Net vs. gross rent confusion spurs StreetEasy to change how listings present concessions
The gross rent will now be featured on top of the listing.
In a recent StreetEasy survey, 40 percent of renters say they’re confused by net effective rents.
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.)
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.