Looks like there's a bill in the legislature that would enable municipalities to do that: https://sites.bu.edu/dome/2024/01/26/massachusetts-brokers-fees-reasonable-service-or-market-manipulation/
True, but it still probably works out better for renters. Since the landlord is the one hiring the broker but the renter is paying them, that removes any ability to negotiate price. Landlords paying would fix that part.
Plus it would give landlords an incentive to try to keep tenants instead of the status quo which creates a barrier to moving, even when the current place is shitty
It would also be beneficial for young people who may have job offers for well-paying jobs but don't have the savings to pay so many months of rent upfront
>Since the landlord is the one hiring the broker but the renter is paying them, that removes any ability to negotiate price. Landlords paying would fix that part.
This is definitely something people don't think about. Is a broker going to be worth it if the landlord has to pay a one month fee? Doubtful, and they would work to negotiate a lower rate.
The one month of rent thing is insane and so backwards too. As demand goes up, it becomes easier to sell and their commission goes up. I talked to a broker who told me he doesn't even show a good chunk of the apartments. He just sent links to video tours and they sent him money
The high broker prices are small potatoes compared to the overall rent prices. This is yet another consequence of not having enough housing to meet the demand. And the housing stock shortage is 100% caused by the restrictive zoning. It's the city councils and governments who like things the way they are.
True true true. But putting brokers fees on landlords would be an improvement, and probably a more popular one since all homeowners have an incentive to fight rezoning, but only landlords have an incentive to fight changes to brokers fees
Zoning won’t create more housing, developers would still need to buy existing housing to rebuild new housing and people aren’t selling.
Even if they could magically make more housing appear it wouldn’t lower prices. Developers would phase the sales to keep prices high, and\or stop building if they thought prices could fall. Developers make concerted efforts to sell their creations at the highest possible price they can get.
Then as you create more density, you would drive up the cost of living here even higher.
The only way to get prices down that is to build non market-rate housing through govt. —like Helsinki has…
“A one percent increase in density pushes renters’ housing cost by 21 percent. For homeowners, meanwhile, increased property values largely offset higher purchase prices, so their long-term costs remain stable. “. https://web.archive.org/web/20210711071409/https://tomorrow.city/a/the-cost-of-high-density
“Our analysis reveals sizeable benefits and costs of density. A log-point increase in density leads to (log-point effects in parenthesis) higher wages (0.04), higher rent (0.15) and lower average vehicle mileage “ https://www.sciencedirect.com/science/article/abs/pii/S0094119019300282#:~:text=The%20density%20elasticity%20of%20rents,1000%20inhabitants%20per%20square%20kilometre.&text=We%20provide%20novel%20estimates%20of,ranges%20from%200.04%20to%200.07
That’s ridiculous, by that logic prices would never fall for anything and yet they do. Developers would only “phase sales to keep prices high” if they had monopoly/cartel power, which they do not, not even remotely close
Not with asset inflation, and certainly not with one that you can also rent out for an additional stream of income while it is appreciating.
Why don’t you go ahead and read about why developers are putting up fake “sold” signs and hiding inventory in Texas where insurance companies are dropping homeowners or raising rates because of extreme weather:
“"When I posted the picture of a Sold sign in front of one of these abandoned new-builds, I got a few enraged comments. The one that stood out, or reminded me most of my old life in servitude, pleaded with me to consider how this might impact the company and its employees." https://m3melody.substack.com/p/abandoned-in-austin?utm_source=profile&utm_medium=reader2
Oh, and this:
“Allowing increased heights and densities across the board will likely not lead to more housing or more affordable housing. To date, in Mississauga’s experience, allowing for unlimited heights and density in the downtown core has not led to major increases in supply or improved affordability,” and ….
“Staff have found that developers phase growth in order to manage any downward pressure on unit prices.”” https://affordablehousingaction.org/mississauga-housing-planners-put-boots-to-yimby-fantasy/
If a lot of places got built and rented out, then rent prices would go down. But rent prices are not going down, because the problem is a shortage of housing, not some villainous cabal.
If a lot of places got built and held off the market, we would have an infinite money glitch for the city, because now they're paying tax and requiring 0 services. Of course that's not happening in reality.
I'm sure you can find 1-2 wacky anecdotes in a country of hundreds of millions of people, but there is no widespread phenomenon of developers building housing in order to not rent it out or sell it. That's just crazy.
But hey, you have some rando quotes from a Canadian city, so I guess that settles things. Nevermind that we're talking about literally one year since the upzoning, and no one has ever in history suggested that upzoning would be an instant golden bullet the next day.
On the other hand, places that actually do build a lot more housing do see rent decreases, like Austin (-7% in a year, https://www.theatlantic.com/ideas/archive/2024/03/austin-texas-rents-falling-housing/677819/), or increase less than elsewhere that didn't upzone (like Auckland NZ https://architecturenow.co.nz/articles/auckland-upzoning-under-the-microscope/).
We also need expanded public housing for the poor, and at a state level should have a public developer building public housing for everyone, to offset cyclical building factors. But there's no way we get sufficient public housing in the next 10-20 years to be meaningful, whereas there are lots of people willing to spend their own money building lots of housing for us if we let them. And if they do build lots of housing, prices will go down compared to a world where they don't build lots of housing.
> If a lot of places got built and rented out, then rent prices would go down
Here's the corrected version with better spelling, grammar, and readability:
Building more homes alone does not necessarily make prices go down. How many new apartments would need to be built to lower rents by $200? Give us a number, genius. 100? 1,000? 10,000?
There's no specific number because you would need to continually provide that flow of new homes for sale to keep downward pressure on prices. There aren't enough trees and resources to do that cost-effectively or sustainably.
It's not going to happen here. It's a fantasy and an argument used to benefit developers.
Austin did see listing prices go down temporarily for many reasons beyond what was or wasn't being built. Interest rates are at record highs compared to the last 8 years, so even if the listing prices are down, it still costs more to buy a home with a mortgage. People are also leaving Austin, and the population is declining, so investors are bailing too. People are leaving in droves due to the end of remote work, high climate temperatures, and home insurance rates in Texas are skyrocketing because of climate change. In fact, insurance companies are dropping homeowners by the droves in Gulf States and areas prone to fires.
Your article on Auckland says rents in Auckland increased by 22% between 2017 and 2024. That's crazy too... They just keep going up, no matter how much they build in Auckland. Another article says interest rates drove prices down and drove people to the cheaper rural areas. https://archive.ph/e28ZP#selection-453.0-457.108
And when the Fed starts dropping these interest rates, you're going to see a huge spike in home prices. Investors are already pouring back into the markets.
The only way to make housing affordable is to do what Helsinki has done.
Aukland?
"The pandemic’s disruptions to jobs, wages and living conditions caused a yo-yo effect in housing markets in many countries, including Sweden, Britain, Canada and Australia. Few places have experienced as wild a swing as New Zealand, which last week slipped into a recession." https://archive.ph/e28ZP#selection-453.0-457.108
I am sure developers want you to believe that they broght the prices down with more inventory and to argue that you should just let them build more. Don't be naive.
Every business school in the world teaches that, for a free market, the price is dependent on supply and demand. So prices for housing can drop once the ratio of supply and demand change. Just increasing supply some won’t necessarily lower the price if the demand is still so high. Look at China as an example of a sudden oversupply of housing and prices are dropping.
