Apartment Hunting 101
Before making the move to New York, I spent hours researching everything I thought I would need to know about the city. But it seems like no matter how many articles you read from a Google search stating the same thing, nothing really prepares you for the anxiety that comes with looking for an apartment. People all over the world complain about how stressful the moving process is, but NYC is a city that doesn’t give a crap if you can technically pay for an apartment. They will also want a large deposit, broker fee, your first born child, and a goat. By some miracle, my new roommate and I were able to score an amazing building in the Upper East Side (the only neighborhood in which I’d ever live) with an elevator, brand new laundry room, and a north-facing balcony – all, within less than two weeks. It’s not unusual that we would find a place in that time span, as the apartment turnover rate here is insane and units can be rented out within a matter of days. However, my bank statements and tax returns were rather pathetic, and THAT is why I’m still pleasantly surprised that my name is now… OFFICIALLY… on a New York City lease. I’ve been subletting for the past three years, which is what most young NYC newbies do, unless you’re a trust fund asshole whose parents can buy you Derek Jeter’s old penthouse for a humble $15.5 million. Even though you have legal rights as an occupant (ie: someone who rents an apartment but is not the leaseholder), it feels a lot more secure when you get to sign a lease personally and are listed as the actual tenant.
At this point, the basic rules of NYC real estate is common knowledge amongst all New Yorkers, as well as those who are smart enough to do their homework on the city before they move here. After the past month of “last-minute-having-to-move-because-my-landlady-was-a-senile-old-bat-ness”, however, I thought I should reiterate those rules along with some bonus tips that I learned during the process:
- You need to have an annual income that is at least 40x your monthly rent. Ex: If your rent is $1500/month, you need to make at least $60,000 every year. The leasing company will require bank statements to verify this amount, but if you’re new to the city with a brand new job that makes bank, then they’ll usually accept a letter from your employer.
- If you’re an independent contractor like me, you might encounter some backlash because landlords don’t consider it a stable source of income. Of course, this is ridiculous if you think about how the world’s wealthiest people are usually self-employed… not to mention the real estate brokers who actually sell you the apartment. In this case, make sure to have your tax returns ready to show how much you’ve been making annually. (Or if you have a fatty savings account, you can actually pay for the entire year up front. Apparently, a lot of college students in the city do this.)
- I was raised to believe that it wasn’t polite to discuss money and ask people how much they make. Does this apply to you? Okay cool, now forget everything you learned. The people in charge of your apartment will be seeing EVERYTHING from your bank account balance, to your annual income, to your tax forms, to your credit score. And more than likely, they’ll be charging you a $100 fee in order to check your credit.
- “Must have good credit.” This bit is annoying, because different landlords have different standards as to what they consider “good credit” to be. Some high-end buildings or co-ops may be extra picky and have a mandatory rule that your credit score has to be over 740. Others say that anything over 620 is fine. Honestly, I’ll never understand this requirement just because credit is a form of debt. But if you want to move here, you gotta deal with it and keep your credit score as high as possible. Open store cards or credit cards, but don’t max them out, and ALWAYS pay on time (duh).
- For some buildings, they will require you to maintain a certain balance in your savings account. My company requires that I have a consistent balance of $3,000 in my savings (hahaha SUCKERS… I don’t even have a savings account). If you don’t, then they may require a guarantor.
- Guarantors. Also known as “co-signers”. If you don’t meet one or more of the above NYC apartment rules, then you’ll need to have a guarantor. Mind you, not all buildings accept them, but most do. Guarantors tend to be case-sensitive but for the most part, they need to make at least 80x your monthly rent per year. I know, it’s stupid. If my parents made 80x my monthly rent per year, they’d just buy me a freakin’ house and let me pay them back. Also, some buildings won’t accept out of state guarantors – and if they do, then they’ll either have to make 100x the rent or you’ll have to put down an extra security deposit. This step is a pain in the ass because of all the extra paperwork, but guarantors who are knowledgeable about the situation are aware that even though they are legally liable if you don’t pay your rent on time, nothing gets recorded for them. So it doesn’t go on their permanent record, it doesn’t affect their credit score, and it’s nothing that they have to “claim”.
- Fee vs. No Fee: If you’re looking for an apartment with a real estate broker, you may or may not have to pay a broker’s fee. A “no fee” apartment generally means that the landlord pays the broker directly so you don’t have to. This also means that your rent may be slightly higher in order for the landlord to pay the broker. For example, the units in my building are all no fee apartments – but I had to pay a broker’s fee, because my broker was able to negotiate the price to be $1000 less per month. Since it’s all paid up front, it stung to fork over the cash. In the long-run, however, it actually saved us almost $10,000. Our broker’s fee in this situation was a month’s rent, but it can be as high as 15%+ the total annual rent. The good thing is that it’s usually negotiable, as the broker gets to pocket the cash on the spot.
And the most important tip that I’ve learned…
…BE NICE. When I looked up the company who owns my building (plus several others), they had the WORST reviews all over the web. Everyone talked about how management sucked and that the leasing agent I was working with was psychotic. Obviously, this sent me into panic mode, considering the fact that I just handed over an enormous cashier’s check. But then I thought about it and, as Dr. Phil says, “I don’t care how flat you make a pancake – it always has two sides”. People in NYC can be insanely brash, pushy, and self-entitled, so who knows if they pushed the leasing agent to their breaking point? My roommate and I were perfectly pleasant to both our real estate agent and leasing agent from the get-go and because of that, they have both bent over backwards to get us approved for our apartment. Even though I didn’t fit any of the basic application requirements, they made us an exception to their own rules “just because they like us”, which leads me to a principle that I learned back during my high school years: If people like you, they will help you. I’m not saying you shouldn’t make an effort to look good on paper because, obviously, that’s important. But it’s not all black and white – not even in New York City. At the end of the day, there ARE exceptions to the rules if you know how to treat the right people the right way. If you approach the NYC real estate market like a bratty child, you’re going to get your hand slapped (or your face punched in). If you’re transparent from the beginning and treat people nicely, however, your chances of someone taking a chance on YOU greatly increase.
As much as it bugs me to say it – just because this whole apartment hunting/application situation has been so stressful – it was a fantastic learning experience. The ridiculous real estate requirements they have here are annoying as hell, yes. But if you get through it, then renting an apartment in almost any other place in the world will be child’s play in comparison.