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Many New Yorkers have the experience of finding an apartment online and scrolling to the end of the listing information, only to learn the rent they would actually have to pay is actually significantly higher than what they were seeking.
That’s because when landlords offer a free month or more of rent, they often list the apartment at the net rent, which reflects the discount as if it was subtracted from each month. But that’s not how it usually works. Agents tell Brick Underground that every landlord is different, but usually either the second or last month is free. The rest of the time you pay the higher amount, called the gross rent.
It's not a scam to present listings this way, but it's not exactly straightforward, either.
(Want to know how to calculate the gross rent yourself? You take the total amount of concession and divide it by the term of the lease, then deduct that amount from the monthly asking rent. Or you could use Brick Underground's calculator.)
Gross Rent Calculator
Some New York City landlords offer a free month (or more) at the beginning or end of a lease. The advertised rent is the net effective rent. The net effective rent is less than the amount you will actually have to pay --- known as your gross rent --- during your non-free months.
Brick Underground's Gross Rent Calculator enables you to easily calculate your gross rent, make quick apples-to-apples comparisons between apartments and avoid expensive surprises. All you'll need to figure out your gross rent is 1) the net effective rent, 2) the length of your lease, and 3) how many free months your landlord is offering. [Hint: Bookmark this page for easy reference!]
To learn more about net effective versus gross rents, read What does 'net effective rent' mean?.
If the landlord is offering partial months free, enter it with a decimal point. For example, 6 weeks free rent should be entered as 1.5 months.
Misunderstanding gross rent vs. net effective rent is an issue for many renters—in a recent StreetEasy survey, 40 percent of renters say they’re confused by net effective rents—and that confusion has prompted StreetEasy to change the way it presents rents in listings.
Now, all new StreetEasy listings will clearly state any concessions related to net effective rent and any lease modifications, such as a 13-month lease vs. a 12-month lease, for example. The gross rent will be displayed clearly at the top of the listing, as in the listing example above, so you will know how much you are paying each month. In the past, the net rent could appear at the top of the listing—and spark confusion, or disappointment.
“By clarifying net effective rent more prominently on StreetEasy listings, renters will have a better understanding of costs and clear path to finding a home that fits their budget,” says StreetEasy spokesperson Lauren Riefflin.
Keep in mind when you're searching on StreetEasy—and other sites for that matter—your results will pull in listings when either price fits that criteria, so be sure to pay attention to whether the gross rent matches your budget.
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