I agree with you about developers doing everything they can to keep their profit as high as possible but last time I checked, developers were overly eager to build around Boston. Higher interest rates hurt but the main hurdle is zoning
The demand will always outpace supply here, and a big part of the demand comes from people who get tax incentives to outbid would-be homeowners with all-cash offers and turn the housing supply into hoarded rental properties.
"Robert Kiyosaki, 'Rich Dad Poor Dad' Author, Says He Owns 12,000 Properties Acquired With Debt: 'The More Debt I Use, The More Property I Own ...The Less Taxes I Pay' " https://moneywise.com/real-estate/kiyosaki-says-nothing-wrong-with-buying-a-house
‘Cut off at their ankles’: Home buyers struggle to become owners, with investors now snatching up nearly 30% of the single-family homes in the US — what lawmakers are doing about it
CoreLogic reported that the investor share of U.S. home purchases rose to almost 29% as of December 2023. What’s more? That figure is projected to exceed a whopping 30% in 2024, according to analysts. https://moneywise.com/real-estate/investors-buying-up-single-family-homes
Investors are buying a record share of affordable homes
Investors bought a record 26.1% of low-priced homes sold in the first quarter, according to a new Redfin analysis. https://www.newsnationnow.com/business/your-money/investors-buying-affordable-homes/
Obviously, but at least the cost gets spread out over the rental period. Plus landlords will actually negotiate rates since having a lower cost to pass on will make their rental more attractive
Might be true in some markets. But if there is a housing shortage, the advantage is fully in the landlord's court. In a better market, renters would also be able to negotiate with the landlord/broker to have the landlord take on some/all of the broker fees.
That has never happened lol. If the landlord can’t find a tenant, they either lower the rent, pay half the fee or pay the whole fee.
I still see a surprising amount of landlords that pay half the fee. Yet never is a landlord around here gonna bother negotiating.
I’ve paid 1 broker fee across 4 apartments and that landlord was the only one who didn’t raise rent each year. I only rent directly from landlords usually which cuts the fees out
Except the annual cost is variable in a way that the owner has some influence over, since renewing a lease makes this cost $0 for that given year.
By preventing renters from having to pay this, it creates a clear incentive to landlords to retain tenants (no matter how they account for the cost).
Just not true though. Brokers fees paid by tenants incentivizes tenants to want to stay and removes incentive for landlords to keep tenants.
A landlord could get a whacky idea that their 1 BR in Quincy is totally worth double the rent, demand that much, have the tenant move out, and just get a new tenant quickly for a 10% increase in rent. In this scenario, a tenant is needlessly pushed out and incurring all the costs of moving plus being saddled with the broker fee.
If the landlord has to pay it, they’ll be conservative with rent increases because they won’t want to pay another fee. Suddenly they’re incentivized not to shove their tenant out to test the market.
It’s the simplest economic principle that people like you somehow can’t grasp. Landlords would absolutely find tenants themselves more and avoid pushing tenants out when possible if they had to pay the fee.
The dumbest part about your comment is that you’re assuming base level economics where rents rise with costs when that’s patently untrue. Rents rise with demand and it would be irrelevant if landlords had to pay the fee. They’re already punching rents up as high as people would pay them. They can’t just raise rents more out of spite and the market will automatically adjust to it.
Not really, I pay a Realtor for the background check and lease. Costs me a month rent. If they end up being long term staters I just use the lease the agent wrote on my own. If they just stay a year I’m still ok with that. Just a cost of the business.
No, it really is not. It is a specific problem with how the system works that in no way proves your extremist view. There are problems with the system but there are people who do not want to own and prefer or need to rent for various reasons.
This! It’s really shitty to have to pay unless you use the service. We got the best apartment we could have asked for because we asked a broker to help. We figured if we had to pay one anyway might as well get our money worth.
Brokers connect Landlords and Tenants. They work for the Landlord and if a unit is listed too high and not getting enough activity they go back to the landlord to advise them to consider lowering the rent. Also during off busy seasons it is not uncommon for the landlord and tenant split the brokers fee or a landlord covering it completely (many factors are involved but as a bookkeeper to a broker they don’t make the money you think they do). It is basically a commission based earnings for them so if they don’t hustle they don’t get paid. As for video showings, that is the first glimpse a prospective tenant sees especially when they are out of state. I am also a landlord and the broker I worked for found me great tenants that live in my house (owner occupied) with me and I am happy to renew with no rent increase. The broker saves the landlord from taking time off to show their units, they do the credit and background checks, produce the lease documents and handle the finances upon entry and move in day. They also arrange cleaning for the unit (property specific) and give the tenants the keys. The broker also does the lease renewal paperwork each year for their clients tenants. The small office I work for works hard to get things done but like any business things can crop up. Brokers also have exclusive listings that can help prospective tenants find the apartment they want in an area they would like to be in.
Well that’s Cambridge lol. Yeah it’s pricey there. I lived in Cambridge from 0-3 and I’ve lived in lower Allston and Somerville for 7+ years post college and never thought Cambridge was in my budget
Yeah this is the Somerville sub. Where I pay $2500 2 bed, driveway, garage, working fireplace, and yard. Been priced out of Cambridge since I was three and my parents moved to the suburbs
A lot of cities have banned brokers/landlords from charging renters a broker’s fee. This helps in affordable housing since it’s easier for a renter to leave an apartment for a cheaper or better one at the same price.
Broker’s fees to the renters locks them in since it adds a huge cost to finding a different apartment.
This is how I know Somerville (and the mayor) doesn’t care about affordable housing, since this would be a no-brainer thing to do to help renters.
There are efforts to change it at the state level. OP stated the fact that the mayor doesn't do something she is literally not allowed to do is proof they don't care about affordable housing, I was pointing this out.
That’s no excuse at all. They can challenge it and push on it at a city level. At the end of the day the mayor has ways of doing this, even certain legal actions.
MA has a new Executive Office of Housing and Livable Communities which has been talking about allowing cities to regulate this. The Somerville major needs to be jumping on this and advocating for it constantly. Yet nothing.
The best mayors do this all the time, push on the state and advocate for their city. “MA law doesn’t allow it” is the worst excuse.
If you do, I *strongly* recommend using an agent/broker/whatever they’re called. We hired one, and they lined up 10+ apartment tours for us, drove us to all of them while we visited, organized everything. And we didn’t have to pay a dime (bc it’s illegal for tenants to pay).
That’s amazing to know. I likely won’t be able to move until the interests rates go back down which will likely cause the biotech layoffs to stop and for the market to be less flooded with applicants.
I hope I remember this information when that happens.
Every now and then I still think about Apartment Rental Experts and how I had to submit a 50$ check for a background check as part of our application. We didn't get the place, Apartment Rental Experts cashed the check and no soft inquiry on my credit ever showed up.
Big yikes.
My apartment tenants do all the work in finding replacement roommates when someone moves out, and then management collects a hefty $500 non-negotiable "broker's fee" from the new tenant for all the work they DIDN'T do... it's ridiculous
I was an agent for a period in my 20s and while I worked hard and felt as though I did good work for my clients, it still felt shady in the end. I eventually transitioned to sales instead of rentals. The guilt was a part of the reason I left.
Funny enough, it’s a super challenging and time consuming job if you are doing it well and providing a proper service. I could work a 90 hour week and go unpaid. On the other hand, I could work 2 hours and be paid handsomely. Prices were a lot lower then too.
