New York's rental market has maybe never been hotter—vacancies rates in Manhattan are just above 1% and monthly rents are hitting historic highs. So why is StuyTown offering rental inducements that promise no broker fees and a month's free rent to get people into apartments there? One commenter at Bowery Boogie informs that these rental inducements are actually meant to entice people into a situation they will quickly not be able to afford, and allow the property manager to churn residents, with the huge inter-tenant rental increases that allows.
Bowery Boogie's commenter breaks down how one month's free rent that is divided up over a year can sting when it's time to renew one's lease:
For example, a one bedroom typically rents for $3,500 per month. Divide $3,500 by twelve and it comes out to roughly $291.66. Subtract $291.66 from $3,500, and the discounted monthly rent drops to $3,208.84. When it’s time to renew the lease in a year, the rent jumps back to $3,500. The rent increase is based on this number. A typical increase is between 7% and 10%, making the new rent as high as $3,850, a $641.16 increase.
The commenter goes on to explain that if that's too steep an increase and the renter moves out, StuyTown can then raise the rent an additional 20%. Is this a case of caveat emptor for deal-hungry renters unwilling to do back-of-the-envelope math before signing a lease, or is it dirty pool by StuyTown agents setting up renters to fail so they can maximize their units' rents?
· Responding to StuyTown Spots on Spotify [BoweryBoogie]
· StuyTown coverage [Curbed]