Images of newly launched NYC rentals offering no fee apartments
New York is known for its high rents, and a recent study confirmed it: A report by RentHop found that New York City accounted 39 of the 100 most expensive zip codes with the most expensive rent in the United States, with two Manhattan neighborhoods in the top ten. Some of this can be attributed to low housing supply, which the recently approved City of Yes for Housing Opportunity aims to address with as many as 82,000 new housing units — which could in turn dampen escalating rents.
In the meantime, the term net effective started to seep into a growing number of rental listings in the 2010s, a time when New York rents were on the rise, and shows no sign of fading away. This article delves into what the term means as well as the pros and cons for both renters and owners. We also look at recently launched rental buildings, several of which are offering special offers with, yes, net effective rent.
In the meantime, the term net effective started to seep into a growing number of rental listings in the 2010s, a time when New York rents were on the rise, and shows no sign of fading away. This article delves into what the term means as well as the pros and cons for both renters and owners. We also look at recently launched rental buildings, several of which are offering special offers with, yes, net effective rent.
39 of the 100 priciest zip codes in the U.S. are in NYC. https://www.renthop.com/research/most-expensive-rental-zip-codes-in-2024/
In this article:
Net effective rent defined
Renters typically sign one-year leases and commit to paying a fixed monthly rate. In most rental listings, the rent posted on the listing is the actual rent. In the case of "net effective" listings, the monthly rate in the listing is lower because the owner is throwing in one month (and in rare cases, more than one month) of free rent as a concession to attract renters.As an example, let's say you're renting a studio for $3,000/month. Your annual rent would normally be $36,000, but if the owner offers a net effective incentive for one month, the advertised rent on the unit will only be $2,750. Importantly, this doesn't mean you'll be paying $2,750/month. It simply means that for one month (usually, the first or second month of the lease and sometimes the second-to-last month of the lease), you won't be expected to pay rent at all. While this may sound somewhat deceptive, it is entirely legal if the owner has clearly stated the rent is net effective in the apartment listing.
The impact of net effective rent on brokers’ fees
Broker fees are generally based on gross rent rather than net effective rent, so unless otherwise negotiated, broker fees, which, depending on the current market conditions, run anywhere from 10 to 20 percent, are not lower on net effective rentals.Why owners offer net effective rent
If an owner lowers the cost of their unit (e.g., reduces a studio from $3,000 to $2,750 to respond to a softer market), when the unit goes back on the market, listing it at $3,000 or higher will be more challenging since, in a digital era, prospective renters can now easily determine the unit's previous preferential rental price. By contrast, when owners list the net effective rent, the unit doesn't permanently lose value. While a renter may get a concession for one month's rent and only pay $2,750 in year one, officially, the unit's rent has never declined. In addition, since the concession is only for one month in the first year-long lease cycle, if the tenant stays for many years, the owner doesn't continue to generate lower revenue.
Ruby Chelsea, #2NN (Douglas Elliman Real Estate)
The advantages and disadvantages for tenants
The advantages of a net effective deal to renters are fairly clear — you get to live rent-free for one month and, if you're lucky, even two months during the first year of the lease. Given that moves nearly always entail at least some additional costs (e.g., the cost related to hiring a mover or renting a moving vehicle) and often entail other unexpected expenses, including the purchase of paint or new furniture, the savings from even one month of free rent can feel like a huge windfall for new tenants.However, when renters take advantage of a net effective incentive in a downward market, there is a risk of locking into a rent that may end up being higher than the market rate. While it is sometimes possible to negotiate one's rent (as many local tenants did during the 2008 market crash and again during the first year of the Covid-19 pandemic), in most cases, negotiating a permanent rent reduction is only possible under extreme circumstances.
Is it a form of false advertising?