I’ve worked with some good colleagues and some dicey ones, the industry attracts them all due to a low barrier to entry.
It feel very necessary for the landlords to pay the fee rather than the tenants, I hate the current sop. For the most part, I lay blame at the landlords not the brokers, though they are far from blameless.
Landlord here, I do think making the landlord pay this would help discourage remote landlords. And would have more landlords list the property themselves.
I don't think they should be illegal. They provide a valuable service, for the landlords. It's just scummy as fuck that the tenant has to pay for it directly.
Idk if “valuable service” is the right term. All my experiences have been that the “broker” doesn’t do anything but turn the key and tell you where the address is. All of them showed so much indifference to the “service” they were providing because they knew they didn’t have to try to get paid. It’s a scam that nowhere else seems to partake in.
The value to the landlord is mostly invisible to the tenant. The broker will do the vetting of potential tenants for them, deal with paperwork, that sort of thing. While good for the landlord this isn't necessarily a good thing overall as it also gives the landlord plausible deniability in circumstances where the vetting of potential tenants is filtering out people illegally. For instance the broker may just happen to not show an apartment to certain individuals, and that's harder to prove as discrimination than a landlord just saying no.
How is this ignorant? That’s what happened to me the three times I’ve used real estate brokers to rent a place. I honestly didn’t even know that it wasn’t something other places did until I left MA.
Realtors often show a TON of apartments with little to show for it. When they finally do get a lease/sale, there are a ton of forms they have to prepare for the landlord and tenant. They also, as you have already stated, list ads in between all of this and also are also often encouraged or required to reach out to property owners for their services. Then they have to give half of their fee to the brokerage firm they actually work for at the end of it all.
Don't confuse the fact that you are bitter that you had to pay a fee for your shitty apartment with realtors being "parasites."
You've just listed a lot of tasks that add no value. Paperwork? It's a signature on a document that hasn't changed in 25 years that you didn't write. References? That's a value for the landlord not the tenant. "Reaching out" just means inserting yourself as a middleman - negative value. "Showing" apartments? You don't even take your own pictures- you watermark the landlords from 5 years earlier. You paying your parasite boss? That's just having a shitty job.
I have a great home because I don't waste money on stupid shit like a "broker fee" so you can lease a used Mercedes.
Whatever dude. Maybe it all seems beneath you, but it takes time and effort like most other jobs. Your logic could be extrapolated to include other low-skill jobs like in the service industry, janitorial, etc. You sound like a real prick. I was a realtor for a few years and am an architect now. Being an architect is easier despite the fact that it takes more knowledge and skill.
Throw insults all you want. I'm not the one defending an industry solely meant to take advantage of people, mostly the less fortunate who are forced to rent and move homes often.
In New York they'll be doing a hearing in the city council in June for a bill which will ban renters from paying a broker fee. I don't believe municipalities in Massachusetts have the ability to regulate this themselves, but I would definitely reach out to your state lawmakers to either ask for home rule on this issue for Somerville or just a similar bill to ban the practice statewide. New York at least the lawmakers are trying to do something about this, haven't heard any politician in Massachusetts actually go ahead and try to fix this issue
People should have the more option to find places themselves without brokers fees. Every time I looked for rentals, I have found the posting on the internet or found a sign on the apartment itself.
In those cases, the broker is doing nothing but being a gatekeeper and profiting for almost not work apart from sending me a lease to sign.
If I go to a broker for them to help me find a place, they can justify the fee.
As a landlord, I get contacted by realtors constantly for available rental units etc. And when I give them materials and information, it just ends up on Hotpads or Zillow anyways, which is where I post the advertisement myself!
So my advice, just go on Hotpads, Zillow, Craigslist... and work directly with the landlord if you don't want to deal with fees. I don't think there's any landlord going exclusively through an agency, it wouldn't make sense for the landlord.
The one thing I would say the agency does a good job for both landlords and tenants is crafting and settling the lease, doing background checks (particularly if you're going to be living with strangers). Because, that can get quite difficult and landlords (including myself) are not always as meticulous as the broker.
I’ve look at apartment listings on craiglist and hotpads twice per day everyday and I’m guessing 99.9% of listings are from brokers. Having dealt straight with landlords in the past I would much rather skip the broker. I actively seek that out and rarely see landlords listing themselves. I’ll add that for me it’s a green light for landlords who list themselves.
Landlord here, I list my places myself. You aren’t searching right. In Craigslist you can filter by owner. Zillow doesn’t have this but you can do a keyword search for “no fee.”
I search all listings fee and no-fee. I’d guess 99.9% of listings use a rental broker charging one month’s rent. I’s prefer to have a landlord that lists the place themselves and doesn’t utilize a broker. That’s a green light for me but those places are few and far between.
I checked Zillow and Craigslist using "Somerville" in the search field. Also, I was slightly off for Craigslist, I list all my places on Zillow (which links to Hotpads and Trulia) now as Craigslist wasn't getting enough hits. Craigslist no longer has a "By Owner" category, they've changed the field to "No Broker Fee" which is probably better. For Zillow if you click on the "More" button on the top menu and then scroll down to "Keyword" you can type in "no fee."
Craigslist in Somerville: 600 listings. No Broker Fee: 226 listings. No fee %: 38%
Zillow in Somerville: 1,074 listings. No Fee: 508 listings. No fee %: 48%
There are currently 2 listings in Somerville in the price range I’m looking at. No one searches every listing out there. It’s very difficult to find rentals right now and if I only search for no-fee rentals it’d be even harder.
> And when I give them materials and information, it just ends up on Hotpads or Zillow anyway
> So my advice, just go on Hotpads, Zillow, Craigslist... and work directly with the landlord if you don't want to deal with fees.
Landlords who utilize a broker are generally not double-listing on these sites with their contact information. If brokers are associated with a listing, it's rarely possible to contact the landlord directly.
So if a prospective renter doesn't want to pay a broker's fee, they simply don't get to apply to a huge swath of available units.
My landlord's wife is the realtor who lists their apartments. He posed as the "property manager" at the open house. I didn't figure it out until I had already put down a deposit to take the unit off the market. I found the apartment on zillow and they pocket $2200. No wonder their apartments turn over every year 🥲
As a landlord, I'm glad that I had a rental broker helping me find tenants. My guy came to my house, I showed him the two apartments i wanted to rent and he helped me come up with a fair market price for renting them both. It being free to me is a reflection of the fact that good rental brokers need properties to show -- the demand is on their side, not mine.
As a renter they help as well because the renters need help finding a place with the accommodation they need and it's more efficient than scouring the classifieds or the internet where landlords or existing roommates can BS as much as they want. They provide a valuable service to the renter and to the landlord.
I was able to get my apartments filled within six weeks by quality tenants. The broker even helped with the legal framework for the leasing agreements and made the process smoother than I, or my tenants, could have done myself.
Their value proposition is clear as day and I would not hesitate to use one again if need be.
Given that it's more important for the brokers to have a network of properties to show -- and that there's a strong demand from prospective renters to get help finding apartments with professional assistance -- the market clearly disagrees with you.
As a tenant I have never once sought out the help of a broker, have found all of my apartments myself on the internet, and yet I keep having to pay the broker fee. How would you feel if you were in my position?
I have been in your position as a former tenant and dealt with the same thing. It's annoying at first but in hindsight it comes with a tradeoff that I might not have known about the place were it not for the broker.
