I recently interviewed Joseph Kazickas
, Managing Broker and Founder of Rosehip Partners
at his office in East Hampton and Managing Partner of Hamptons.com.
JV: Tell us a little about your background in real estate.
I was one of three owners of Dunemere Associates which has since been acquired by Brown Harris Stevens
. The transition from Dunemere to BHS started in 2004 and was finalized in 2007. I stayed with BHS a little bit longer and in 2008 my current partners and I formed Rosehip. We had our first transaction in December of that year.
JV: How do you manage to compete against the large franchise brokers who seem to have taken over what was once a local real estate market on the East End of Long Island?
Joseph Kazickas, Managing Broker and Founder of Rosehip Partners. (Courtesy Photo)
It's very hard to compete against these highly capitalized companies with recognized brand names. My partner Jamie (James)Young and I came up with the concept of trying to service a more fragmented part of the market which was the rental market. Jamie in his research uncovered the domain name of HamptonsRentals.com which was owned by Hamptons.com. So we purchased the domain name from Hamptons.com and tailored it to serve the rental market, both landlords and tenants. The alternative to Hamptonsrentals.com is HREO, which has many duplicate listings.
JV: Why is that?
It's because, with few exceptions, all rental listings are "open" listings rather than "exclusives" so that every real estate broker lists the same properties sometimes with different information due to who updates their information.
JV: Are there occasions where a broker who has an Exclusive Right to Sell would also have an Exclusive Right to Rent?
Yes, and in those situation it is handled as a co-broke as we do with the sale of the property.
JV: So how does it normally work when HamptonsRentals.com is contacted by a landlord who wants to rent their property?
We say to them, great, but in order to improve your chances of getting your house rented you should list it as widely as possible, (an open rental listing), which owners are surprised to hear. But we also tell them, that creates a management problem for you. For instance, if you want to raise or lower your price, you have to call all those different brokers to let them know. But if you list with HamptonsRentals.com as part of the listing process you select which brokers you want the updated information to go to and we send an email to all of those brokers you chose. So the landlords and tenants benefit from non-duplication of information, sometimes not in agreement because of lack of updating, and management of the listing. And as our website became more relevant to landlords and tenants the higher up we have gone in the rankings ion the search for Hamptons rentals
JV: So how do you get paid?
We get paid typically, by the landlord, for executing the transaction - rent the property. We don't charge for the service. The only time we get paid is when we deliver.
JV: How would you compare the number of seasonal rentals to year-round?
90% of our rentals are seasonal, 10% year-round and winter.
JV: Have you seen the rental market change since the downturn in the economy?
What we have seen, and we don't know if a result of the economic downturn or was always there but not recognized, is the demand for shorter term rentals - two weeks or less. Not everyone wants to rent May through September or even July and August for whatever the reason.
JV: Is it possible to say with certainty, how the rental market is doing?
That's difficult to answer. What I can say is that the total rental market is about 5,000 to 6,000 units between Westhampton and Montauk. We are working about 3,000 in our data base.
JV: Do you see more rentals due to the fact that it is harder to sell at prices that some owners are willing to accept and prospective buyer are willing to pay?
Yes. For both reasons, rentals are the coin of the realm
. And that, for us, has other positive consequences. Typically people who buy out on the East End rent first. So that leads to sales for us. So for us, it's not just about the sales commissions. In our first year, 99% of our transactions were rentals, 1% sales. Now it's about 95% rentals 5% sales. It may not seem like much, but that's a significant difference and we expect that trend to continue.
JV: So is it accurate to say that the downturn in the market as it has led to more of a rental market has conversely benefited you?
A 1897 classic summer cottage. This rambling house with eight bedrooms and seven baths is built for carefree fun. Unique third floor with distant ocean views. Listed for $5,495,000 with Rosehip Partners. (Courtesy Photo)
Yes. And it is also a shorter term rental market (one month) than it used to be.
JV: Is it possible to talk about average rental prices?
No, not really. We did a 6 to 8 week transaction where the rental was $325,000 and we did one that was $3,000. If I had to pick the typical rental transaction, I would say approximately $20,000.
JV: How do you handle rentals in the areas of the Town of Southampton that come under the Town Rental Permit Law which prohibits rentals of fewer than 30 days?
We advise the landlords of their responsibility to comply with the law by getting a rental permit. Personally, I think some of the rental laws are antiquated. For instance, if the laws are intended to address health and safety issues, what has that got to do with preventing rentals of fewer than thirty days?
JV: How much of the rental market do you have as opposed to your competitors?
Based on my experience with Dunemere and BHS, I know the average agent does about ten rental transactions a year. Our agents do thirty to forty.
JV: How many agents do you have?
Fifteen. We emphasize to our agents that they are in business for themselves. We provide the opportunities but they determine their own success. The internet has fundamentally changed how real estate works. The control of information used to be the way brokers operated. With the internet, the hoarding of information works against the interests of everyone, sellers, buyers, landlord, tenants, and brokers. We are a member of LIBOR, (Long Island Board of Realtors) and members of LIBOR are permitted to advertise each others Exclusive listings. That's a great advantage for everyone. You can't survive as a "mom and pop" anymore.
JV: Is it fair to say that the Internet is leveling the playing field?
John is a St. John's University graduate, licensed Real Estate broker, DOS Certified Instructor, lecturer, teaches real estate license classes at Cook Maran Real Estate School, and is a well-respected consultant to the real estate industry. He previously taught at LIU and NYU. www.johnaviteritti.com