As long as the owner or listing agent is fully transparent about the rental rate being net effective, it is entirely legal to list a unit at the net effective price. Of course, just because something is legal, doesn’t necessarily mean it is ethical. While the ethics of offering net effective concessions rather than actual price cuts on units is open to debate, since the net effective lingo has started to show up in rental listings, several legal cases have helped clarify at least a few questions about this murky rental practice.As ruled in Flynn, et al., v. Red Apple 670 Pacific St., LLC, lower rent offered on a net effective unit is not grounds for a permanent reduction of one’s legal rent since the law clearly distinguishes between a rent concession and preferential rent and is clear that rent concessions have no impact on legal or preferential rents. For tax purposes, however, owners must report the amount of rent they collected during the year and not the rent concession rate since failing to do so could give them an unfair tax advantage.
Newly launched rentals with no fee apartments / special offers
Aurelia, Harlem
2 months free rent on an 18-month lease
Aurelia (Nest Seekers International)
At boutique rental Aurelia, all units feature large windows, gleaming hardwood floors, and individually controlled heating and cooling. Kitchens come equipped with quartz countertops and stainless steel appliances, and those who’d rather eat out can make the most of the building’s address near popular Harlem restaurants. It is also situated near Morningside Park, Central Park, and the 116th Street 2/3 and B/C trains.
The Park Overture, Washington Heights
1 month free rent on a 12-month lease
The Park Overture (MNS)
At the intersection of Broadway and Nagle Avenue, The Park Overture is distinguished by its curved corner. Inside, all apartments feature light-filled interiors, recessed lighting, kitchens with custom cabinetry and stainless steel appliances, and in-unit washer/dryers. Residents arrive to a furnished lobby, and amenities include a fitness center, a pet spa, bike storage, and a furnished courtyard with grilling and seating areas.
Forty Six Fifty, Washington Heights
Up to 3.5 months free rent on an 18-month lease
Forty-Six Fifty (Kevin Chu)
At Upper Manhattan rental Forty-Six Fifty, the apartments start on top of a Fine Fare supermarket and School on the Square charter school. All units feature ceilings over 9 feet high, oversized windows, wide plank flooring, kitchens with Calacatta Capri quartz countertops and GE appliances, designer baths, and in-unit laundry.
Residents arrive to a double-height lobby with green wall and package room. Amenities include a fitness center with yoga room, a game room with billiards table and video games, a children's playroom, a coworking lounge with phone booths, a lounge with demonstration kitchen, and a landscaped terrace with grills and Fort Tryon Park views.
Residents arrive to a double-height lobby with green wall and package room. Amenities include a fitness center with yoga room, a game room with billiards table and video games, a children's playroom, a coworking lounge with phone booths, a lounge with demonstration kitchen, and a landscaped terrace with grills and Fort Tryon Park views.
Hanover House, Downtown Brooklyn
Up to 1.5 months free rent on a 13-month lease
Hanover House (Nancy Packes Inc.)
In a bustling section of Brooklyn, Hanover House stands out for its arched windows at base level, curtain wall of windows, and tower with reddish-brown panels. All one- to two-bedroom units feature ceilings up to 9 feet high, 7” wide white oak plank flooring, kitchens with Caesarstone countertops and stainless steel appliances, porcelain-tile baths, customizable closets by The Container Store, and in-unit laundry.
Residential amenities span over 30,000 square feet over four floors with two landscaped terraces overlooking Manhattan skyline views. Interior offerings include a fitness center, a party room, coworking lounges, a game room, a screening room, and a penthouse-level lounge and dining room with terrace.
Residential amenities span over 30,000 square feet over four floors with two landscaped terraces overlooking Manhattan skyline views. Interior offerings include a fitness center, a party room, coworking lounges, a game room, a screening room, and a penthouse-level lounge and dining room with terrace.
99 Fleet Place, Downtown Brooklyn
Up to 1 month free rent on a 19-month lease
As the recently launched 99 Fleet Place shows, Downtown Brooklyn’s residential boomlet shows no sign of slowing down. All studio to three-bedroom units are reached via keyless entry and feature 9’ ceilings, LED lighting, kitchens with energy-efficient appliances and granite countertops, baths with custom stonework and backlit vanity mirrors, and in-unit laundry.