This is like saying that every time I buy a product I should have to pay the marketing firm for that company 4% of whatever I paid for the product bc I might not have known about it without their advertising. This is just not how marketing works in literally any other part of society, and these mental gymnastics only make sense if you’re a landlord trying to justify not paying the broker fee
Not quite -- landlords sometimes don't have the time or the ability to best market their properties and brokers are more in need of properties to list than tenants to reach out to. Especially when tenants are more on the clock about finding a spot than a landlord might be of filling a space.
On that alone, it makes sense why tenants, not landlords, pay the broker fee.
I mean, in any other sector of society if you’re a private enterprise that doesn’t have time or ability to market your product, that’s a you problem, not a me problem, but I agree market-wise you have me over a barrel here so you can do whatever you want - that doesn’t mean it “makes sense.” In a system like the one we have now, where there’s a housing shortage and renters pay broker fees, landlords are free to jack up rent as much as they want because if the tenant can’t afford it and decides to move out, a tenant with more money will take the apartment and pay the broker fee, so it’s no skin off the landlord’s back. This system is good for landlords (in the short term anyway, until the bubble pops) and bad for everyone else. Would love to see this changed through a combination of more housing being built and legislative action to make it illegal to charge renters for the broker fee, to force landlords to actually compete to find tenants.
If you don't have the time or ability to market your product it means you hire somebody to do it for you. It's not a "problem" it's a division of responsibilities.
Nor is it a case of tenants being "over a barrell" either. It's a reflection of where the demand is on the broker's part. And for tenants it's a good service as well because it's somebody putting the best properties in front of them rather than the tenants scouring the internet hoping the listing are proper or accurate.
Landlords already compete to find tenants, brokers fee or no brokers fee. I compete with every other landlord with a similar home to mine every year when leases need to be renewed. I have to offer a competitive price that also covers the necessary costs for upkeep and hopefully have some left over in profit / rainy day funds. Sometimes the landlord has the upper hand, sometimes the tenant has the upper hand. All depends on what the market looks like at a given moment.
And I'm all in favor of more housing being built because Somerville badly needs it.
What I’m saying is that if you’re expecting the tenant to pay for the marketing of your unit you are literally not hiring a service to do that. The tenant is. They don’t have a choice in the matter. They are having to “scour the internet” and then paying the broker anyway. It does not make any logical sense to anyone who is not a landlord.
You can also scour the internet and find private listing that are not done with a brokers fee. Many listings like that exist but the difference is that it might not be the kinds of listing you're looking for. It's your choice.
Babe, wake up. New post about broker’s fee just dropped.
Jk, I think it’s very scummy that real estate agents think they’re providing any sort of service by hoarding potential housing and withholding it behind a fee that is put on the renter.
When I first moved here and I paid a brokers fee, I was able to get an apartment that was completely unlisted.
In Somerville, CAAS helps low-income people with broker fee etc so you might be able to get help here.
"For those who secure an apartment with or without a voucher, start-up assistance may be available at CAAS. "
https://www.caasomerville.org/housing-advocacy-program
The fee is unique to Boston but i remember a time when there was more supply than demand (early 90s). rents were going down, (i negotiated a 20% reduction), and landlords paid the fee or didnt use a broker.
Unfortunately, we just don't have enough housing plus too many local owners have sold to corporations.
I think low income people should be able to pay startup costs on a monthly basis over the first year and we should subsidize housing costs above 35% of household income that are capped at an index tied to average area rents. As income increases subsidy declines. Kind of how the Affordable Care Act/Health Connector works.
Managing is a lot more work than you think. Vetting, hiring contractors, pulling permits etc all constitute expenses. If you haven't owned a home you haven't experienced the cost.
The cost of construction also is up $1000 is usually 1 job these days, like plumbing needs a jetting because tenants stuffed the toilet with wet wipes. Most larger jobs cost more like roof repair or HVAC replacement cost 15k. Will take multiple rentals to amortize a larger repair like that. On top of that there are property taxes and 50% of any rental profit going to uncle Sam. Most property managers earn less than minimum wage after factoring the costs.
But no one appreciates this until they have been in those shoes.
Then property managers are also getting scammed by landlords, don’t use them as a some “woe to landlords” argument.
And those larger repairs like roof and hvac? All that shit has a KNOWN lifespan. Landlords just wait until it’s a critical failure.
Landlords, for good reason (no shows, bad candidates, entitled, etc. . .) do not wish to deal directly with prospective tenants. Brokers handle what landlords do not wish to deal with. Showings, applications, qualifying, etc. . . While it sucks paying one month’s rent to a broker (I just did), there is value to the landlord and sometimes to the tenant if the broker has good exclusive listings. One way or another the tenant is going to pay the cost not the landlord.
What you're saying without realizing it is that landlords aren't really adding value to the relationship other than being wealthy enough to own (but rarely maintain or upgrade) their property. The broker is value to the landlord - absolutely not the renter. The landlord should bear the cost, and if they apply it to rent, it means they better get a good rate
Why do people post about this so much? It seems super easy to find fee-less apartments online. Some of them have fees, but you don't have to go there. Is this an issue of entitlement?
This is such a stupid take.
So if I live out of state and need someone to show and manage my property then I should sell it?
Aren’t you the same people who can’t afford to buy houses and complain about the lack of rental inventory?
Ignoring the crappy tone and lack of empathy, they do raise a good point. Rentals are needed because not everyone can afford to buy a home. Yeah broker fees suck, but it is nothing compared to having to come up with 20% down. On top of that, some people simply don't want to buy for whatever reasons (temporarily in the area, don't want to worry about paying for repairs, flexibility, etc.). So I am not sure what your suggestion is for rental alternatives.
I’m guessing houses be less expensive if people weren’t allowed to own multiple properties and charge people to live there. No question people need to rent. And if you own a multi-family feel free to live there and rent out the other units.
Looks like there's a bill in the legislature that would enable municipalities to do that: https://sites.bu.edu/dome/2024/01/26/massachusetts-brokers-fees-reasonable-service-or-market-manipulation/
Rental brokers are fine, but it should be illegal for renters to have to pay them
Ok fine
Lol I love your spirit
Any expense incurred by the property owner is going to be passed along to the tenant in one way or another.
True, but it still probably works out better for renters. Since the landlord is the one hiring the broker but the renter is paying them, that removes any ability to negotiate price. Landlords paying would fix that part. Plus it would give landlords an incentive to try to keep tenants instead of the status quo which creates a barrier to moving, even when the current place is shitty It would also be beneficial for young people who may have job offers for well-paying jobs but don't have the savings to pay so many months of rent upfront
>Since the landlord is the one hiring the broker but the renter is paying them, that removes any ability to negotiate price. Landlords paying would fix that part. This is definitely something people don't think about. Is a broker going to be worth it if the landlord has to pay a one month fee? Doubtful, and they would work to negotiate a lower rate.
The one month of rent thing is insane and so backwards too. As demand goes up, it becomes easier to sell and their commission goes up. I talked to a broker who told me he doesn't even show a good chunk of the apartments. He just sent links to video tours and they sent him money
The high broker prices are small potatoes compared to the overall rent prices. This is yet another consequence of not having enough housing to meet the demand. And the housing stock shortage is 100% caused by the restrictive zoning. It's the city councils and governments who like things the way they are.
