We got an email today that appeared to be from someone we know, a business associate. This email came from his Yahoo account

“I’m writing this with tears in my eyes,my family and I came down here to Wales,United Kingdom for a short vacation unfortunately we were mugged at the park of the hotel where we stayed,all cash,credit card and cell were stolen off us but luckily for us we still have our passports with us.

We’ve been to the embassy and the Police here but they’re not helping issues at all and our flight leaves in less than 3hrs from now but we’re having problems settling the hotel bills and the hotel manager won’t let us leave until we settle the bills,I’m freaked out at the moment.”

After asking him to tell us how we met, he ignored the question but sent this UK number +447024015257 for his “hotel manager.” I searched the number and found a thread proving the scam. Beware!

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Jason Turcotte writes Rental Beast “… is giving Craigslist a run for its money.” I have made the article available to you as a PDF, click to download.

Rental Startup Takes Manhattan - Brokers Weekly

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Rental Beast: A Better Way to Search for an Apartment?

Mike Whaling of Multifamily Technology 360˚ interviewed Ishay about the Rental Beast apartment hunting model and how we differ from other large listings sites (and craigslist). Thanks Mike!

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We’re looking for your opinion about apartment hunting and we’d love for you to take a few minutes to answer a few simple questions in our anonymous survey on apartment hunting.

Take our 2010 apartment hunting survey now, and check The Beast blog in the coming weeks for the results.

Thanks,
Ishay Grinberg
Rental Beast

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Scott Kirsner of the Boston Globe wrote a great post this week asking that exact question. The point Scott is making is  “…in a world where Craigslist has made filling or finding a vacant apartment fundamentally free, can Rental Beast build a significant business by trying to streamline the process?”

Well, I think that the whole “free” premise is the biggest misconception in the history of misconceptions.

In reality >95% of renters that use Craigslist end up calling and leasing through a broker or real estate agent and as a result pay a broker fee equal to 1 month’s rent.

For the most part the fee is paid fully by the renter, sometimes the renter pays half and the owner pays the other half and even when the owner pays the full fee it is almost always factored into the monthly rent bill.

What’s so “free” about that?

Remember when you had to pay an arm and a leg to buy some stock through your stock broker?

It’s hard to remember now when anyone could buy and sell stock online for $5-$7 a trade (E*trade, ScottTrade, etc) could this happen with real estate brokers?

In this economy more and more people are asking themselves, “why do I have to pay the broker fee?

Well for those who use Rental Beast the answer is “You don’t!”

Here is a link to the Boston Globe post: Somerville start-up takes fee-based approach to apartment rentals, challenging Craigslist

I’d love to hear about your renting experience.

IG

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I recently started a new group on LinkedIn called “Boston Apartments“, I found that most groups relating to the apartment rental industry had too much irrelevant information.
Given the unique characteristics that the Boston apartment market has I hope this group becomes a good information resource for Landlords, individual property owners, property managers and off course apartment renters.
The group is open to anyone and I would encourage you to participate, share ideas, ask questions and make suggestion that you think would improve the overall experience of having to find an apartment for rent in greater Boston area and also owning or managing a property in MA.

Below is a link to to our new group:

http://www.linkedin.com/groups?gid=2670317&trk=myg_ugrp_ovr

IG

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Rental Beast Offers New Pricing

Finding apartments for rent isn’t always carefree and easy. During this holiday season you deserve to catch a break. At Rental Beast we understand that your apartment search can be frustrating and expensive; but we think we can help! We have slashed our pricing and simplified our money-back guarantee for your convenience. Rental Beast can help you find apartments for rent in Boston.

Pay less than $1 a day
with our new pricing plan:
Sign Up Now

BRONZE MEMBERSHIP

• Now less than $1 a day!
• $29 for 30 Days
• Unlimited access
• Email Notifications

SILVER MEMBERSHIP

• Save 30%
• $59 for 90 Days
• Unlimited access
• Email Notifications

GOLD MEMBERSHIP

• Save over 75%
  compared to a broker fee
• $250 for 6 Months
• VIP guided search assistance from our customer support team
• Unlimited access
• Email Notifications

All packages are backed by our new, easier and faster money-back guarantee:
If you find a place on your own that is not in Rental Beast’s database, we will process your refund in three easy steps:

1. Make a copy of your new lease
2. Send it to us via email, fax or snail mail
3. Get your refund in full in 5-10 business days

No need to scour Craigslist for hours; no need to pay any broker fees. Give Rental Beast a try, you just might like us.

IG

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Even though I have close personal ties to Rental Beast, I want to examine the process of how to find an apartment in Boston. I will be as objective as possible.

What are your choices? Online listings offer a lot of freedom. The first service that always comes to mind is Craigslist. It’s main advantage is that it’s free. Let’s check it out.

Craigslist Boston. What am I looking at!? Craigslist is not for the myopic. I don’t need glasses, but I feel like I do when I get to their landing page. Craigslist presents its content with very little design.

Craigslist Design - Not for the Myopic

The page is hard to read. After a moment of scanning I see what I am looking for: Housing.

Next I am given a choice, do I want to pay a fee or no fee? That’s a no-brainer, no fee. Let’s see the results for apartments by-owner.

The results are, wow, what a list! How am I going to sort through all those apartments? Some of these don’t even look like apartment listings. “$1250 must see” Must see what? That’s all you’re giving me?

Hang on, I want to live in Somerville, these are listings for ALL of Boston. I better do a search to narrow it down to Somerville, $2000 max rent. Results: 240 Listings. That’s a lot. But some of these say they are in Revere and South Shore, what? I guess anyone can post anything on Craigslist, accurate or not. Have you heard about this apartment rental scam on Craigslist?

