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Find out more about Alicia: Alicia Schwartz, director of the popular rental resource www.HowToRentInNYC.com and the career tool www.TheCareerProject.org, will post about New York City apartment rental deals and news, as well as answer questions about how to rent an apartment in New York City. Email info@howtorentinnyc.com with your questions! |
11. Do I need a roommate?
If you are making over $80,000 per year, then you could afford NYC rent without a roommate. If you are like the rest of us who spend every dime we have the moment that it comes in and make less than $80,000 annually, then YES, you will need a roommate in Manhattan. An average sized studio in Manhattan (300-400 square feet) in an elevator building costs around $2,000 per month. A convertible 2-bedroom in Manhattan in an elevator building is around $3,000. The difference between living by yourself and living with someone averages about $500 per month in additional costs. Add that to your share of utilities and it adds-up fast. Plus share of costs for utilities and other bills. Again, where you live will determine your rent, but you can be certain that sharing living costs with someone in any neighborhood will lesson your financial burden.
12. Should I just live in Brooklyn, the Bronx, Hoboken, Jersey City or Queens?
There is a huge migration of young people moving to Brooklyn or Queens: a new generation of “hipsters” who refuse to pay outrageous rents and would rather spend the extra time commuting than blow money on a tiny cube of a place. This is a personal choice. With that said, I know many people in their 20’s and 30’s who live in all of these areas and swear by them. BUT, because Manhattan is becoming so expensive, the apartments in the boroughs have now become higher in rent as well. Neighborhoods in Brooklyn (such as Park Slope, Williamsburg, and Cobble Hill) are just as expensive as Manhattan was 2 years ago. But they are still less expensive than current prices, and you tend to get more space for the dollar. If you work in any of these areas, it might be smart to avoid both the commute and higher rents, and spend your extra money cabbing into the city on the weekends for your dose of NYC.
OR like my friends you can be the Anti-Manhattanite in Brooklyn because you are above all the commercialism and consumerism and the best restaurants and bars are in Brooklyn... bla bla bla.
ALSO Broker fees are non-existent or lower than if you were renting in Manhattan...it is that whole supply/demand thing.
13. What does “rent control” and “rent stable” mean?
Due to housing shortages during World War II, NYC (and other urban areas across the United States) instituted rules to keep rents in check. They didn’t want to see rents shoot up in urban areas with a drastic influx of people. A residential building that was constructed in NYC prior to February of 1947 is under rent control, meaning that the owner is allowed to charge a rent based upon “reasonable” operating costs plus a “reasonable” profit. Rent control also restricts the rights of an owner to evict a renter. Rent stabilization is basically a continuation of this program, and it too limits eviction except for circumstances allowed by law. Price control is the obvious benefit of rent control and rent stabilization. Some make the argument that rent control only dampens the housing market by providing little incentive for new buildings to be built. It is a political argument over whether or not it is good or bad to have rent control. Debate the merits of the issue on your own. This site is devoted to giving you a basic understanding of what rent control is so that you know what you are getting into when you rent in a rent controlled building. Just the facts.
If you want more info check out:
http://www.dhcr.state.ny.us/ora/progs/oraprogs.htm#howrs
http://www.housingnyc.com/html/resources/dhcr/dhcr1.html
14. I keep hearing the words “condo” and “co-op” what’s the difference?
A CONDO is ownership of real property where apartments are individually owned but the common elements of a building are shared. (IE, hallways, laundry room, roof deck etc..) You obtain ownership to your apartment with a deed, which is recorded with a city or a county clerk.
A CO-OP also known as a Housing Co-operative is a corporation that owns your building. People who own in a “Co-op” are called SHAREHOLDERS, same as shareholders of stock in a publicly traded corporation. Each shareholder owns a specific amount of shares that correlates to their apartment. Everyone who owns shares in the
Co-op are subject to an occupancy agreement which is known as a Proprietary Lease. Owners also own the common elements of the building.