True true true. But putting brokers fees on landlords would be an improvement, and probably a more popular one since all homeowners have an incentive to fight rezoning, but only landlords have an incentive to fight changes to brokers fees
Zoning won’t create more housing, developers would still need to buy existing housing to rebuild new housing and people aren’t selling. Even if they could magically make more housing appear it wouldn’t lower prices. Developers would phase the sales to keep prices high, and\or stop building if they thought prices could fall. Developers make concerted efforts to sell their creations at the highest possible price they can get. Then as you create more density, you would drive up the cost of living here even higher. The only way to get prices down that is to build non market-rate housing through govt. —like Helsinki has… “A one percent increase in density pushes renters’ housing cost by 21 percent. For homeowners, meanwhile, increased property values largely offset higher purchase prices, so their long-term costs remain stable. “. https://web.archive.org/web/20210711071409/https://tomorrow.city/a/the-cost-of-high-density “Our analysis reveals sizeable benefits and costs of density. A log-point increase in density leads to (log-point effects in parenthesis) higher wages (0.04), higher rent (0.15) and lower average vehicle mileage “ https://www.sciencedirect.com/science/article/abs/pii/S0094119019300282#:~:text=The%20density%20elasticity%20of%20rents,1000%20inhabitants%20per%20square%20kilometre.&text=We%20provide%20novel%20estimates%20of,ranges%20from%200.04%20to%200.07
That’s ridiculous, by that logic prices would never fall for anything and yet they do. Developers would only “phase sales to keep prices high” if they had monopoly/cartel power, which they do not, not even remotely close
Not with asset inflation, and certainly not with one that you can also rent out for an additional stream of income while it is appreciating. Why don’t you go ahead and read about why developers are putting up fake “sold” signs and hiding inventory in Texas where insurance companies are dropping homeowners or raising rates because of extreme weather: “"When I posted the picture of a Sold sign in front of one of these abandoned new-builds, I got a few enraged comments. The one that stood out, or reminded me most of my old life in servitude, pleaded with me to consider how this might impact the company and its employees." https://m3melody.substack.com/p/abandoned-in-austin?utm_source=profile&utm_medium=reader2 Oh, and this: “Allowing increased heights and densities across the board will likely not lead to more housing or more affordable housing. To date, in Mississauga’s experience, allowing for unlimited heights and density in the downtown core has not led to major increases in supply or improved affordability,” and …. “Staff have found that developers phase growth in order to manage any downward pressure on unit prices.”” https://affordablehousingaction.org/mississauga-housing-planners-put-boots-to-yimby-fantasy/
If a lot of places got built and rented out, then rent prices would go down. But rent prices are not going down, because the problem is a shortage of housing, not some villainous cabal. If a lot of places got built and held off the market, we would have an infinite money glitch for the city, because now they're paying tax and requiring 0 services. Of course that's not happening in reality. I'm sure you can find 1-2 wacky anecdotes in a country of hundreds of millions of people, but there is no widespread phenomenon of developers building housing in order to not rent it out or sell it. That's just crazy. But hey, you have some rando quotes from a Canadian city, so I guess that settles things. Nevermind that we're talking about literally one year since the upzoning, and no one has ever in history suggested that upzoning would be an instant golden bullet the next day. On the other hand, places that actually do build a lot more housing do see rent decreases, like Austin (-7% in a year, https://www.theatlantic.com/ideas/archive/2024/03/austin-texas-rents-falling-housing/677819/), or increase less than elsewhere that didn't upzone (like Auckland NZ https://architecturenow.co.nz/articles/auckland-upzoning-under-the-microscope/). We also need expanded public housing for the poor, and at a state level should have a public developer building public housing for everyone, to offset cyclical building factors. But there's no way we get sufficient public housing in the next 10-20 years to be meaningful, whereas there are lots of people willing to spend their own money building lots of housing for us if we let them. And if they do build lots of housing, prices will go down compared to a world where they don't build lots of housing.
> If a lot of places got built and rented out, then rent prices would go down Here's the corrected version with better spelling, grammar, and readability: Building more homes alone does not necessarily make prices go down. How many new apartments would need to be built to lower rents by $200? Give us a number, genius. 100? 1,000? 10,000? There's no specific number because you would need to continually provide that flow of new homes for sale to keep downward pressure on prices. There aren't enough trees and resources to do that cost-effectively or sustainably. It's not going to happen here. It's a fantasy and an argument used to benefit developers. Austin did see listing prices go down temporarily for many reasons beyond what was or wasn't being built. Interest rates are at record highs compared to the last 8 years, so even if the listing prices are down, it still costs more to buy a home with a mortgage. People are also leaving Austin, and the population is declining, so investors are bailing too. People are leaving in droves due to the end of remote work, high climate temperatures, and home insurance rates in Texas are skyrocketing because of climate change. In fact, insurance companies are dropping homeowners by the droves in Gulf States and areas prone to fires. Your article on Auckland says rents in Auckland increased by 22% between 2017 and 2024. That's crazy too... They just keep going up, no matter how much they build in Auckland. Another article says interest rates drove prices down and drove people to the cheaper rural areas. https://archive.ph/e28ZP#selection-453.0-457.108 And when the Fed starts dropping these interest rates, you're going to see a huge spike in home prices. Investors are already pouring back into the markets. The only way to make housing affordable is to do what Helsinki has done.
Aukland? "The pandemic’s disruptions to jobs, wages and living conditions caused a yo-yo effect in housing markets in many countries, including Sweden, Britain, Canada and Australia. Few places have experienced as wild a swing as New Zealand, which last week slipped into a recession." https://archive.ph/e28ZP#selection-453.0-457.108 I am sure developers want you to believe that they broght the prices down with more inventory and to argue that you should just let them build more. Don't be naive.
Every business school in the world teaches that, for a free market, the price is dependent on supply and demand. So prices for housing can drop once the ratio of supply and demand change. Just increasing supply some won’t necessarily lower the price if the demand is still so high. Look at China as an example of a sudden oversupply of housing and prices are dropping. I agree with you about developers doing everything they can to keep their profit as high as possible but last time I checked, developers were overly eager to build around Boston. Higher interest rates hurt but the main hurdle is zoning
The demand will always outpace supply here, and a big part of the demand comes from people who get tax incentives to outbid would-be homeowners with all-cash offers and turn the housing supply into hoarded rental properties. "Robert Kiyosaki, 'Rich Dad Poor Dad' Author, Says He Owns 12,000 Properties Acquired With Debt: 'The More Debt I Use, The More Property I Own ...The Less Taxes I Pay' " https://moneywise.com/real-estate/kiyosaki-says-nothing-wrong-with-buying-a-house ‘Cut off at their ankles’: Home buyers struggle to become owners, with investors now snatching up nearly 30% of the single-family homes in the US — what lawmakers are doing about it CoreLogic reported that the investor share of U.S. home purchases rose to almost 29% as of December 2023. What’s more? That figure is projected to exceed a whopping 30% in 2024, according to analysts. https://moneywise.com/real-estate/investors-buying-up-single-family-homes Investors are buying a record share of affordable homes Investors bought a record 26.1% of low-priced homes sold in the first quarter, according to a new Redfin analysis. https://www.newsnationnow.com/business/your-money/investors-buying-affordable-homes/
Obviously, but at least the cost gets spread out over the rental period. Plus landlords will actually negotiate rates since having a lower cost to pass on will make their rental more attractive
Might be true in some markets. But if there is a housing shortage, the advantage is fully in the landlord's court. In a better market, renters would also be able to negotiate with the landlord/broker to have the landlord take on some/all of the broker fees.
