to pay a broker fee if I was saving $6k a year; was there 2 years, saved $12k, not to mention had a way bigger place, better parking situation, outdoor space, etc. Just no gym, but I could walk to a gym, but also had plenty of space so I bought an elliptical and rack.

3

LazarusLong67 OP t1_j6ibpst wrote

We would probably eventually end up in something like that (or possibly a condo - at our age we're tired of maintenance lol). Just when moving to a completely different part of the country we've found it easier to deal with an apartment building - easier to meet other people, less to know up front, etc.

Over the past 10 years we've managed to downsize from a 2700 sq foot 3-story home with a basement and storage shed into ~1100 sq. foot apartment so we're headed the other way lol.

1