Both CONDOs and CO-OPs have boards that you, the perspective tenant; have to go through in order to rent in their building which brings us to the next question,
15. I know what a CONDO and CO-OP are, but what does that mean if I want to rent in one?
Both condos and co-ops have BOARDS that you have to go through in order for you the tenant to be approved to live there much like being approved by a management company only more difficult. You will have to submit a BOARD PACKAGE. This tends to be way more invasive then renting in a Management Company owned building. This may not seem much different than what I tell you in Question 16 but getting this together times 5-10 board members (depends on how many board members there are, is more difficult)
This typically includes:
1. First months rent, last months rent (CERTIFIED FUNDS UPFRONT...they are returned to you if you are turned down)
2. Signed Leases (this includes guarantor signatures)
3. Employment Letter - stating your length of employment and salary, can be a CPA letter instead if you own your own company
3. Taxes for the last two years
4. Signed “CO-OP/CONDO” rules
5. 2 pay stubs
6. ALL paperwork you need for NYC (IE, lead paint clause, window guards)
7. Recommendations (2 personal, 2 business)
8. Clear photo ID
9. Bank statements
****10. Application fee and other board fees. This could range anywhere from $150- 1000.00 up front. It depends if the owner will cover the additional yearly fees or not. MOST OF THE TIME THEY DO except for the application fee. Application fees range $100-400 on average.
CONDOS are much, much easier to rent in. The BOARD is much more informal and they won’t want nearly as much information as a CO-OP board. This is because the owner is really the one who is responsible for paying their mortgage and taxes, so if you default it is on him or her. A CO-OP board is much more strict because if the owner defaults because you the tenant hasn’t paid them, the entire CO-OP is held responsible.
99% of the time you are renting through a broker if you are trying to rent in a CONDO or CO-OP. Individual owners have a hard time getting together what you need to present to their BOARD so they usually enlist a broker to do it for them.
16. The biggest difference in renting in a co-op vs condo/management company is the THE BOARD INTERVIEW
You will likely have to go through a board interview to live in the CO-OP and never in a CONDO. The owner is allowed to only submit one applicant per month to the board meeting. If you aren’t approved then that owner loses out on rent until they can submit a new applicant for the next month. This means the owners can be tough on you in terms of wanting information.
If the owner picks you as their applicant you will have a scheduled appointment where you will meet with the board (the board typically meets only once a month) to see if they approve you to rent in their building. Boards vary tremendously with how strict they are. You can be very well be qualified to rent this apartment but if they don’t approve you, and they are allowed to disapprove of anyone they want, there is absolutely nothing you can do. They are like the border patrol to their mini country, and you are trying to gain citizenship. I wouldn’t overly stress about the actual questions they ask you in the meeting. Boards are set in their criteria and you will either meet it or you won’t. If you would like to have some idea of what they could ask you, here are sample questions:
QUESTIONS THEY CAN ASK:
Do you have a significant other?
If you do have a significant other how often do they spend the night?
Is there a chance they will move in with you?
How long have you been employed?
Do you plan on staying at your position?
How long have you lived in the city?
If you are in school, what are you in school for? ...
What do you want to do after you get out of school?
Are you close with your guarantor?
After waiting for three weeks without looking at other apartments you could very well be turned down and screwed come the first of the month with no apartment to live in.
17. So, Why rent in a co-op?
PRICE!!! Anything this arduous has to have a silver lining, and in this case, that lining is a significantly cheaper price—no doubt a price cheaper than the rest of the apartments in Manhattan. I live in a co-op. I live in a doorman building, with laundry, 2 blocks from the subway in a trendy area in a big one-bedroom apartment for $2100 a month. The building across the street, owned by a management company, rents a one bedroom that goes for $3200 per month. That is a HUGE, HUGE price difference, even if you pay a 15% broker fee and an additional few hundred up front for board fees.
Of course, nothing in life is free. I had to fight tooth and nail for the owner to pick me, and then I still had to face the board. I was fortunate in that my board was not all that strict. At the time I was a graduate student with loans and no real income other than my guarantor. But because I had a solid guarantor, I was approved. Again, there are exceptions to the rule: this was one of them. Often times, boards will not take you if you do not qualify on your own. So, in exchange for a crunch on my personal time and some loss of pride, I was granted a cool apartment at a great price.
18. How do I search for a condo or co-op rental?
Like I said earlier, most of these types of rentals are exclusively through brokers. For this reason brokers list the addresses to these units publicly on their brokerage website. To find them, go to the SEARCH RENTALS feature on any brokerage website, and you will be able to tell if a listing is to that brokerage or if it is a general rental that they are advertising. The broker will typically tell you if the listing is a condo or a co-op, even if there is no address listed.
