no-fee apartment rental websites<\/a> such as ours become incredibly popular.\u00a0 In fact, the sites are so popular that every broker today who makes any commissions related to apartment renting instantly sees his or her income drop to $0.\u00a0 How much total commission would be lost per year?<\/p>\nMethod 1:\u00a0 Licensed Rental Agents * Average Annual Income<\/h2>\n The first attempt at estimating the size of the New York apartment broker industry is to figure out the total number of agents who make a living helping tenants find apartments.\u00a0 The advantages here are that we can cleanly capture the data by obtaining the number of licensed real estate salesperson and associate brokers from the New York Department of State.\u00a0 Then with a modest sample size, we can find out what percentage of real estate agents work in rentals, and then determine the mean income each rental agent earns per year.<\/p>\n
How many agents work each year in a full-time capacity, handling apartment rentals in Manhattan?\u00a0 Using our trusty eAccessNY tool for looking up licensed agents, plus some clever agent listings from key rental players, we conclude there are at least 3,000 rental agents working in Manhattan for a living (as in real analysis, we choose to lower-bound the estimate and show that the number fulfills our needs, rather than worry about careful estimation).<\/p>\n
Now the more interesting number, what is the average rental agent income?\u00a0 I got some information after talking to broker who’s data I trust a lot (he runs a well-respected brokerage and personally trained over 100 agents).\u00a0 A good rental agent earns between $50,000 to $60,000 a year.\u00a0 While I didn’t ask for statistical details on the “good” descriptor, we’ll assume $60,000 is a one-sigma positive agent.\u00a0 He also said an “exceptional” agent makes $100,000, which I’ll peg as a two-sigma agent.\u00a0 As we know, this is hardly a normal curve, as the big skews are on the positive side, so told, I’ll estimate the mean at $45,000 annual income for a rental agent.<\/p>\n
Real Estate Agent Commission<\/h3>\n But when a rental agent earns $45,000 a year, that means he or she really collected at least $90,000 a year in commission, under the standard 50\/50 commission split.\u00a0\u00a0 Sadly, there is even more.\u00a0 An in-house listing team can usually count on earning 5% per listing, meaning the actual annual commission collected per agent per year is closer to $90,000 \/ (.95) = $94,737, which we’ll round to $95K. The broker also told me that while some agents have successfully worked as hybrid rentals and sales, the vast majority stick with one or the other (sales being higher on the totem pole, but requires more relationship management and reputation establishment).<\/p>\n
Size of the New York Apartment Broker Industry<\/h3>\n If our calculations are close to correct, we are concluding that the New York Apartment Broker Industry grosses at least 3,000 * 95,000 per year! Manhattan rental brokering has consistently been a $285 MILLION dollar industry! That lower bound excludes all the web designers, lawyers, database admins, property managers, accountants, and others, but the typically 50\/50 broker cut can account for a lot of the overhead payments.<\/p>\n
Can we really save New Yorkers $285,000,000 a year?\u00a0 That certainly is one of our goals, but first we’d like to suggest other methods that could approximate the same number, to be explored in the future…<\/p>\n
Method 2:\u00a0 Apartments in Manhattan * Annual Turnover * Broker Utilization Factor<\/strong><\/p>\nMethod 3:\u00a0 Back It Out from the New York City Budget \/ Tax Factor<\/strong><\/p>\nEditor’s Note: We’ve updated this article to enhance readability.\u00a0<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"How large is the New York apartment broker industry?\u00a0 We always hear that the non-agency mortgage-backed securities market is a\u00a0 $800 billion dollar market, based on notional value (that includes CMBS, for the purists).\u00a0 The whole loans market for outstanding residential mortgages exceeds $4 trillion in par-valued principal.\u00a0 The hedge fund industry once topped $2.6 […]<\/p>\n","protected":false},"author":4,"featured_media":19263,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"yes","_lmt_disable":"no","footnotes":""},"categories":[269],"tags":[72],"class_list":{"0":"post-3884","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-brokers-and-landlords","8":"tag-broker-fees"},"yoast_head":"\n
How Large is the New York Apartment Broker Industry? - Real Estate Topics, Tips, and Guides<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n \n \n \n \n \n\t \n\t \n\t \n