Avoiding Apartment Fees

Before anything else, an individual renting an apartment needs to understand exactly what a fee apartment is. When a broker assists a client in locating a new apartment, the broker must be compensated for the work they performed, so the broker in turn charges their client a fee. Usually, the fee is 15% of one year’s rent. However, in most markets within the United States, this 15% fee does not exist. For the broker to receive compensation, they are usually paid by the apartment in question’s owner, since the broker located them a qualified tenant.

Many opinions have been formed over this process, however. Sometimes it is reasonable to charge something, due to time constraints, etc., but sometimes brokers are able to locate apartments for tenants in a mere 10 minutes, but they still receive the 15% fee. So in simple terms, the broker would receive, say, $3,000 for 10 minutes worth of work and research. This has caused quite an uproar with certain people who feel it as being extremely unfair.

For the individual in search of an apartment, there are two methods for avoiding fees. The most common way to avoid fees is to rent an apartment directly through the property owner. If owners offer brokers an owner payment for the apartment that is leased out to a tenant, the broker is compensated with the owner payment, therefore eliminating the need for the broker to charge a fee.

The owner of the apartment offering the owner payment to the broker allows the broker to advertise the apartment as a “no fee” apartment, therefore attracting many more potential tenants, even though the tenant doesn’t necessarily receive a better deal.

As a whole, the mass majority of potential tenants will more than likely be more interested in an apartment with no fees as opposed to one that has fees.

Pitfalls to Avoid When Finding No Fee Apartments

It should come as no surprise that finding an apartment that fits your needs in Manhattan is a very tough job. There are literally thousands of choices, yet none of them will fit your fancy. Even worse, if you’re looking for a no fee apartment, your odds of finding the right one just go down from there. It can seem very overwhelming at times, but if you know some secrets from the pros, you can find a good, well priced apartment in no time.

Finding an apartment, particularly a no fee apartment in Manhattan, is so overwhelming that most people use a broker to find one. If you give a broker the location, the type of housing that you want, such as a brownstone, elevator, walk up, or any other specific type, and the fact that you only want to find a no fee apartment, they should be able to find your apartment and set up a showing with the greatest of ease.

The reason they are able to find these no fee apartments in Manhattan, especially find them so quickly, is because they are subscribed to a list that alerts them any time an apartment becomes available in the no fee range. However, many times these brokers can cost upwards of 15% of your annual rent.

There is good news, on the other hand. Because of the market shift, many landlords are willing to pay the broker’s high fees in order to get you in to the apartment and paying rent. You can even specify to the broker that you would like to only search for apartments that have landlord who will pay the broker fee for you.

Don’t rely on Craigslist or Kijiji to find your next apartment. A lot of those listings are just brokers looking for leads to find a person willing to pay their 15% fee, and you will not get access to the actual place to live until you pay them their fee.

Apartment Building Loans – What You Need to Know For Today’s Market

It’s a tough time for the real estate market today. Mortgage banks are making their requirements more stringent in both residential and commercial markets, which make it harder for investors to invest in new properties. This means that those looking to buy apartment buildings need to be smart with their decisions and make sure that he is working with a reputable company that has experience with this type of investment when the economy is low. The following is some current information about how the mortgage banks are working.

The rules will not be bent anymore.

In the past, it was not uncommon for a borrower to be a little under the minimum requirements for a loan and still qualify. This is no more. Underwriters at these banks are becoming stricter when it comes to the requirements for getting these loans. In order to qualify, your net worth must meet the minimum requirements or you’re out of luck.

There’s aren’t many loan programs for commercial real estate acquisition or refinance left. In the past few years, it has become increasingly difficult to find a mortgage broker who specializes in apartment building sales. It’s much simpler to find one that specializes in residential real estate opposed to commercial real estate. Not too long ago, it wasn’t very difficult to find and qualify for an 85% loan-to-value mortgage for an apartment building, but the same is not true today. Those people looking to invest in this type of real estate really has their work cut out for there because although there are plenty of brokers out there, it has become increasingly harder to find one that specializes in this type of real estate. I, personally, have never found a broker that handles residential real estate that also has a good track record with commercial real estate.

When you finally do find a mortgage broker that specializes in apartment or commercial real estate, there are several factors that need to be taken into consideration.

First, it is crucial for the investor to understand the fees that will be involved. In most cases, commercial mortgage brokers will charge only one point in fees on an investment. In my past experiences, I’ve seen new apartment building investors try to contact the banks themselves in attempt to avoid this fee. This doesn’t work. Independent investors have to realize that any bank that handles apartment building investments is a broker and will sell their loans to the secondary market.

What most first-time apartment building investors may not realize is that by avoiding a broker to save money, it can cost more money in the long run.

Surprisingly, you will often find the best interest rates when going through a commercial mortgage broker. In addition, when you attempt to get the loan yourself, you’re cutting your options short. When going through a bank independently, you will normally be offered only one or two programs for this type of investment, but when you use a mortgage broker that specializes in this market, your options more than double. This allows you to choose the program that is right for your unique investment.