DNAinfo.com | May 10, 2016
BROOKLYN — Paying a year’s worth of rent upfront was once the domain of those with poor credit or foreigners without documented credit history.
But increasingly, renters with cash on hand are hoping that advance payment will make them more attractive applicants — and potentially get them a discount off the listed price, brokers say.
It can be an appealing proposition to owners of small buildings or condos renting out their units. Landlords of large buildings, however, aren’t likely to consider it, real estate experts noted.
When does it make sense for renters to pay upfront?
Last month, an actor named Meng — who asked that his last name be withheld — had a bit of nest egg saved up and decided it was worth dipping into his savings to secure a light-filled two-bedroom in a three-unit building with a 1,000-square-foot shared garden.
The unit originally asked $3,400 a month and then was about to be dropped to $3,200 a month.
After offering the whole year’s rent, Meng got the unit, which he is sharing with his boyfriend Andrew, for $3,040 a month.
“To me, it’s like investing, not losing money, since we’re saving 5 percent,” said Meng, 32, noting that Andrew will be making monthly payments to him.
Even though Meng and Andrew would have qualified on paper for the apartment —most landlords require tenants earn 40 times the monthly rent — they felt the apartment’s listed price was still out of their comfort zone.
Still, they didn’t want to walk away from an apartment they loved.
“I was saving the money to save it. I don’t have a 401k or retirement, so I have save the money for myself,” said Meng, adding, “It proves that even though rents are high there is room to negotiate.”
Andrew had actually paid a year upfront previously when he had just started a small creative agency and had no income to speak of but had cash on hand.
He was living in Crown Heights at the time and taking over the lease from a roommate — and he didn’t want to see his rent raised as it would be for a new lease.
“They said ‘the only way we’d go for that was to pay more upfront,’” Andrew, 33, said. “Then I didn’t have to pay an increase.”
Mary Lou Currier, of Bond New York was working with a couple a few years ago who wanted to rent a $7,250 a month two-bedroom unit from a condo owner in a building on Third Avenue in Gramercy but were getting stonewalled because the owner didn’t want to allow their small dog in the space.
“It was a little cockapoo and [the couple] made the mistake of saying she’s a puppy at the open house,” Currier recounted. Because of the dog, there were extra fees of about $14,000.
The couple offered to allay any concerns by paying everything upfront and got the apartment.
In the past few months, several potential renters — all retirees from the suburbs or West Palm Beach looking for pied-a-terres at a high-end rental on Central Park South — wanted to pay upfront for a discount, according to Lindsay Wirt, of FirstService Realty NYC.
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