your new digs. your new hood.

If one moves about the five boroughs with any degree of regularity, he or she will certainly have come across advertisements proffering the proverbial free month of rent.  Many have and continue to buy into these deals, so enticing on the surface, though more careful individuals see such offers for what they are – deceitful gambits designed expressly in the interests of hiking up the duped tenant’s rent by a significant percentage, if he or she decides to remain for a second year.  This is how the ruse works.  Developers of new rental buildings parcel out No-Fee “bargains” in order to fill up vacant spaces as quickly as possible.  These propositions have the dressing of fair deals in that no one wants to pay a broker’s fee, a fact which the developers recognize and milk from unsuspecting customers interested in saving a buck.    Many of these same developers will also offer the aforementioned 1 Free Month of Rent.  While the ‘Free Month’ implies savings, it actually depreciates the higher rental price down to market value, or very slightly below.  The ‘Free Month’ ploy misleads many, as prospective renters have themselves convinced that the free month is given in addition to the advertised monthly rental amount.  In reality, the amount has already been factored into the list price.  In other words, not only will a potential renter pay a monthly amount inflated  considerably beyond the listed price, he or she will be stuck between a rock and rising costs if, wishing to remain in the unit for a second year, the situation takes the inevitable turn the No-Fee “bargain” conveniently elected to elide.  To reiterate and calculate: for a $3,877 2-bedroom rental, the real-dollars cost for a 13-month lease would be $4,200.  There’s a vast $333 gulf, then, between what you’d end up paying and the listed dollar amount.  One could plausibly argue that the “value” is the equivalent of a $3,877 rental, an assertion not entirely inaccurate – as long as the scope of conversation is limited to the first year of tenancy.  However, once that second year rolls around, not only will the rent be raised, but the onetime free month deal will have been a thing of the distant past.  The worst and most discouraging aspect of these unfortunate scenarios is that schemes like these do not adversely affect the hoodwinked tenet alone.  In fact, these real-estate canards are beneficial for next to no one (money-grubbing developers aside), since the buildings and their incipient exorbitances of cost push rental prices up in surrounding properties within a specific neighborhood.  In Williamsburg, for example, as recently as a year ago, a good-sized 2-bedroom condo rental could be secured for the reasonable price of $3,500.  Nowadays, though, prices have skyrocketed some $200-$300 for the same exact rental spaces, many of which are rented with 1 Free Month and No Fee inducements attached.  At the current rate, a 2-bedroom condo rental will average approximately $4,000 in 2012, a whopping 14% increase from the 2010 estimate.  But it’s not all doom and gloom:  I know a way around schemes such as these.   If you’re interested in saving yourself some money and headaches, inquire through the blog to learn of a simple way to prevent the major price hikes.