The rental market, like any industry or market, has its ups and downs. As it changes, so does this thing called Rental Concessions. So what exactly are Rental Concessions you might ask? Rental concessions are a one time rent concession benefit or incentive offered by the landlord to the tenant, usually to draw more interest to their vacant apartments. A single building can have multiple vacant apartments with each having their own different rental concessions. Meaning the landlord concessions that are provided in order to fill each separate vacant apartment could be different from one another.
There Are Two Common Types Of Rental Concessions In NYC
Let's start with the more popular one which is Reduced Rent. Reduced rent is meant to entice the end renter. It is very common to see advertising for reduced rent apartments. Example terminology that is used in ads are: "2 Months Free Rent NYC" or "One Month Free Rent NYC". Months free rent is exactly what it sounds like. In NYC, many landlord concessions involve providing an incentive of one month free rent or 2 months free rent. This is usually given at the end of a lease term. For example, if you signed a 12-month lease, you would not have to pay rent either your last month or two. This is also where the common term gross rent and net effective rent come into play.
The other type of rental concessions landlords offer are aimed at enticing brokers to lure renters on behalf of landlords. The tactic is referred to as an 'OP' (also known as Owner Pays or Owner Paid). This means that the landlord is willing to pay the broker fee, ultimately signaling to the public that the apartment is 'No Fee' because the renter will incur no extra broker fee charges. Commonly used terms such 'OP Fee' or 'One Month OP' are advertised on websites. The amount that is paid out from the landlord to the broker is in the amount of one months rent. This is why many times landlords advertise the concession and/or property, as one month free and/or a one month OP. See below for examples advertised by Icon Realty.
Keep Your Eye Out For The Extra Month Concessions
There is one note every renter should be cognizant of, and that is if you go with a broker to a building that is paying an OP OR a month free (which is most common) you will lose out on collecting the free month because that sum will be paid to the broker, in these cases it might be smarter to go sans broker so you, as a renter, can benefit the most from the concessions. However, if you go with a broker to a building that is offering an OP AND a month free you can be entitled to collect one month free and have your landlord pay your broker fee.
But what happens if you go to a landlord that is offering an OP AND a month free and you don't have a broker with you? Great question! Although brokers are trained to have your best interest and their fiduciary obligations are to you, it does happen that if you represent yourself in the transaction you can actually gain the best value and negotiate to have the OP relayed to you instead so you can benefit from TWO months free!
Check out these AND vs OR examples to see what we mean:
In these examples, the property manager offers to pay your broker fee, but if you came without a broker you would be entitled to get TWO months free! That's a big deal, it means in a 12-month lease, you will only have to pay 10 months of it which is equivalent to over $5,000+ for this apartment.
Also keep in mind that it is only a one time rent concession and also for new tenants in the building. Some property managers state this in their Ad. For example, if you already live in a building and then see a vacancy and decide you want to move into the new unit, the property manager will block you from taking the incentives they would have otherwise provided to new tenants.
Yes, You Can Easily Find These Rental Concessions On Your Own
If you're a renter looking for a list of no fee apartment buildings and listings in NYC, check out transparentcity.co and use the 'Months Free Rent' filter to find all of those property managers who offer one month free rent or 2 months free rent as rental concessions.
If you're a broker looking on behalf of a client, you can use the same tool to quickly find out which buildings and listings are offering Months Free and OP incentives.