New “broker fee” reform could help tenants save thousands of dollars when finding their next apartment or home to rent, but it could come at a significant cost to landlords. In big cities like Boston and New York, it’s not unusual for landlords to hire a broker to help bring in more potential tenants. The problem is that, unlike the rest of the United States, landlords in these cities DON’T have to pay the broker—the tenant does.
But this isn’t some small fee. These broker fees range from eight to fifteen percent of the annual rent, and in pricey Boston or New York City, that could mean thousands of dollars in fees to move into a new place. We brought on StreetEasy Senior Economist Kenny Lee to explain why this antiquated system is still in place and whether or not the reform will go through and help renters.
What are the economic implications for the rental market if these reforms are passed? Will this help renters, landlords, or both, and could it actually increase competition in already competitive markets by lowering the barrier to entry for finding a new rental?
In This Episode We Cover
Boston and NYC’s “broker fees” explained and why they’re so different from the rest of the US
How the broker fee reform could change the rental market in big cities
The cost of moving and how high broker fees restrict renters who are already struggling
What broker fee reform could do to rental property demand in these big cities
Broker fee negotiation and what the future looks like for landlords who have to pay these finder’s fees
And So Much More!
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Jump to topic:
(00:00) Intro
(02:22) Tenants Forced to Pay Fees
(05:18) Why in NYC?
(08:47) New Reform to Help Renters
(12:09) Will This Change the Rental Market?
(15:16) Better for Everyone?
Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-244
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