I’m not one for clichés, but if ever there were a cliché that accurately described an everyday occurrence, it would be an old favorite, “finding a needle in a haystack.” Because that is exactly how most New Yorkers, without a rich daddy or Goldman Sach’s performance bonus, would describe the process of finding a great apartment in New York City at a great price.
In the very last months of 2006, I became extremely interested in real estate. Actually, something many people don’t know about me is that I was a licensed real estate agent. I never wound up going into practice, because I got what was then a “dream job” (a purposeful use of a cliché there) at magazine here in Manhattan. Despite not ever going into real estate full-time, I did help out in the practice of it, and I also fell in love with all shows related to real estate.
If you recall, the end of 2006 was a time in which real estate was right past its peak—and I mean infinitesimally past the high point of its existence. This was a period when the prices were still high, but numbers that showed there was something terribly wrong with a growing amount of mortgage defaults in America were just coming in. Television took advantage of this bubble, and I took advantage of television. There were shows about rival designers (“Million Dollar Listing”). There were shows about gay real estate designers (“Flipping Out”). There were shows targeted specifically at the very practice that brought down real estate (“Flip this House”), and there were a myriad of other shows that made real estate so glorious.
But my favorite shows, like “Open House” used to be, were the ones that focused on getting people into New York City apartments—especially rentals. Because rentals are a funny thing in New York City. While many of my 26-year old compadres back in Texas are at points in there lives when they are buying their dream houses, I can’t even begin to imagine buying a place that I want to spend the next 2 years in, never mind the rest of my life. Thus, like many New Yorkers in their 20’s—I’m doing the rental shuffle: steadily trying to upgrade from move to move without breaking the bank or my dreams of eventually moving into a condominium or townhouse of my own in my 30’s.
But it’s a hard premise. Right from the beginning, the most efficient way of finding an apartment in this city involves paying someone money to find it for you. Unlike just about every other city in the United States, New York City residents have to pay a fee to gain access to the best listings in New York City. The people in the know, including current and former real estate agents, recognize that you can gain access to the same listings as brokerages by calling up the owners themselves. Of course, real estate agencies know this, and thus, they typically don’t list the addresses of their apartments in their listings—a smart move on their part. That still, however, leaves those with friends as real estate agents with some access, but it cuts out the majority of people in the city.
And paying those real estate agent fees is painful. Fees are typically 15% of the annual rent, and you don’t get anything for that. Not a toothbrush, not a month off the rent—nothing! It’s a horrible payment structure too, in that because it’s due up front, many people are forced to save three times as much as they would need to pay for first month’s rent and a deposit.
Of course, you could go at the search alone. This typically leaves out many of the preferred listings and forces New Yorkers to look for real estate on websites that have no broker fee apartments. The king of those websites is Craigslist. People from out of town have no problem using Craigslist, as they typically are too shell-shocked by the prices to pay for a place on their own; thus, they are willing to do the dreaded blind-roomshare, and they certainly aren’t going to pay for a real estate agent. However, those who have lived in the City for a few years know that Craigslist is full of shady offers and can be an extremely troublesome way to find an apartment for yourself and your roommates.
There are better sites out there—some that charge small fees for access (Rent Direct), and those that are completely free (gonofee.com). Still, the best deal you can get on an apartment in New York City involves the same process that gets your kid into the best schools in New York City: a lottery.
Believe it or not, for those of you not making six figures (and even some of you who are), there is a lottery apartment out there for all of you. Now your chances of scoring such an apartment are low, and the best deals are reserved for those people making under $40,000, but there are great apartments to be had for well-below market prices for individuals making as much as $80K or $90K.
I don’t know if some of you comprehend the kind of deals out there for lottery applicants. Let me give you one example. You see the picture at the top of this article? That’s an image of the building: at 440 W. 42nd Street. That building has a luxury interior, complete with a 24-hour attended lobby, on-site resident manager, washer/dryer in every unit, landscaped rooftop, fitness facility, pool, lounges, party rooms, terraces and a garage. Typically, something like this in midtown would og for not much less than $4,000. And a two-bedroom at this building would be around $5,000 and up. And if you don’t believe, those are the prices the company (Related Companies) who built a similar building a few blocks away.
So how much are New York City’s winning lottery applicants paying for these apartments? Well, a studio here can be gotten for anywhere from $503 to $708 maximum. A 1-bedroom here is going for $541 to $838 maximum. And a two bedroom here, for lottery winners of course, is going for $659 to $1,015 maximum. That’s right! The apartment of anyone’s dreams will be had for prices at which most people would be willing to pay double or triple for!
Of course, winning a New York City lottery is not a sure thing, and no one can bet their lease on winning such a property. I do know one or two people who have lucked out and have won multiple lottery offerings, which would suggest that perhaps it’s not as competitive as it should be. Then again, both of those lucky winners got places in Harlem, which isn’t exactly as competitive as Midtown Manhattan.
So when I say finding a great place in New York City at a great price is like finding a needle in a haystack, I don’t know that I’m using a cliché as much as I’m applying a very descriptive metaphor. In the aforementioned lottery building, there were just 163 apartments for what was a reported 50,000+ applicants. So if you wanted in to that building, you really needed to get lucky and find a needle in New York City’s haystack of desperate apartment-seekers. Then again, you’re probably better off spending that time on Rent Direct or GoNoFee.com, where at the very least the needles are out in plain sight, and you don’t need to pay with an “arm and a leg” to pick one up.