Landlords are offering more sub-six-month leases in response to economic uncertainty.
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As uncertainty rules in real estate, one segment that has been seeing growth is the market for short-term rentals.
Landlords in New York City and across the country are offering more flexible rental options in response to demand from renters facing unclear economic futures.
The number of listings for short-term or month-to-month leases jumped 70% and the share of furnished rentals rose by more than 40% over last year, according to data from New York City listing site StreetEasy.
Nationally, StreetEasy’s parent company, Zillow Z , saw an unprecedented surge in rentals for six months or less starting around the week of March 10. Between that day and the end of April, there was a 33% increase in short-term rentals.
“As a landlord, you’d like guaranteed income,” says Joshua Clark, Zillow’s in-house economist. “If people aren’t willing to make that 12-month decision, they’re going to have to be willing to be flexible.”
The seasonally adjusted share of listings with leases of six months or less.
Zillow
Teresa Chavin, the leasing manager at 525 West 52nd Street, a luxury building in Manhattan’s Hell’s Kitchen neighborhood, says that management has been considering termination riders — a rider to the lease which contains terms for ending the lease, something usually not included in a typical lease — for residents who are uneasy with the current employment and economic trends.
“This helps residents feel more comfortable to move to or remain in a building when our management firm is listening to their concerns,” Chavin says.
Seth Coston, director of residential asset management and operations at Time Equities says they are working with tenants who want to switch roommates during the lease term because one roommate has decided to leave New York City.
Andrew Barrocas, chief executive officer of New York City brokerage firm MNS Real Estate, says that while legal issues prevent rent stabilized tenants from entering into month-to-month leases, the team there is working to prepare one-year leases with special clauses that will allow renters to easily leave when they’re ready.
“The goal is to assure residents they’ll have a place to stay and minimize the need to go outside to search for apartments,” Barrocas said.
Jared Antin, director of sales at New York City brokerage Elegran, says he’s seen some landlords offer tenants to renew leases for three to six months and in, some cases, allow tenants to go month to month.
“Landlords would rather have a paying tenant in place than risk units being vacant and having to find another paying tenant,” Antin says. “One landlord we represent is open to shorter-term leases when the existing tenant requests it.”