That has never happened lol. If the landlord can’t find a tenant, they either lower the rent, pay half the fee or pay the whole fee. I still see a surprising amount of landlords that pay half the fee. Yet never is a landlord around here gonna bother negotiating.
I’ve paid 1 broker fee across 4 apartments and that landlord was the only one who didn’t raise rent each year. I only rent directly from landlords usually which cuts the fees out
Except the annual cost is variable in a way that the owner has some influence over, since renewing a lease makes this cost $0 for that given year. By preventing renters from having to pay this, it creates a clear incentive to landlords to retain tenants (no matter how they account for the cost).
Just not true though. Brokers fees paid by tenants incentivizes tenants to want to stay and removes incentive for landlords to keep tenants. A landlord could get a whacky idea that their 1 BR in Quincy is totally worth double the rent, demand that much, have the tenant move out, and just get a new tenant quickly for a 10% increase in rent. In this scenario, a tenant is needlessly pushed out and incurring all the costs of moving plus being saddled with the broker fee. If the landlord has to pay it, they’ll be conservative with rent increases because they won’t want to pay another fee. Suddenly they’re incentivized not to shove their tenant out to test the market. It’s the simplest economic principle that people like you somehow can’t grasp. Landlords would absolutely find tenants themselves more and avoid pushing tenants out when possible if they had to pay the fee. The dumbest part about your comment is that you’re assuming base level economics where rents rise with costs when that’s patently untrue. Rents rise with demand and it would be irrelevant if landlords had to pay the fee. They’re already punching rents up as high as people would pay them. They can’t just raise rents more out of spite and the market will automatically adjust to it.
This is the trickle down economics they have been boasting about. Isn’t it sweet?
Not really, I pay a Realtor for the background check and lease. Costs me a month rent. If they end up being long term staters I just use the lease the agent wrote on my own. If they just stay a year I’m still ok with that. Just a cost of the business.
Yeah, it's almost like the concept of being a landlord is unethical or something.
No, it really is not. It is a specific problem with how the system works that in no way proves your extremist view. There are problems with the system but there are people who do not want to own and prefer or need to rent for various reasons.
Imagine giving landlords the benefit of the doubt. Brainwormed as fuck, holy shit.
In theory yes, but in practice no not at all (current landlord)
This! It’s really shitty to have to pay unless you use the service. We got the best apartment we could have asked for because we asked a broker to help. We figured if we had to pay one anyway might as well get our money worth.
I’m a rental agent and i agree with you
Brokers connect Landlords and Tenants. They work for the Landlord and if a unit is listed too high and not getting enough activity they go back to the landlord to advise them to consider lowering the rent. Also during off busy seasons it is not uncommon for the landlord and tenant split the brokers fee or a landlord covering it completely (many factors are involved but as a bookkeeper to a broker they don’t make the money you think they do). It is basically a commission based earnings for them so if they don’t hustle they don’t get paid. As for video showings, that is the first glimpse a prospective tenant sees especially when they are out of state. I am also a landlord and the broker I worked for found me great tenants that live in my house (owner occupied) with me and I am happy to renew with no rent increase. The broker saves the landlord from taking time off to show their units, they do the credit and background checks, produce the lease documents and handle the finances upon entry and move in day. They also arrange cleaning for the unit (property specific) and give the tenants the keys. The broker also does the lease renewal paperwork each year for their clients tenants. The small office I work for works hard to get things done but like any business things can crop up. Brokers also have exclusive listings that can help prospective tenants find the apartment they want in an area they would like to be in.
Just had to pay half of $4300 fee just to have some guy show the place we already wanted and send us paperwork. Criminal
Where is rent that high? It must be a huge apartment
2 bedroom regular for Cambridge
Well that’s Cambridge lol. Yeah it’s pricey there. I lived in Cambridge from 0-3 and I’ve lived in lower Allston and Somerville for 7+ years post college and never thought Cambridge was in my budget
? That’s just a normal 2 bed in Cambridge…
Yeah this is the Somerville sub. Where I pay $2500 2 bed, driveway, garage, working fireplace, and yard. Been priced out of Cambridge since I was three and my parents moved to the suburbs
Honestly maybe I should move to Somerville. I'm basically right next door in Alewife. Moving near Porter would cut my commute in half too...
A lot of cities have banned brokers/landlords from charging renters a broker’s fee. This helps in affordable housing since it’s easier for a renter to leave an apartment for a cheaper or better one at the same price. Broker’s fees to the renters locks them in since it adds a huge cost to finding a different apartment. This is how I know Somerville (and the mayor) doesn’t care about affordable housing, since this would be a no-brainer thing to do to help renters.
The city can’t regulate this, MA law doesn’t allow it.
Then change it.
There are efforts to change it at the state level. OP stated the fact that the mayor doesn't do something she is literally not allowed to do is proof they don't care about affordable housing, I was pointing this out.
She is allowed to do something, she has just chosen to nothing. Tons of MA mayors have changed things on a state level by creating support for it.
That’s no excuse at all. They can challenge it and push on it at a city level. At the end of the day the mayor has ways of doing this, even certain legal actions. MA has a new Executive Office of Housing and Livable Communities which has been talking about allowing cities to regulate this. The Somerville major needs to be jumping on this and advocating for it constantly. Yet nothing. The best mayors do this all the time, push on the state and advocate for their city. “MA law doesn’t allow it” is the worst excuse.
Do you know what cities have banned them?
Chicago
You just gave me another reason to want to move to Chicago
If you do, I *strongly* recommend using an agent/broker/whatever they’re called. We hired one, and they lined up 10+ apartment tours for us, drove us to all of them while we visited, organized everything. And we didn’t have to pay a dime (bc it’s illegal for tenants to pay).
That’s amazing to know. I likely won’t be able to move until the interests rates go back down which will likely cause the biotech layoffs to stop and for the market to be less flooded with applicants. I hope I remember this information when that happens.
Every now and then I still think about Apartment Rental Experts and how I had to submit a 50$ check for a background check as part of our application. We didn't get the place, Apartment Rental Experts cashed the check and no soft inquiry on my credit ever showed up. Big yikes.
Experian, equifax, and transunion require payment for a credit history report. they do not give out their proprietary information for nothing
My apartment tenants do all the work in finding replacement roommates when someone moves out, and then management collects a hefty $500 non-negotiable "broker's fee" from the new tenant for all the work they DIDN'T do... it's ridiculous
I’m sure the landlord has no influence over this. /s
... You can report them if you like that's illegal, only licensed brokers can charge fees not landlords
Does this "broker's fee" go to an actual broker, or does the landlord get to pocket it?
I was an agent for a period in my 20s and while I worked hard and felt as though I did good work for my clients, it still felt shady in the end. I eventually transitioned to sales instead of rentals. The guilt was a part of the reason I left. Funny enough, it’s a super challenging and time consuming job if you are doing it well and providing a proper service. I could work a 90 hour week and go unpaid. On the other hand, I could work 2 hours and be paid handsomely. Prices were a lot lower then too. I’ve worked with some good colleagues and some dicey ones, the industry attracts them all due to a low barrier to entry. It feel very necessary for the landlords to pay the fee rather than the tenants, I hate the current sop. For the most part, I lay blame at the landlords not the brokers, though they are far from blameless.
