RentHop fingers 'convenience premium' on NYC rentals

Inman News

Rental listing service RentHop has released a report that attempts to gauge the premiums renters in Manhattan pay for certain conveniences.

One of the main findings of the analysis is that renters tend to pay higher "convenience premiums" for two-bedroom apartments than for single-bedroom or studio apartments, suggesting that two-bedroom renters who forgo certain conveniences may enjoy substantial savings.

RentHop said the steep discount is a result of the challenge of assembling a group of roommates who are all willing to deprive themselves of conveniences.

"It turns out that satisfying a group of three or four people is significantly harder than compromising with a single room mate," the report said. "Some people might absolutely need laundry in the building. Other people could care less. Because of these disagreements, many of the more 'inconvenient' apartments don't receive as much exposure or demand."

The study calculated premiums of three apartment-building characteristics: the number of flights in a building, the presence of laundry units and distance to commercial areas.

According to the report, renters of two-bedroom apartments located on the fourth floor of walk-up apartments in Manhattan pay an average of 12 percent less than their neighbors who live in two-bedroom apartments on the first floor. But for renters of one-bedroom fourth-floor apartments, that discount is only 4 percent, the report found. 

Renters also may enjoy substantial savings by choosing buildings without laundry units, according to the study. The report said that renters can save $300 to $600 by foregoing this convenience.

The analysis also looked at how prices change at a block level based on their proximity to commercial areas. In the case of proximity to Lexington Avenue on the Upper East Side, location-based premiums were especially striking, according to the study. 

For two-bedroom walk-ups, rent drops an average of about 9 percent per avenue block moving east of Lexington Ave., the study found. For fourth-floor walk-ups in that neighborhood, that translates into up to a $400 discount per avenue block, RentHop said. The block-by-block discount for one-bedroom walk-up apartments east of Lexington Ave. in the Upper East Side was only about only half the discount of two-bedroom walk-up apartments.  

RentHop said it used three-years' worth of data -- about 60,000 data points -- to generate its findings. 

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