So I check the box for search for Somerville in titles only. Now I get 26 results. Some in Cambridge, some in Medford. After scanning the whole list I find 20 listings in Somerville. Are any of these direct contact? No. They are all anonymous e-mail. I wonder who I’d be giving my contact to? Who knows….

Maybe I’ll try those no fee brokers. Nah, I know that when an agent says that the apartment is no-fee that what that really means is that the fee gets spread out over my twelve months lease. I mean, no one works for free, right? I know I don’t.

Conclusion. Craigslist. Not so much. Isn’t there a saying “There’s no free lunch?”

Let’s try the same apartment search on Rental Beast. Right off the bat I see that I’ll never pay a broker fee.

Rental Beast Home Page - Somerville Apartment Search

By giving me direct contact to the landlord or management company, I become my own “broker.” Plus, Rental Beast’s listings are verified. No anonymous e-mail.

Alright, back to the search. $2000 a month for rent. I click “Where do you want to live?” and all the cities in MA popped up and when I checked Somerville it opens up to show me all the neighborhoods in Somerville. Neat. But I’m not going to be picky right now and I want to compare to Craigslist so I’ll choose all of Somerville.

Rental Beast - 22 Listed Apartments for Rent

Click “Find Your Apartment” and a list of 22 apartments shows up. I see a “New Listing” with today’s date. Let’s see the details on that one.

Rental Beast asks me to register to view the details for free. I’m okay with that, most sites asks me for my contact info if I want to access quality information.

After I register, I see the details of the Somerville, Sullivan Square apartment. Wow, look at ALL that info! Date available, financial requirements, building type, floor number, parking, pets, nearest subway. That’s a lot more quantifiable information than Craigslist.

Somerville - Sullivan Square Apartment for Rent details.

What does Rental Beast want me to pay instead of a broker fee? Starting at only $89, really!? Now that’s a no-brainer.

Why would I waste my time on Craigslist, just to find apartments in the wrong town, brokers or owners who build the fee into my lease and while my best bet is sending an e-mail to an anonymous address. No thanks. I choose Rental Beast. They’ll even give me my money back if I find an apartment on my own.

Next time you need to find apartments in Boston try: http://www.rentalbeast.com

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A recent vlog entry by Mark Juleen of JC Hart Communities lays out his frustration with the Rent.com model. And he thinks he’s not the only one. (See comments by Bell Partners and others). The entry created quite the firestorm in the industry and I think that Mark is on to something.

The more comments you read, the more it becomes clear, at least to me, that no one is out there to help the renter. So while I agree with Mark that the Rent.com model is flawed, I would add that the flaw goes far beyond their billing method.

Let’s examine: What is the purpose of an ILS (Internet Listing Service)? Who is their end user?

The purpose of the ILS is to advertise a property so that the property can fill its vacancies. But advertising is slick: For example, in 2 out of 10 times I drink Martini’s would I get the response George Clooney gets in the following ad. The goal of their Martini ad is not to be super-informative and accurate but to get me to think I can be George Clooney just by drinking Martini’s.

The same is true for the advertised properties on the ILS. Let’s not forget the end user, the renter, remember him? Here is a what the renter’s experience is like on almost any ILS:
Limited Selection – mostly large apartment buildings and communities. Private owners and small property managers missing (50% market share)
Apartment Listings are more like ads on the ILS. They are meant to generate traffic. Actual availability? Actual rent cost? Fuggedaboudit!
What you do get is a rent “range,” a general description of the property’s amenties, some model pictures and an 1-800 gateway (ad tracker) that re-routes you to the listing manager.

As a result, renters are forced to painfuly spend hours going through several different websites, carefully navigating their way and scouring through misleading and inaccurate ads. In addition, in some markets, like in Massachusetts, the renter is  likely to get “rewarded” with a broker who charges one month’s rent for pointing out the bathroom, awesome! For renters, the process of looking for an apartments is one notch higher than water-boarding (too extreme? you get my point) on the “Things I Wish I Could Put Off Forever” list. I think the entire process of looking for an apartment is broken. Both the renter and the lessor are unhappy.

How do we fix it?
Imagine a world where you have one comprehensive rental database (similar to MLS for sales), where the renter can get a clear, verified and real-time view of almost all the available rentals in their respective market, call the owner or the property manager directly and never pay a broker fee. A database where all property owners and managers list for free. Let’s imagine that this database is called RentalBeast.com (Shameless self promotion, I know. I couldn’t help it.)

IG

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I felt it was important to explain the broker fee system in Boston to all the new renters out there; especially the “No Fee Brokers”.

If any of you ever wondered what makes this group of extremely wonderful and generous people donate their time and expertise for free then here is your answer.

A broker or real estate agent gets paid the equivalent of 1 month’s rent in virtually every transaction in which an apartment is rented.

There are 3 ways that they get paid:

1. You, the renter, pay them a full month’s rent fee.
2. You split the month’s rent fee with the landlord so each party pays a half-month’s rent.
3. The landlord pays the full month’s rent fee.

Scenario 3 is better known as the “No Broker Fee” apartment.

From my experience, if the landlord is willing to pay such a high incentive, the fee ends up being passed down to you anyway in the form of higher monthly rent. For example, a $1200 a month apartment with a one month’s fee would end up being $1300 a month ($1200/12=$100 extra dollars per month) so the landlord recovers his expense. Your rent is higher than it could have been if you rented the unit directly through the owner/property manager.

Also another point worth driving home – no matter who pays the broker fee, the more rent you pay, the more fee they get. That relationship usually leads to you seeing apartments that are at the top if not slightly over your price range.

Bottom line is this: if you want to avoid paying a broker fee you should not go around with brokers. It doesn’t matter whether they classify them self as Fee or No Fee; there is no free lunch.

IG

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