What's the deal with "No Fee" apartments in New York?

When searching for an apartment in New York City, many renters come across listings advertised as "no fee" rentals. These rentals do not require the tenant to pay a broker's fee, which can appear to be a significant cost savings. However, it's important to understand that just because an apartment is advertised as "no fee," it doesn't necessarily mean it's the best deal or cheaper than other rentals. In some cases, no fee apartments may actually be more expensive than other rentals.   The secret on getting a good deal then, is to know the math(!)

Net Effective Rent
One tactic that landlords and property management companies may use to make the rental price appear lower than it actually is, is the use of "net effective rent." Net effective rent is a marketing technique used to advertise lower rental prices, but it can be misleading and confusing for renters. Net effective rent is calculated by taking the actual rent, and then subtracting any incentives or concessions that the landlord or management company is offering, such as a free month of rent.

For example, if an apartment has a rent of $3000 per month and the landlord is offering a free month of rent, the net effective rent would be advertised as $2750 ($3000 - $250). This can be misleading as renters may not understand that the $2750 is not the actual rent, and that the rent will go up after the free month, then any rent increasing in the second year will likely be added on top of the actual gross rent. 

Another point to consider is confusion from the term "no broker's fee" itself.  Of course the building is not going to charge the tenant a broker's fee... they're the landlord.  Brokers charge broker's fees, but what the landlords may do is pay the broker a "concession" then roll it into the overall price of the rent, meaning the fee or concession, rather than being charged upfront is simply hidden in the actual cost of the rent.
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In the end, "no fee" apartments can sometimes wind up costing more than apartments with a broker's fee, but that doesn't mean that "no fee" fee buildings aren't worth looking at.   It simply means that the consumer needs to do the math, or have someone advising them where to find the best deals.