Whether you’ve lived in New York City for years or are ready to relocate, you’ll find it’s a jungle out there when you start looking for a rental apartment. It’s stressful and expensive. There are a few things you learn very quickly.
1. You need to prove income of at least 40X your rent The first thing you find out is that landlords typically require you to have an annual gross income of forty times your monthly rent. If you cannot provide tax returns and other documentation to prove that, there are ways to get around the hurdle.
- Find a guarantor. The guarantor will guarantee your rent payments to the landlord, so if you fail to pay, he can go after the guarantor. It may be difficult to find someone to go out on a limb for you. Young renters typically have their parent or another family member as a guarantor, but boomers may not have that option. In addition, a guarantor has to prove income of 80X the monthly rent.
- Use Insurent. You can use an outside company to guarantee your rent payments for a fee. One company that does that in NYC is Insurent. They check you credit rating and review your finances, but they are more lenient than most landlords. Expect to pay a fee equal to almost your monthly rent.
- Offer to pay from several months to a year of rent in advance. If you choose this option, make sure that after the first year you can go on a normal monthly rent payment schedule.
2. You’ll probably need to use a broker. With internet full of tantalizing apartment ads, why would you need a broker? It’s because many of the ads online are not real. Unless you deal directly with the landlord who has multiple buildings and many rentals, be prepared to pay a broker to help you find an apartment, especially if you moving in from out of town. The broker will get a fee between 7% and 15% of your first year’s rent, but a good broker will hold your hand throughout your search and help steer you to an area where you’ll feel at home.
3. You’ll need to move fast Like everything in NYC, the rentals market moves fast. Apartment are typically advertised no more than a month before the move-in date. If the apartment has a decent price to quality ratio, expect that several people will be competing with you for that rental. If you are serious about renting, you need to come well prepared to each showing, just in case you want to pounce. Have all your financial documentation ready (last tax return, pay stubs, pension information, your social security letter stating the amount, etc.) in order to file an application with the landlord’s agent. If you need to have more time to mull over your rental decision, you may get that if you look at brand-new buildings or rentals still under construction.
4. Expand your range outside Manhattan If you want more for your money, considering renting in the so called outer boroughs: Brooklyn, Queens, and The Bronx (Staten Island may be too far most relocating city boomers). They are only minutes out of Manhattan and offer a lot more space for your money. Just make sure that you are looking in areas with good public transportation options, so even if you have a car you don’t need to rely on it. Consider the distance to busses and subways and also check if the subway station has escalator or elevator. You may be able to manage long stairs, but it’s likely that you’ll have friends who can’t.
5. Don’t expect to negotiate with the landlord Speaking of wasting time, be sure you only look at apartments you can afford with all the fees. Don’t expect to be able to negotiate anything– it’s a competitive market! Don’t get your hopes up for an apartment that’s out of your price range and expect to get a break.
6. Be prepared to a large upfront cash outlay In addition to the broker’s fee equaling 1-2 months’ rent, you also need pay your new landlord at least two months of rent upfront (first month’s rent and one month security deposit), so you are looking at an immediate cash outlay equal to 3-4 months of rent. Plus you will have to pay $100-200 in credit checking and application fees to the landlord. Even apartments listed as “no-fee” may have broker’s and move-in fees.
This post has been modified from a post by Melissa Kravitz that first appeared in MyFirstApartment.com, and is used with permission.