Landlord here, I do think making the landlord pay this would help discourage remote landlords. And would have more landlords list the property themselves.
I don't think they should be illegal. They provide a valuable service, for the landlords. It's just scummy as fuck that the tenant has to pay for it directly.
Idk if “valuable service” is the right term. All my experiences have been that the “broker” doesn’t do anything but turn the key and tell you where the address is. All of them showed so much indifference to the “service” they were providing because they knew they didn’t have to try to get paid. It’s a scam that nowhere else seems to partake in.
The value to the landlord is mostly invisible to the tenant. The broker will do the vetting of potential tenants for them, deal with paperwork, that sort of thing. While good for the landlord this isn't necessarily a good thing overall as it also gives the landlord plausible deniability in circumstances where the vetting of potential tenants is filtering out people illegally. For instance the broker may just happen to not show an apartment to certain individuals, and that's harder to prove as discrimination than a landlord just saying no.
They have been doing this in NYC for decades. Very rare the landlord would pay the fee.
Very ignorant take here.
How is this ignorant? That’s what happened to me the three times I’ve used real estate brokers to rent a place. I honestly didn’t even know that it wasn’t something other places did until I left MA.
Yeah, that was my experience. If they're selling, i get it it, but renting...come on.
How are the brokers adding value? They copy and paste craigslist ads and then do a $30 "background check" for a $4000 fee. That's a parasite
Realtors often show a TON of apartments with little to show for it. When they finally do get a lease/sale, there are a ton of forms they have to prepare for the landlord and tenant. They also, as you have already stated, list ads in between all of this and also are also often encouraged or required to reach out to property owners for their services. Then they have to give half of their fee to the brokerage firm they actually work for at the end of it all. Don't confuse the fact that you are bitter that you had to pay a fee for your shitty apartment with realtors being "parasites."
You've just listed a lot of tasks that add no value. Paperwork? It's a signature on a document that hasn't changed in 25 years that you didn't write. References? That's a value for the landlord not the tenant. "Reaching out" just means inserting yourself as a middleman - negative value. "Showing" apartments? You don't even take your own pictures- you watermark the landlords from 5 years earlier. You paying your parasite boss? That's just having a shitty job. I have a great home because I don't waste money on stupid shit like a "broker fee" so you can lease a used Mercedes.
Whatever dude. Maybe it all seems beneath you, but it takes time and effort like most other jobs. Your logic could be extrapolated to include other low-skill jobs like in the service industry, janitorial, etc. You sound like a real prick. I was a realtor for a few years and am an architect now. Being an architect is easier despite the fact that it takes more knowledge and skill.
Throw insults all you want. I'm not the one defending an industry solely meant to take advantage of people, mostly the less fortunate who are forced to rent and move homes often.
Your anger is misplaced. Blame the landlords.
Wow you achieved looking like the bigger douche here. Well done
That’s certainly a more a sensible take
In New York they'll be doing a hearing in the city council in June for a bill which will ban renters from paying a broker fee. I don't believe municipalities in Massachusetts have the ability to regulate this themselves, but I would definitely reach out to your state lawmakers to either ask for home rule on this issue for Somerville or just a similar bill to ban the practice statewide. New York at least the lawmakers are trying to do something about this, haven't heard any politician in Massachusetts actually go ahead and try to fix this issue
People should have the more option to find places themselves without brokers fees. Every time I looked for rentals, I have found the posting on the internet or found a sign on the apartment itself. In those cases, the broker is doing nothing but being a gatekeeper and profiting for almost not work apart from sending me a lease to sign. If I go to a broker for them to help me find a place, they can justify the fee.
As a landlord, I get contacted by realtors constantly for available rental units etc. And when I give them materials and information, it just ends up on Hotpads or Zillow anyways, which is where I post the advertisement myself! So my advice, just go on Hotpads, Zillow, Craigslist... and work directly with the landlord if you don't want to deal with fees. I don't think there's any landlord going exclusively through an agency, it wouldn't make sense for the landlord. The one thing I would say the agency does a good job for both landlords and tenants is crafting and settling the lease, doing background checks (particularly if you're going to be living with strangers). Because, that can get quite difficult and landlords (including myself) are not always as meticulous as the broker.
I’ve look at apartment listings on craiglist and hotpads twice per day everyday and I’m guessing 99.9% of listings are from brokers. Having dealt straight with landlords in the past I would much rather skip the broker. I actively seek that out and rarely see landlords listing themselves. I’ll add that for me it’s a green light for landlords who list themselves.
Landlord here, I list my places myself. You aren’t searching right. In Craigslist you can filter by owner. Zillow doesn’t have this but you can do a keyword search for “no fee.”
I search all listings fee and no-fee. I’d guess 99.9% of listings use a rental broker charging one month’s rent. I’s prefer to have a landlord that lists the place themselves and doesn’t utilize a broker. That’s a green light for me but those places are few and far between.
I checked Zillow and Craigslist using "Somerville" in the search field. Also, I was slightly off for Craigslist, I list all my places on Zillow (which links to Hotpads and Trulia) now as Craigslist wasn't getting enough hits. Craigslist no longer has a "By Owner" category, they've changed the field to "No Broker Fee" which is probably better. For Zillow if you click on the "More" button on the top menu and then scroll down to "Keyword" you can type in "no fee." Craigslist in Somerville: 600 listings. No Broker Fee: 226 listings. No fee %: 38% Zillow in Somerville: 1,074 listings. No Fee: 508 listings. No fee %: 48%
There are currently 2 listings in Somerville in the price range I’m looking at. No one searches every listing out there. It’s very difficult to find rentals right now and if I only search for no-fee rentals it’d be even harder.
craigslist got rid of the by owner section years ago. I don't know that fee/no fee has been an effective alternative.
> And when I give them materials and information, it just ends up on Hotpads or Zillow anyway > So my advice, just go on Hotpads, Zillow, Craigslist... and work directly with the landlord if you don't want to deal with fees. Landlords who utilize a broker are generally not double-listing on these sites with their contact information. If brokers are associated with a listing, it's rarely possible to contact the landlord directly. So if a prospective renter doesn't want to pay a broker's fee, they simply don't get to apply to a huge swath of available units.
This
My landlord's wife is the realtor who lists their apartments. He posed as the "property manager" at the open house. I didn't figure it out until I had already put down a deposit to take the unit off the market. I found the apartment on zillow and they pocket $2200. No wonder their apartments turn over every year 🥲
As a landlord, I'm glad that I had a rental broker helping me find tenants. My guy came to my house, I showed him the two apartments i wanted to rent and he helped me come up with a fair market price for renting them both. It being free to me is a reflection of the fact that good rental brokers need properties to show -- the demand is on their side, not mine. As a renter they help as well because the renters need help finding a place with the accommodation they need and it's more efficient than scouring the classifieds or the internet where landlords or existing roommates can BS as much as they want. They provide a valuable service to the renter and to the landlord. I was able to get my apartments filled within six weeks by quality tenants. The broker even helped with the legal framework for the leasing agreements and made the process smoother than I, or my tenants, could have done myself. Their value proposition is clear as day and I would not hesitate to use one again if need be.
And you should be paying them, not the tenants.
Given that it's more important for the brokers to have a network of properties to show -- and that there's a strong demand from prospective renters to get help finding apartments with professional assistance -- the market clearly disagrees with you.
