If you’re an average Brooklyn brownstone landlord, you already know the leasing challenges you face as the neighborhoods continue to evolve. And when summer turns to the fall, a vacant apartment can mean a long-term drain on your finances.
When renting these days, you are competing with more than just the family next door – today’s supply and demand includes that huge development down the street, with the 200 brand-new balcony apartments, and its amenities. These could include a doorman, laundry, gym, dog parks, garages, coffee bar, lounge and work areas, and outdoor space (including grilling).
If that’s not tough enough, these developments offer hard-to-refuse incentives, paying the broker’s fee and/or spotting the tenant one-month free rent (in some cases, two months).
Of course, now that there is a glut of luxury, amenity-filled apartments stretching from 4th Avenue all the way to the Bronx, the developers are doing whatever they can to lure new business. Tenants’ heads are turning toward these amenities and incentives, but where does that leave you?
You’ve already done the math: an average apartment in the Slope/Windsor Terrace is about $4,000. After the broker’s fee (if it’s 15%), the cost rises to about $7-8,000. Don’t forget to factor in the security deposit as well as the first and last month’s rent.
Often, during the off-season, panicked landlords think, I’ll reduce the rent, and then I’ll get the place rented. But Saber says that you don’t have to resort to that drastic measure, which will lose you even more money in the big picture.
Instead of rent reduction, consider these tips:
Offer to pay the broker’s fee. This is win-win for everyone involved. The broker still makes money (maybe not as much as he would want to make, but still). Think of it: if your apartment stays vacant even one more month, you lose money. And that could be just the beginning of a slippery slope. So offer the fee to the broker and get the apartment rented faster.
Extend the annual lease – think summer. Consider the timing of a lease’s expiration, and how that time of the year will pose vacancy challenges for you. Solution: offer a year-and-a-half lease as opposed to an annual lease. This positions you for a better time of year to rent the apartment when it becomes vacant again, when most tenants are shopping (most common rental period: summer). Don’t let a lease expire in the fall, when apartment shopping is on the wane, or practically non-existent. As you know, by holiday time, the situation will only become worse.
Be flexible. Be open to working with the prospective tenant’s tastes and preferences. Let them know that, in exchange for signing the lease, you are willing to consider some changes and improvements. For instance, let the tenant choose a neutral color paint – and you split the cost with them.
Don’t let another “vacant September” be a troubled time of year for you. Saber is a property owner himself, so he understands every type of brownstone landlord and property management concern. In the time it may take agents from bigger brokerages to get details approved (sometimes days), Saber can get that apartment rented fast, and for a lesser fee.
For more information on how Saber and Limestone Realty can help you with your property rentals, click here.