19. What do I need to rent an apartment?
(Paperwork and Monies you need before you start your search)
Listed below are all the documents and monies you should have together before your search. Please note that for the money you will need these funds upfront and readily accessible in certified funds. MEANING: You can’t write over a check. You will have to go to your bank and get a certified check or you will have to wire the money directly into the account in order to take the apartment off the market. Common situation: You have all of your paperwork together but you have to wait 2 days for your dad to send you a certified check for the first months rent and security deposit. BAM... another person comes in the next day before your check arrives and they take it off the market. I can’t say it enough, have your money accessible the day you start searching. If you bring the check to the management company/landlord before you get your paperwork together they will wait for the paperwork to come in, but will not wait for your money! PAPERWORK YOU NEED BEFORE YOU START YOUR SEARCH Guarantor Paperwork - 1. Tax Return (usually only the first two pages from last year, or the last two years) Your Paperwork ( with or without a guarantor- Read #20 to see if you need a guarantor) 1. Tax Return (usually only the first two pages from last year) ADDITIONAL PAPEREWORK YOU WILL GET FROM MANAGEMENT COMPANY *** If you are renting in a CO-OP or CONDO they will want all of the above information and then some. Rents are typically cheaper in these situations because you have to go through such an arduous process. For renting in a CO-OP CONDO- please look at question 17 & 18! Money You will need to have together before you start your search 1 months rent- $2000 ***Sometimes management companies might want one-month rent, one-month security AND last months rent. So if you want to err on the side of caution add one more month rent for a total of: $6000 (without broker) $9600 (with broker) Unbelievable right! How are you supposed to come up with $6,000-10,000 on your own before you come to the city? There is no easy answer. As I mentioned earlier if you had a roommate sharing the costs of the broker and therefore also a lower rent you would have to come up with a lot less. The reality is, living in Manhattan or a popular area outside Manhattan will be costly. 20. What is a guarantor, and do I need one? A guarantor is someone who is legally responsible for your payment of rent if you default on your rent payment. Most management companies or individual owners want your guarantor to be related to you, usually in the immediate family, so that in the event of a default, they will more easily be able to collect. There are always exceptions. Your guarantor will be subject to the intense scrutiny of any rental applicant, and will be required to be on the lease. They will need the same paperwork as you would listed above in question 17. Please keep in mind they will need an additional credit check and application fee for your guarantor. Reasons you need a Guarantor: Things you should know about guarantors: In market rate apartments, you may be required to put up significant amounts of security (3 – 11 months rather than the typical one month security) to rent the apartment. A new program – The Insurent Lease Guaranty Program - was recently launched which can act as an institutional guarantor for your apartment lease. This Program is already accepted by major landlords in the NYC metropolitan market. Assuming you have good credit and your annual compensation is a minimum of 27.5 times the monthly rent (substantially lower than the 40-50 times of the monthly rent often required by landlords), the Insurent Program (www.insurent.com) can pre-qualify you in less than 2 hours after filling out the interactive application. After validation of your employment and payment of the guaranty fee which represents a small percentage of the annual rent (approximately 66-78% of one month’s rent), the landlord will receive an Insurent Guaranty for your one year lease. Even if you have an individual co-signer/guarantor for your lease many parents who could financially qualify as guarantors may opt to utilize the Insurent Program and pay the guaranty fee for their son or daughter to avoid subjecting themselves to the burdensome, time-consuming and invasive process of providing 3 years of tax returns, net worth statements, brokerage reports and bank statements required by landlords 22. What is a sublet? Is it the same as an assignment? A possible opportunity, that’s what a sublet is. But, technically speaking, a sublet is when you lease an apartment from someone else who is already leasing it. Simply put, you rent from another renter. Why would someone rent an apartment and then re-rent it to you? Probably because that person need to get out of the apartment, and that could be for a variety of reasons: he or she has rented a bigger or a nicer place, the person bought a home, he or she is moving out of town, etc. In these instances, you might be able to negotiate a significantly lower rent with the individual, because that person most likely needs to move, and like you, he or she most likely can’t, or at the very least, doesn’t want to, pay two rents. So, if that person can recoup a portion of the rent (or all of it), that would be a great deal for all involved. The desperation of another person translates to significant savings for you. When subletting, be certain of two things. The first is that the person subletting the apartment has the authority to do so. Ask for a copy of the original lease and read it carefully. Look for any provisions that could prevent you from being allowed to sublet. Generally, there will be clearly defined clauses that state “no subletting.” Second, decide whether or not a sublet is what you want. You must be aware that when the original lease is terminated, so are all of your rights as a sublet. For this reason, you might want to consider an assignment. An assignment is