Further up this thread, I mentioned that I worked for RDNY.com. RDNY has true no fee apartment. There is no broker fee baked into a slightly higher rent. But that model only works if renters are willing to pay a small fee to get genuine listings.

It's sort of like the paywall for a newspaper like the NY Times. It cost money to run a business and someone has to pay.

Over the past 21 years, I've seen numerous startups come into the business hoping to have no fee listings supported by ads. But the reality is a horse before the cart problem. Few landlords spend money on advertising. Those that do, only spend money if there is traffic to their buildings and clicks on their ads. A startup rarely has sufficient renter traffic to make advertising a viable model to cover the costs.

The poster above said that companies that come into the business see how much money brokers are making, and so they adopt that model of traditional brokerage.

Actually, they change to that model out of survival. Like I said, advertising won’t necessarily pay the way.

RDNY.com has a subscription model where users pay $49 to access all listings (tailored to a particular search profile). It's the model used by NPR and Public Radio. RDNY's loyalty is to the renters, not the landlords, as they are getting zero money from landlords.

But it's tough convincing renters to pay a little up-front, without any guarantee that they will find the right apartment or qualify to rent. Yet the rewards for those that do subscribe are great. Saving almost two month's of rent in NYC is a LOT of money.

I can tell you that using technology (other than the web and back end databases) is VERY difficult in NYC rentals. That’s because the big problem isn’t the user interface or having an attractive and intuitive app.

The big problem is getting the information from landlords. The vast number of landlords in NYC are small landlords who are usually tech-phobic. There are many landlords who do not even have email!! Tons of landlords don’t have a website. Many of those that have websites don’t display their listings. And many landlords who have websites with listings posted don’t keep them up to date. So there are only so many landlords that can be updated by scraping their websites.

Most landlords update us by email or pdfs, but every landlord has a different format. Some have complete information about each apartment, but most don’t. Most simply give us the address, size, price and that’s it. No pictures, no description, nothing. Some don’t even give us the information on how to see the apartment.

And then there is the problem of trying to keep the access to apartment information up to date and accurate. Supers come and go. Building staffs change. But most landlords don’t bother keeping us updated on their staffing issues.

The bottom line is that updating listings and finding new listings is VERY LABOR INTENSIVE. It takes a staff of people who want to be paid. It is frustratingly slow. Often, you have to chase landlords who gave you a listing but haven’t updated you to let you know whether the listing is still available or not. Or if there has been a price change.

The bottom line is that if you are strictly a tech person, don’t try to automate the business of apartment rentals. You will most likely fail after you’ve put your blood, sweat and tears into it. If you’re mainly a real estate person and you know the business and the players, you’ll probably realize that trying to change the way apartments are rented in New York is a herculean job. Landlords will not change the way they’ve been doing business for 50 years because you think you have a better way of doing it.

But I know some of you will try anyhow.