Amenities at this doorman building include a fitness center with yoga studio, a pickleball court, a lounge, a coworking space, a children’s playroom, a screening room, and a roof deck with grills, ping pong tables, lounges, and a dog park. The building also offers bike storage and on-site parking, but is located near nine different subway lines.
Amenities at this doorman building include a fitness center with yoga studio, a pickleball court, a lounge, a coworking space, a children’s playroom, a screening room, and a roof deck with grills, ping pong tables, lounges, and a dog park. The building also offers bike storage and on-site parking, but is located near nine different subway lines.
Grand Avenue Lofts, Clinton Hill
6-month gym membership
Grand Avenue Lofts (CityRealty)
This new Clinton Hill rental would appear to have been named in honor of its apartment layouts: All interiors feature high ceilings, oversized windows, and open-concept layouts. They also feature kitchens with high-end stainless steel appliances, baths with sleek finishes, and in-unit laundry. There isn’t a gym among the amenities, but the building is offering new residents a six-month gym membership.
Grand Avenue Lofts (Compass)
The Vander, Windsor Terrace
3 months free rent on an 18-month lease
The Vander (Serhant)
The Vander is a low-rise rental situated in a verdant section of Brooklyn between Prospect Park and Green-Wood Cemetery. All one- to two-bedroom units feature high ceilings, oversized windows, modern kitchens and baths, central heating and air conditioning, and in-unit laundry. Amenities include a fitness center and roof deck; and, between the bike room, on-site parking (for an additional fee), and the nearby Fort Hamilton Parkway F/G trains, there is no shortage of ways to get around.
The Clairemont (Nooklyn)
On the corner of Jackson Avenue and 44th Drive, leasing is underway at The Clairemont. All 48 studio to two-bedroom units feature open layouts, oversized windows, designer kitchens, and in-unit laundry. Select units have private balconies, and all residents have access to an amenity package that includes a fitness center, a lounge with coworking station, a dog run, and a roof deck. It is well situated near the Court Square transportation hub; but between SculptureCenter, MoMA PS1, and several popular restaurants, there is much to offer close to home.
Hearthstone, Astoria
2 months free rent on an 18-month lease
Hearthstone (MNS)
At sprawling new development Hearthstone, over 350 studio to two-bedroom units feature oversized windows, in-unit laundry, stainless steel appliances in the kitchens, and rainhead showers in the baths. Amenities at this doorman building include a fitness center with yoga studio and adjacent terrace, a party room, a children’s playroom, a courtyard garden, and a roof terrace with dining and lounging areas. Between the pet spa and courtyard dog run, four-legged residents are as well catered to as the two-legged.
Parkhill City Luxury Residences (Mishkan Group)
Leasing is underway at Parkhill City Luxury Residences, a new development across from Rufus King Park. All units feature oversized windows, hardwood floors, kitchens with granite countertops and stainless steel appliances, baths with quartz stone vanities, GE climate control, and in-unit laundry. Old meets new with the amenity package – the building’s circa-1904 lobby has been beautifully restored, and contemporary offerings include a fitness center, a lounge, a children’s playroom, a screening room, and a furnished roof deck.
The Orion (Nest Seekers International)
Long Island City and Astoria’s rental markets show no sign of slowing down (see the latest cases in point above), and Sunnyside is not to be overlooked either. At Orion Sunnyside, all 48 studio to two-bedroom units offer a sophisticated living experience with 10’ ceilings, floor-to-ceiling windows, kitchens with stainless steel appliances, baths with porcelain tiles, and generous closet space. A generous amenity package includes virtual doorman service, a package room, a lounge with coworking space, a central laundry room, and a roof terrace with Manhattan skyline views.
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