New York City is, for all and intents and purposes, the capital of the free world. So, it should come as no surprise that the New York City real estate market is one of the most desirable and competitive in the world. And while this demand transcends all property types it is perhaps most applicable to the residential rental market.
For this reason, it is imperative that you, the renter, have a cursory understanding of the process and are prepared for what will be required of you to rent an apartment in New York City.
One of the factors that most affects the (residential) rental landscape is the reality that the New York City residential rental market consistently has very low vacancy rates. In a particularly tight market, the available inventory can be less than .5%. And with the constant influx of people from both across the country and around the world, the seasonal arrival of recent college graduates, returning university students and business transfers certain times of the year are particularly competitive. Because of this constant and heavy demand, it is vitally important that you are prepared to act quickly when you find an apartment that is to your liking and will suit your needs.
To assist you in this process we have addressed (below) some of the questions most frequently asked by you, the prospective renter(s).
I’ve just moved to New York City and am wondering where I should live?
New York City is comprised of multiple neighborhoods all of which have their own wonderfully unique and distinctive characteristics. If you are new to New York City and have not yet identified with or developed a fondness for any particular area then there are a number of practical factors that should be considered when determining where you should live. The 3 most frequently considered factors are…
- Proximity to job-how easily can I commute to work (or school)
- Budget concerns-where can I get the most apartment for my money
- Extraordinary housing requirements-Outdoor space, back yard, multiple bedrooms, etc.
That said, there are a myriad of other factors worth considering such as water views, noise levels, school districts, proximity to nightlife, etc.
Dressler Group representatives are here to assist you, making sure you are asking the right questions and providing you with answers that you can depend on.
How long will the rental process take?
Identifying a suitable apartment is usually the most time consuming part of the process. The exception to this would be if you are renting a Condominium or a Co-op (this is addressed in a subsequent paragraph within this section). Barring an extraordinary housing need, the process of viewing apartments and identifying an acceptable unit usually takes 2-3 weeks.
Apartments typically come “on the market” at the beginning or middle (15th) of the month prior to the month the existing occupant(s) will be vacating the unit. If you rent an apartment in a standard rental building and you have identified the apartment you wish to rent you can expect the leasing process to take 2-3 business days on average.
In instances where you elect to rent a Condominium or a Co-op you will be required to complete and submit a full board package. Fulfilling the requirements and compiling the documents necessary to complete a board package can take as little as a few days (depending on preparedness) but will probably take closer to a week to complete. Once compiled, this board package must be submitted to the management company for verification. Once verified, the management company will forward the board package on to the managing board of the building for further review. Upon the satisfactory completion of these steps you will then be scheduled for an interview. Once the interview has been conducted you can expect to wait another 2-3 days for confirmation of board approval. The entire board application process takes approximately 30 days and should be factored into your timeline.
It is advisable for you to begin your apartment search 30 days prior to your intended moved date.
How do I know how much rent I can afford to pay?
The general rule for housing budget is 25-35% of your gross annual income. This is the number banks look for when evaluating a mortgage loan application.For rentals, landlords generally like to see a tenant earn (gross) 40 -50 times the monthly rent. This translates to a 24-30% rental expense. Of course, being more conservative is always acceptable and preferred.
What documents will I need to complete the rental application?
Here is a list of items generally required by a landlord in order to rent an apartment. Understand this list will vary, slightly, from building to building.
- Rental Application: Rental application information is pretty standard. All Landlord and management companies require the same basic information with minor variances.
- Credit Report: This will be run by the management company, a real estate brokerage company or the landlord. There is a fee, assessed to you, by the entity running the credit and this fee is non-refundable even if you are not approved for the rental.
- Bank Statements: 2-3 months of your most recent bank statements (not website print outs unless they are a PDF of a true statement) that must have your name and account number printed on the statement.
- Investment Accounts: Retirement and Investment account statements. Like the bank statements, these should be the most recent months’ statements and have your name and account number printed on the statements.
- Paystubs: If required, they generally want paystubs covering the most recent 30 day period.These, too, must have your name printed on the check stub.
- Tax Returns: If required, a landlord will want the first 2 pages of the return(s). If you are renting a Condominium or a Co-op the board will required all pages of the return(s). Landlords typically require 1 year’s return, Condominiums and Co-ops generally want returns for the last 2-3 years.
- Letter of Employment: A letter from your employer should state your current position, length of employment, current gross salary, bonus eligibility/history, and likelihood of continued employment. Offer letters are acceptable in some instances and are considered on a case by case basis.
- Landlord Letter: A letter from your current landlord stating how long you have lived in the residence, the amount of rent you are paying, that you paid rent in a timely manner and whether or not you were a nuisance while living in the unit.
- General Letters of reference: Letters from friends and co-workers attesting to your over-all character.
It is worth noting that the requirements for renting an apartment in a rental building are much less stringent and rigorous than the requirements of those renting in a Condominium or Co-operative building. Typically a non-Condo or Co-op rental will require a fraction of the items listed above.
What if I don’t qualify to rent an apartment on my own? Do I have any options?
Yes. You can have a Guarantor act as a co-applicant. A Guarantor must have good credit and have income above and beyond what is needed to maintain their obligations and still be utilizing less 25-30% of their gross income. Additionally, a Guarantor may bring compensating factors to the table such as substantial liquid assets.
I’m approved…now what?
Once approved, a lease signing will be scheduled. At this time, you will be required to bring certified checks for the following:
- First Month’s Rent
- Security Deposit
- Broker’s Fee
Make sure you understand what is required of you to arrange and schedule the move in to your new apartment. Generally, this must be coordinated with the building’s superintendent and should be scheduled as soon as you know the date on which you would like to move.