THE RENTERS PROCESS
Renting a home in New York City can be daunting if you are not prepared. Whether this is your first time renting or you are a lifelong New Yorker, this step by step guide can help you understand what is involved in the rental process and answer any questions that you may have.
WHERE SHOULD YOU LIVE?
The first step of renting in New York City is deciding where you want to live. New York City is made up of all different kind of vibrant neighborhoods, each one special and unique. Begin by doing some research into these different neighborhoods. Ask yourself what is important to you: proximity to transportation, accessibility to parks, a quiet residential neighborhood, bustling nightlife, being close to work, or close to school?
WHEN DO YOU START TO LOOK?
First, decide when you need to move. Do you need to be settled in by a certain date to start a new job? Do you need to be out of your current lease by a certain date? Ideally, you should start to look for an apartments 30-60 days before you need to move. Vacant apartments are available immediately and occupied apartments are usually listed 30-90 days prior to vacancy. If you start looking too soon, the apartments may not be available for your ideal move date.
HOW MUCH RENT CAN YOU AFFORD?
Second, you now need to determine your budget. A general guideline for many New Yorkers is to spend approximately 25%- 35% of their gross annual income on rent. For example, if you earn $100,000 per year, you might end up spending around $25,000 per year in rent, or about $2,000 per month. Landlords generally require prospective tenants to make 40-50 times the rent and have a good credit score/rating.
FIND A REPRESENTATIVE
One of the most important steps is finding a knowledgeable and professional representative that can help you through the process. There are thousands of apartments in Manhattan and very few vacancies. A real estate professional has access to numerous properties you may otherwise not come across and it is important to work with someone that can guide you and save you time and money. Your representative will discuss potential apartments that fit your needs based on neighborhood, size, budget and availability. They will also arrange access to the properties. Once you decide on the perfect home, they will help you secure the apartment. This involves an application process and approval that varies from landlord to landlord. Time is of the essence and your representative will make sure that you do everything possible to secure the apartment.
WHAT DOCUMENTATION DO YOU NEED?
The following documentation for renting an apartment is standard, although landlords may require additional items. Whether you are applying for an apartment in a rental, condo or coop building, you usually will need:
- Application: Landlords have their own application and some will vary.
- Letter of Employment: This letter should be on company letterhead with a current date. The letter should state job title, length of employment and income. It must be signed by a supervisor or person authorized to verify the information (*please note offer and acceptance letters are usually not sufficient).
- If self-employed, a letter from a Certified Public Accountant on company letterhead verifying nature of the business and income amount for the last 2 years.
- Your 2 most recent pay stubs.
- Tax Returns: Most recent tax returns. You only need the 1st page and signature page unless you are applying for a condo or coop, in which case you will need the entire tax return for the board package.
- Bank Statements: Two most recent statements with your name on the statement. Bank Account Numbers are often required on application forms.
- Landlord Reference Letters: This is not always required but can help in the process. If you are unable to obtain a letter, have a contact name, phone number and address readily available.
- Additional sources of income: If you receive income from other sources, you will be required to verify the income through appropriate paperwork. In addition, if you are expecting a significant bonus, you will need documentation available stating the amount.
- Credit report: A credit check will be run by your representative or by the landlord or management company. Credit reports obtained on your own are typically not accepted. Credit history and rating is a significant part of the decision process for a landlord or management company. Let your representative know in advance if you have credit issues so you can discuss options.
WHEN YOU MAY NEED A GUARANTOR
A guarantor is someone who is willing to co-sign a lease on your behalf. They are responsible for all the terms of the lease. A guarantor can be a family member or an unrelated individual. However, they do have to qualify financially. In the event, you do not meet the financial or credit requirements; a guarantor is a good option. Most landlords require the guarantor to live in the tri-state area (New York, New Jersey and Connecticut) although there are exceptions. Landlords typically require that guarantors earn a gross income between 75-100 times the monthly rent. For example, if you are renting an apartment that is $3,000/ month, the guarantor will need to make $225,000 per year. They will be required to produce the same paperwork as a potential tenant. If you think you will require a guarantor, speak with them in advance and confirm they are willing to sign as a guarantor and disclose their financial information along with the documents necessary to secure a lease.
APPLY FOR YOUR NEW NYC HOME
You've found the perfect apartment. Now what? Your representative will guide you step by step through the application process. The first step is to fill out the landlord's application. Your representative will advise you of the necessary paperwork required for a specific owner to move forward. You will also be required to pay credit check fees and applications fees at this time. Once all of the appropriate paperwork is gathered, your representative will present your information to the landlord and oversee the approval process including any negotiations. The rental process moves fast so be prepared. If you are renting in a cooperative (coop) or condominium (condo) you will need to prepare a board package. Please note coop's can take 30 days or longer and condos can take several weeks for the waiver of first right of refusal.
SIGN A LEASE AND SECURE YOUR NEW NYC HOME
Once your application is approved, a lease signing will be scheduled. At this point all funds are due in the form of certified checks. Your representative will advise you on the appropriate fee amounts which, where applicable, typically include the first month's rent, a security deposit (i.e. one month's rent or more) and the broker's fee, all due at the lease signing.