the act of taking over another person’s lease. In this instance, you garner all of the same rights and responsibilities of that tenant, including all of his or her renewal rights, if any exist. You end-up paying the full rent for the place, but you also get direct access to the management company. When you sublet, the original renter, in fact, becomes your landlord, and any problems that you have with the place have to first go through that person and then to the management company. With an assignment, you skip the middle part. This direct access can save a lot of time in an emergency such as an overflowing toilet or a broken heating unit. 23. Why you should know your credit score before you start looking! (if you end up having bad credit that is) Credit history is a big big big big big big big deal to rent in this city. If you have BAD credit and do not have a qualified guarantor you are in for a great deal of barriers in trying to rent an apartment. Checking your credit months in advance of moving to New York City is important to see if there are any errors or claims. If you see an error on your credit report call the credit bureau and get it expunged before you ever come to the city. This will make your life much easier. It might not be your fault; credit card companies make mistakes all the time. Here are the bad credit history scenarios played out and what you can do about it: 1. If you have bad credit and don’t qualify on your own BUT you have an excellent in-state guarantor who meets the income requirements 2. If you have bad credit BUT you do qualify financially to rent an apartment on your own there are management companies who are much more lenient. A. Jackobson Properties These are the ones I know from working with them personally, ask your broker for others. TELL your broker about your credit issues so they can help you. 3. If you have bad credit and you do not have a guarantor and you do not qualify on your own -NOT ALL HOPE IS LOST! A. Look for a roommate who all ready has an established lease, they are less picky they will doubtfully run a credit check on you and if they do they will like you and your winning personality enough to just either let it slide or pay an extra months up front. Then you just move right in on a sublease agreement.
Disclaimer- Every management company/landlord will want different paperwork but these are a rule of thumb things to have. Could be more could be less
* If you need a guarantor, they will need to have this as well as you, BUT the management company will be far more strict with your guarantors paperwork then yours since they are responsible for you paying.
2. Employment Letter stating length of employment and annual salary (or a CPA letter if you own your own company)
3. Pay stubs (typically 1-2)
4. Bank Statements (typically 1-2)
5. Clear photo of your picture ID
2. Employment Letter stating length of employment and annual salary- If you are a new hire/student, your guarantor info will cover this
3. Pay stubs (typically 1-2) - If you are a new hire/student, your guarantors info will cover this
4. Bank Statement (typically 2)
5. Recommendation from your last landlord (not common, most will take your landlord’s phone number and check that way)
6. Clear photo copy of your student ID
7. If you are a recent graduate they might want proof- a copy of your student ID or an unofficial transcript
8. If you are a student or recent graduate bring a recent transcript or your student ID as proof that you were a student. They will take unofficial transcripts as well. (This isn’t common, but could make your approval process go faster)
9. Application- Condo/Co-op/Management Company will give you the one they want you to fill out when it is ready, you can’t have this pre-search!
10. Credit Check- this is usually on the Management Companies Application (cost $30- 150.00 depending on the company)
You will need at least the first months rent, one months rent security deposit and your broker fee (in case you end up needing one) ready to go in your bank account. So for your $2000.00 studio you will need:
1 month security deposit- $ 2000
(if you use one) Brokers fee 15% of annual years rent- $3600
TOTAL: $4000 (without broker) $7600.00 (with broker)
1. Poor credit
2. Low income, annually making less than 40 times your monthly rent,
3. New Hire- You could make $500,000 a year but if you have been working at your position under 1 year or 6 months they consider you still a risk and would want a guarantor.
4. Student ( you make no money, you need a guarantor)
1. Your guarantor should make a salary that is more than 80 times your monthly rent.
2. Some management companies will only take in-state guarantors (someone from New York) or tri-state guarantors. (New York, New Jersey, Connecticut) Why? Because out of state guarantor’s can be difficult and costly to collect from should you default on your rent. Inquire with the particular company or landlord for specifics.
3. As much as management companies say they will only take in-state or tri-state guarantors, most will bend the rules and take an out of state guarantor as long as they qualify financially.
If this is the case, a good amount of management companies will rent to you because your guarantor is the one who is legally responsible for you paying. They still might want an extra month, or months rent upfront to cover their own behind. If they don’t want to rent to you see answer to #2 below
Companies that I know are more lenient are
B. Croman Realty
C. PAN AM- the best apartments out of the bunch who will take bad credit BUT you do have to work with a broker to have access to them.
B. If you have the money to put 6 months or a year up front. However, the management company can still reject this.
C. Find anyone who will be your guarantor. It doesn’t have to be a close family member, though most management companies prefer it. Some management companies will take a family friend, or distant relative if they are in-state.
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