Real estate woes are all too common, especially in sought-after cities like New York.
Enter TripleMint, a real estate startup hoping to ease the pain of renting and buying in New York City. TripleMint brings the power of 21st-century search and a customer experience focus to the convoluted universe of old-school agencies, listings, and fees.
It’s a sleek end-to-end property solution, drawing in (and predicting) the full database of available properties. TripleMint then connects potential clients with one of their 30 agents, who are incentivized not by sales – which is the traditional agency approach – but instead by customer experience and satisfaction feedback. The startup will even help out with moving deals.
“TripleMint’s platform really powers the whole transaction for buyer, seller, and renter by offering value directly to the consumer,” CEO and co-founder David Walker told Business Insider.
We recently sat down with Walker and TripleMint’s head of sales, Tyler Whitman, to get the inside scoop on how to make the right choices around buying and renting in this competitive market.
1. Where do I start?
The first step is to know what you’re looking for: are you a buyer or a renter? If you’re new to a city, not sure how long you’ll be there, or wondering what you really want out of your living space, renting is a great starting point, Whitman said.
“Renting gives you the opportunity to test spaces out,” Whitman said. Determine your must-haves, whether that’s a safe neighborhood, upscale amenities, or low living expenses. If you’re renting, you also won’t have to worry about maintenance or other more serious, unexpected expenditures.
Buying, on the other hand, has two major perks: first, the potential upside on investment in a hot market is huge.
“If you timed your property right and made the right investments, it can be like the city paid you to live here, instead of vice versa,” Whitman said.
For buyers, also determine if this is a primary residence, or if you intend to use it as a source of income. If you’re looking to rent it out, that will narrow your search further, as many buildings – like co-ops – won’t allow for that setup.
2. When should I start looking?
For rentals, most properties start cropping up about 30 days before move-in, and they move very, very fast. In Manhattan, inventory is limited and competition is fierce. Vacancy rates can be as low as 1%, Walker said. In fact, it’s not even worth it to start looking too far in advance.
“The average shelf life – especially in the summer market – can be less than 24 hours, easily,” Whitman said. “Sometimes apartments are listed that morning and rented by lunch.”
If you’re ready to buy, you’ll have a bit more breathing room. Whitman said you want to sit down with an agent about 6 months before your lease ends or you’re going to be ready to move in. It takes about 90 days between the time you go into contract and the time you close, and the search itself can go on anywhere from 30 to 60 days.
3. How do I start looking for available properties?
You could go to listing sites: Zillow, Trulia, or even good old Craigslist. You could connect with a particular agent right from the start, who will come up with suggestions for you based on the criteria you present.
Or, said Walker, you could consider starting on a platform like TripleMint.
“There’s a huge issue in real estate that consumers don’t even know exists, and that’s that most property search sites are actually advertising sites for real estate agencies,” he said. TripleMint, by contrast, is a direct feed of the internal broker database, drawing in all available properties and using predictive algorithms to also present properties that are coming to market in the near future. That search through the database is completely free.
TripleMint then connects you with one of their agents, who uses the tracking data from your site searches to get you straight to the properties you like, without having to start again from scratch.
4. Do I really need an agent?
Often, homeseekers are hesitant to start with an agent, as many see it as an additional, unnecessary cost. But Walker and Whitman agreed that a good agent can be worth his or her weight in gold.
“Using a real estate agent is free for a buyer,” Walker said. “Every buyer should, first and foremost, start with finding a great real estate agent, because if you’re going to use one eventually – which 90% of buyers do – you may as well start forming that partnership right off the bat.”
Given the lack of regulation on online property listings, and the many pieces of the buying process that an agent will be able to help you navigate, it can be a time-saving choice.
5. How do I find the right agent?
One of the biggest mistakes that buyers make, though, is falling into working with an agent without properly vetting him or her in advance.
“Can you imagine picking your financial advisor because they’re a friend, and not doing any due diligence to understand what returns they’re getting for their clients?” Walker asked. Make sure you’re on the same page with your agent. Ask how they define value, and see if you can speak to former customers. Have them walk you through the process, so you see how they’re going to be an asset at each step of the way – and to confirm that they know the ropes.
Request a mortgage broker referral, if that’s going to be something you’ll need. Agents have a very high turnover rate – as much as 80%, Walker said – and are often not fully prepared for the job. Make sure you choose one who is.
6. What are some hidden costs I should watch out for when searching?
When it comes to renting, listing photos can sometimes be misleading or just plain inaccurate. But usually, what you see when you visit the building is what you get. Be sure to pay attention to the upkeep of hallways and common areas as an indicator of the landlord’s attentiveness. But, Whitman warned, renters often get caught up in the details or scared away by negative online reviews, when it’s really not that big of a deal.
“People only go online to complain; Googling the building isn’t really going to serve you,” he said.
Buying, on the other hand, has a whole list of potential hidden costs to prepare for. You need to consider both the purchase price and the monthly cost, which can include unexpected maintenance fees, depending on the status of the building.
“Whenever you’re looking at something that seems like it’s just too good to be true, it almost always is,” Whitman said. “A lot of times there’s a third component to buying in the city, and that’s the health of the building … and you just can’t see that on the surface.”
In one example, a couple found a perfect spot in Chelsea for their budget and needs. But it was above a weightlifting gym, and the repeated impact of weights hitting the floor had cracked the facade of the whole building. The result? A monthly cost of $4,000 that each apartment had to pay beyond the purchase price – taking the property way out of budget.
“Somebody who’s not using a broker… they flock to these apartments thinking they’re amazing deals. But everything that’s a deal has a hiccup,” Whitman said. “The only other option is patience.”
7. How should I prepare my finances?
Renters are often expected to show proof of good credit, employment, and an account that holds 40 times the monthly rent – or be backed by a guarantor. You’ll also want to set aside a security deposit, and a certain number of first months’ rent. But there are often “solutions” to these requirements on the rental side, Whitman said.
Buying is a bit more involved.
First, you should meet with a recommended mortgage broker about 6 months before your expected move-in to get your finances in order and understand your mortgage options.
Second, you should organize your down payment, which is usually 20% of the purchase price. It’s the hardest part of buying your own home, and the biggest barrier for first-time buyers. Walker and Whitman said that many buyers receive “gifts” to use as down payments. Buildings don’t like to see new buyers borrowing money, because it means you have to ultimately pay it back.
Third, know your monthly cost: the maintenance, mortgage, and interest fees that will be part of your line-item real estate budget. Make sure you can manage it fully. In some cases, when you take into account tax deductions, the monthly cost on a house you own could actually work out to less than monthly rent.
Finally, some buildings will want to see proof that you can pay for the mortgage and maintenance for two years post-closing. But there are workarounds: you can pay extra security, Whitman said, or place six months of maintenance fees in an escrow account.
“A good broker is going to have good solutions,” he noted.