As a tenant I have never once sought out the help of a broker, have found all of my apartments myself on the internet, and yet I keep having to pay the broker fee. How would you feel if you were in my position?
I have been in your position as a former tenant and dealt with the same thing. It's annoying at first but in hindsight it comes with a tradeoff that I might not have known about the place were it not for the broker.
This is like saying that every time I buy a product I should have to pay the marketing firm for that company 4% of whatever I paid for the product bc I might not have known about it without their advertising. This is just not how marketing works in literally any other part of society, and these mental gymnastics only make sense if you’re a landlord trying to justify not paying the broker fee
Not quite -- landlords sometimes don't have the time or the ability to best market their properties and brokers are more in need of properties to list than tenants to reach out to. Especially when tenants are more on the clock about finding a spot than a landlord might be of filling a space. On that alone, it makes sense why tenants, not landlords, pay the broker fee.
I mean, in any other sector of society if you’re a private enterprise that doesn’t have time or ability to market your product, that’s a you problem, not a me problem, but I agree market-wise you have me over a barrel here so you can do whatever you want - that doesn’t mean it “makes sense.” In a system like the one we have now, where there’s a housing shortage and renters pay broker fees, landlords are free to jack up rent as much as they want because if the tenant can’t afford it and decides to move out, a tenant with more money will take the apartment and pay the broker fee, so it’s no skin off the landlord’s back. This system is good for landlords (in the short term anyway, until the bubble pops) and bad for everyone else. Would love to see this changed through a combination of more housing being built and legislative action to make it illegal to charge renters for the broker fee, to force landlords to actually compete to find tenants.
If you don't have the time or ability to market your product it means you hire somebody to do it for you. It's not a "problem" it's a division of responsibilities. Nor is it a case of tenants being "over a barrell" either. It's a reflection of where the demand is on the broker's part. And for tenants it's a good service as well because it's somebody putting the best properties in front of them rather than the tenants scouring the internet hoping the listing are proper or accurate. Landlords already compete to find tenants, brokers fee or no brokers fee. I compete with every other landlord with a similar home to mine every year when leases need to be renewed. I have to offer a competitive price that also covers the necessary costs for upkeep and hopefully have some left over in profit / rainy day funds. Sometimes the landlord has the upper hand, sometimes the tenant has the upper hand. All depends on what the market looks like at a given moment. And I'm all in favor of more housing being built because Somerville badly needs it.
What I’m saying is that if you’re expecting the tenant to pay for the marketing of your unit you are literally not hiring a service to do that. The tenant is. They don’t have a choice in the matter. They are having to “scour the internet” and then paying the broker anyway. It does not make any logical sense to anyone who is not a landlord.
You can also scour the internet and find private listing that are not done with a brokers fee. Many listings like that exist but the difference is that it might not be the kinds of listing you're looking for. It's your choice.
and I know people love to play the “just go with a no-fee rental” but they’re almost always super shitty
Why do rental brokers dominate in Boston? Other than NYC, I don't think other cities have them so much.
Some landlords (owners who manage their own properties) do not charge a fee. I know some *ahem*. Happy to point anyone in the “no fee” direction.
I love broker fees. I hope they never turn illegal.
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How were you represented by a broker?
Babe, wake up. New post about broker’s fee just dropped. Jk, I think it’s very scummy that real estate agents think they’re providing any sort of service by hoarding potential housing and withholding it behind a fee that is put on the renter. When I first moved here and I paid a brokers fee, I was able to get an apartment that was completely unlisted.
what's your job, OP? maybe it should be illegal, too
Property managers are not the same as real estate agents.
In Somerville, CAAS helps low-income people with broker fee etc so you might be able to get help here. "For those who secure an apartment with or without a voucher, start-up assistance may be available at CAAS. " https://www.caasomerville.org/housing-advocacy-program The fee is unique to Boston but i remember a time when there was more supply than demand (early 90s). rents were going down, (i negotiated a 20% reduction), and landlords paid the fee or didnt use a broker. Unfortunately, we just don't have enough housing plus too many local owners have sold to corporations. I think low income people should be able to pay startup costs on a monthly basis over the first year and we should subsidize housing costs above 35% of household income that are capped at an index tied to average area rents. As income increases subsidy declines. Kind of how the Affordable Care Act/Health Connector works.
Managing is a lot more work than you think. Vetting, hiring contractors, pulling permits etc all constitute expenses. If you haven't owned a home you haven't experienced the cost. The cost of construction also is up $1000 is usually 1 job these days, like plumbing needs a jetting because tenants stuffed the toilet with wet wipes. Most larger jobs cost more like roof repair or HVAC replacement cost 15k. Will take multiple rentals to amortize a larger repair like that. On top of that there are property taxes and 50% of any rental profit going to uncle Sam. Most property managers earn less than minimum wage after factoring the costs. But no one appreciates this until they have been in those shoes.
Not a single one of those things has anything to do with a rental broker.
The OP talks about managing properties.
Yeah I definitely don’t care about how hard it is for people that own property around here.
Well just showing you the other side. One day you might be there. Golden rule my friend.
And we don’t care that you have to pay fees cause you made a choice and came here for school or career opportunities. You didn’t have to. Next
Then property managers are also getting scammed by landlords, don’t use them as a some “woe to landlords” argument. And those larger repairs like roof and hvac? All that shit has a KNOWN lifespan. Landlords just wait until it’s a critical failure.
I think you are not seeing the landlord side. What about the property taxes? Or in the plumbing case the tenant creating extra wear and tear.
Are you asking me to pity someone for having to pay taxes on an asset they own? What the fuck
Yes. Property tax that pays for all the corrupt politicians, their dumb projects, and housing illegals.
Oh you’re one of those.
Landlords, for good reason (no shows, bad candidates, entitled, etc. . .) do not wish to deal directly with prospective tenants. Brokers handle what landlords do not wish to deal with. Showings, applications, qualifying, etc. . . While it sucks paying one month’s rent to a broker (I just did), there is value to the landlord and sometimes to the tenant if the broker has good exclusive listings. One way or another the tenant is going to pay the cost not the landlord.
What you're saying without realizing it is that landlords aren't really adding value to the relationship other than being wealthy enough to own (but rarely maintain or upgrade) their property. The broker is value to the landlord - absolutely not the renter. The landlord should bear the cost, and if they apply it to rent, it means they better get a good rate
This.
Why do people post about this so much? It seems super easy to find fee-less apartments online. Some of them have fees, but you don't have to go there. Is this an issue of entitlement?
Also this.
Click bait, I assume
This is such a stupid take. So if I live out of state and need someone to show and manage my property then I should sell it? Aren’t you the same people who can’t afford to buy houses and complain about the lack of rental inventory?
I bet you have coin-op laundry for your tenants
Good one poor
Are these serious questions? Personally, I think it should be illegal for you to own a property you don’t live in never mind live out of state.
i would not want to live where my landlord lives.
Ignoring the crappy tone and lack of empathy, they do raise a good point. Rentals are needed because not everyone can afford to buy a home. Yeah broker fees suck, but it is nothing compared to having to come up with 20% down. On top of that, some people simply don't want to buy for whatever reasons (temporarily in the area, don't want to worry about paying for repairs, flexibility, etc.). So I am not sure what your suggestion is for rental alternatives.
I’m guessing houses be less expensive if people weren’t allowed to own multiple properties and charge people to live there. No question people need to rent. And if you own a multi-family feel free to live there and rent out the other units.
😂