When you are on the hunt for an apartment, you will inevitably come across all types of offers that are meant to entice you into going for a given apartment. From not having to pay rent for a whole month to gift cards, there are all sorts of deals that landlords offer, but they almost always come with a hidden price. Here is what you need to know about 1 month op, which is one of the offers that you may come across in rental listings.
What does 1 month op mean? A one month op, or “owner pays” is a term that is commonly used in the rental market which means that the landlord/property manager will take care of the brokerage fee, which is usually the same amount as one month’s rent. This may mean that the apartment listing will be advertised as having no fee since the landlord will be covering it on behalf of a prospective renter.
This can also mean that a listing which is posted directly by the landlord will generally not have a fee, but only if you find the apartment and reach out to the landlord without the help of a licensed real estate agent. While not having to pay the broker’s fee is definitely a perk, some landlords only offer it as an incentive so as to obtain higher pricing on the apartment.
The term “one month op” is a real estate lingo term that you will likely come across as a renter in New York City. It simply refers to the fee that the broker collects for helping you to find an apartment. In most cities in the USA, it is not uncommon to find the landlord paying the broker’s fee. However, when it comes to New York City, renters often have to bear with the responsibility of paying the broker’s fee, which makes the one month op all the more enticing.
Understanding how a one month op apartment can be advertised
Depending on who is showing you the apartment, it is actually possible for the same apartment to be categorized as “no fee’ or “fee” within the same day. If you are somehow able to find the apartment on your own and see it directly from the property manager, usually via the leasing office, you may not have to pay any broker fee. However, if you hire a licensed real estate agent/broker to help you with your search, chances are you will have to pay them a fee. There are usually documents that you are required to sign to show that you agree to pay a fee if you decide to go for an apartment that the agent showed you.
For a one month OP, an agent will show you an apartment. Once the submission of an application to rent and lease signing is confirmed, the agent will then send their charge to the property management company detailing the deal and asking for payment for their services. Many landlords typically remit the payment to the brokerage firm within 30-60 days. The firm will then pay the agreed-upon commission to the agent.
Why you may have to pay the broker’s fee as a renter in NYC
In New York City, there are not too many apartments available for rent, hence the supply is lower than the demand, especially for desirable rental units. As a result, landlords often require the tenant to pay the broker’s fee instead of taking care of it themselves. Many renters are usually willing to pay for this expense since there are limited options.
When the landlord is ready to pay the fee
If the landlord intends to pay the broker’s fees, then the apartment is usually listed as a one month OP rental. This may sound like you are getting a good deal especially since you won’t have to pay for this extra expense, but this may not be the case for a variety of reasons:
- The apartment may be in a high-rise apartment building with a lot of state-of-the-art amenities such as a pool, gym, doorman, etc. This usually means that the monthly rent will be higher, so to keep prospective tenants interested, the landlord may offer to pay the broker’s fee.
- Many landlords opt to include the broker’s fee in your monthly rent, allowing them to get their money back over a period of time.
Should you forgo brokers in the first place?
When the landlord is willing to take care of the broker fee, you may want to completely forgo the assistance of a broker and try to negotiate the apartment rent on your own. You may reason that by directly dealing with the landlord, he/she won’t have to pay the broker’s fee, which will mean that the landlord will not include the cost in your monthly rent. However, brokers usually bring landlords new clients on a regular basis, so most landlords are not willing to compromise this relationship. Furthermore, finding a rental unit on your own may prove to be harder than you think for the following reasons:
- Agents generally have a better understanding of the local rental market and are familiar with long-term trends.
- Brokers can arrange appointments so that you don’t have to go through the trouble of dealing with the landlord when you don’t have time.
- They can tag along when you look at apartments in order to have a better idea of what you want and don’t want so as to tailor your search.
- They usually have access to rental units which you may not be able to find on your own.
- They can alert you on the financial information you will need to rent the apartment to help you prepare and also guide you through the process of applying for a rental unit.
- Agents can help you negotiate a lower monthly rent.
Going for an apartment that is listed as a one month op is a great option if you are on a tight budget since a broker’s fee can cost you thousands of dollars upfront. As much as this will help you to alleviate the heavy financial burden at the beginning of your tenancy, this cost is usually included in your monthly rental payments by your landlord, essentially stretching it out. In the end, it is beneficial to your landlord as well.