It’s no secret that New York City is an outrageously expensive place to live. A studio apartment tends to average out at about $1,163 per month, which is just one piece of the costly puzzle to making it in New York.
While the densely populated city’s large demand for apartments keeps rents so high, it also makes finding an apartment nightmarish. Apartments in New York are scooped off the market the same day they go on it, and prospective tenants must be prepared to pay a large sum upfront for their tiny fraction of the city. Among the most burdensome of the many costs that come with renting a New York apartment is the broker fee—which amounts to 15 percent of your annual rent (or about two months’ rent).
, the Brooklyn-based startup that eliminates broker fees in the New York apartment hunt, wants to shake up this arduous convention.
Nestie launched in June with an online platform that connects prospective tenants with departing tenants instead of a broker. This method circumvents a broker altogether, thereby eliminating a steep broker fee to make moving more affordable for incoming city dwellers.
Using Nestie’s platform, the incoming tenant pays the departing tenant a fee that is capped at five percent of the annual rent, which is paid in order to compensate people for their time. For prospective tenants, this fee is three times cheaper than a standard broker fee.
“Today, most people can search for the apartment parameters they want so it seemed outdated that we were still paying brokers two months rent to essentially do a search for us—that’s the problem we’re trying to solve,” said Julia Ramsey, cofounder and CEO of Nestie.
Nestie requires that departing renters get their landlord’s approval to use this platform upfront, and so far, most landlords have responded positively to the company’s setup. Because essentially, Nestie’s service allows departing tenants to act as brokers, helping them to make a profit off of finding their landlord a new tenant.
“When you remove the additional tax of a broker fee from the ecosystem, you can redistribute that money a bit among the departing tenant, the incoming tenant and the landlord,” said Ramsey. “Now, everyone saves money or makes a little bit of money.”
Traditionally, a broker acts as a middleman between landlords and incoming renters, and are paid by either party with the 15 percent of the annual rent fee. Nestie’s platform alters this system, making the departing renter the new middleman in a more DIY approach to apartment hunting.
Nestie is the latest entrant in an economy full of micro-entrepreneurship, where companies such as Uber and Airbnb have shown immense success in disrupting traditional services. Similarly, Nestie’s easy-to-use online platform is utilizing technology to challenge a status quo, and may just shake up New York's hard-to-crack real estate market in the process.
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