First time landlord in NYC - Do I need a real estate agent?

[Minji Kim]

Hi,

I currently own a condo unit in NYC and am looking to rent it out in a few months (transition it to an investment property). Do you recommend using a real estate agent to help find renters? 

Without a real estate agent, are there software tools that I should be using? (e.g. scheduling showings, background checks, creating a lease)

Thanks!

[Abel Curiel]

Hello @Minji Kim!

Great questions!

Regarding the DIY approach:

- Background checks can run you $20-$50 each from platforms like tenantbackgroundsearch.com, American Apt Owners Assoc., e-renter, rentprep and more

- Dozens of platforms, listed here, allow you to post your rental listings online for a range of fees depending on subscription length, account type, and features requested

- Run comps using 3rd party sites to see what recent rental apartments have rented for (not to be confused with active rental listings), & price your rental unit accordingly

- Lastly, hire a professional photographer or cash in a favor from a friend with a good camera!

You do not need an agent to do any of this but if you'd like to spare some of the expense and save a ton of time, I'd recommend it
Time consuming parts related to the DIY method:

-initial communication with prospective tenants aka handling inquiries

- showings/walkthroughs 

- collecting application documents

- following up with tenants

- coordinating interviews & lease signing 

- & more!

This can become a full-time job for you and a Realtor oftentimes handles these tasks while collecting compensation from the tenant which means you could potentially only be paying for a tenant screening report.

Best of luck to you locking down a great tenant!!

Abel

[Minji Kim]

@Abel Curiel thanks for the quick response! Appreciate the advice. 

[Mohammed Rahman]

Hey @Minji Kim! I'm an investor & realtor based in NYC - before marketing your unit, I recommend double checking to ensure that you're in line with your condo boards' rules for renting out your unit. 

In terms of using an agent vs. not using one, I've done both and typically using an agent will save you a lot of time/headache depending on what you're comfortable with. For example, you can do all the legwork yourself of screening, marketing, showing, follow ups, etc. if you have the time — but when I tried to do it for my units I always found myself getting frustrated because it took time away from my other responsibilities (this was before I quit my job and got into real estate fulltime). 

In NYC, most of the time the tenant is responsible for paying the broker(s), so you wouldn't really be paying anything if much (maybe you decide to pay for the tenant background/screening tools etc. but sometimes that can also be collected as part of the application costs). 

If I'm in your shoes, you can try it yourself for a few weeks and see if you can find someone - good luck! 

[Minji Kim]

Thanks @Mohammed Rahman - I am leaning towards trying it myself for a few weeks to get the experience of it but will bring in a broker if the process gets overwhelming. Appreciate the advice!

[Mohammed Rahman]

The added advantage that you will have if you do it yourself @Minji Kim is that you can advertise your rental as NO BROKER FEE - this opens up your tenant pool as many people struggle with coming up with all the cash needed (in NYC: 1st month rent AND security deposit AND broker fee).

The broker fee is usually 1 month rent, so doing it yourself should help attract more people (as long as you don't charge a broker fee).

[Eliott Elias]

Use a property manager. 

[Jason Lee]

I represent around 70 condo landlords in NYC. Many of them, like you, used to live in the condo as their primary residence and converted them to investment properties when they traded up or moved out of state. Many of them also used to try to find tenants on their own with varying success. For some it worked out fine, and for other it was a disaster. Most did not come close to properly verifying the tenants, for income, prior rental history, or background and credit, and many have no idea what the rent laws are in NY. They don't know what they don't know, and that can cause problems. On top of that the rental market changes very quickly here. Prices, inventory, concessions, who pays the fee... these tend to shift very quickly and most condo landlords can't keep up. If it's between a DIY landlord or an experienced landlord's agent (who's intimately familiar with what's going on in the market, meets with a thousand tenants each year, and reviews a couple hundred applications each year), I would strongly recommend the experienced agent. They will attract better tenants, property vet them, and probably net you more rent (including at renewal time).