Don't let movies and TV shows fool you. Renting in New York is tough and much more expensive than pop culture lets on. Once you have an understanding of the New York real estate market, however, you can make it work for you.
New York Real Estate Is Extremely Competitive
This is less of a surprise and more common knowledge, regardless whether you live in New York or not. Allyson Waddell, agent success manager at RentHop, said the current real estate market is competitive for renters, especially during the peak summer season.
What makes matters even more challenging for renters is that the competition isn't prepared to let up anytime soon.
"As COVID-19 deals end and more people continue to move to New York, we expect this number to grow over the coming months," said Waddell. "Inventory does not grow at a rate comparable to the influx of those seeking housing, so competition should continue to grow between renters."
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A Trustworthy Real Estate Agent Is a Must-Have
Newcomers to New York would be wise not to go it alone in searching for an apartment. Carolyn Gagnon, licensed real estate salesperson with Compass, recommends finding a trustworthy, reputable real estate agent and working alongside them.
"Real estate agents who are familiar with the area and understand the common rental curveballs are essential to your renting success," said Gagnon. "From there, know what your actual deal-breakers are -- doable budget (which can dictate if a roommate is needed or not), needed size, desired locations and building amenities, if you need a pet-friendly building, among other considerations."
Prep Key Rental Documents, Now
Don't show up empty-handed or scrambling for key paperwork when the time comes to apply for your apartment. Gagnon recommends gathering together the following documents:
Recent bank statements
Recent tax returns
A letter of employment with recent pay stubs
A copy of your photo ID
Another important item is to know the difference between advertised net effective rent and gross rent. Gagnon said net effective rent is where landlords give tenants a discount and gross rent is what the landlord is charging in totality.
You Must Meet Income and Credit Requirements
Depending on where you want to rent in New York, an applicant's gross annual income needs to be substantially equal to or greater than their monthly rent.
Waddell said potential tenants usually have to have an annual income that is 40x greater than the monthly rent. (This is not a typo.) An apartment that charges $1,500 a month in rent would require its tenant to make at least $60K a year in their annual salary. In addition, applicants must have an acceptable credit history. This means a credit score above 680.
What if you don't meet these requirements? This is where a guarantor comes in for application assistance. Waddell said a guarantor must make 80x the monthly rent. Interested renters that do not have a guarantor may hire and use online guarantor services to apply for the apartment with them. However, Waddell said this does cost money. Tenants that decide to work with online guarantors need to be prepared to pay back the company on a monthly basis moving forward.
You Might Need To Pay a Broker's Fee
Some real estate agents require renters to pay a broker's fee -- and this can be quite expensive.
"A broker's fee can equal anywhere from one month's rent to 15% of the annual rent price," said Waddell. "This hefty sum of cash is usually due when you sign for the apartment, and can be quite costly when combined with the first month's rent and security deposit renters also typically pay."
Please note, however, that not all agents charge this fee. Waddell recommends renters ask their agent prior to viewing a unit if they require a broker's fee. If so, find out how much it is and when it is due.
Sweep the Area at Night
Your dream New York apartment by day could be very different at night. (Read: noisy).
"Check the area around a possible rental at night to understand the city noise level you'll be sleeping with every night," recommends Gagnon.
Good Apartments Go Fast
Remember what we said earlier about the real estate market in New York being highly competitive? Renters cannot bookmark a listing for later and expect it to be there when they return. That listing might slip away from you as soon as that same day.
"Should a renter decide they like something when they see it, they will want to submit an application as soon as possible," said Waddell. "Good apartments sometimes go off the market in a day, and a renter's spot in line to view a unit could be the difference between acquiring the keys or walking away empty-handed."
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