Renting in NYC, are you prepared?

By: Lesley Steiner

So you just accepted a job In NYC! Congratulations! For many, NYC is the dream place to be, but to others, a stepping stone to get ahead. This is one of the first things I try to understand when working with someone who is unsure of where they want to live. New York City is one of the most exciting places in the world, but also one of the most expensive places for housing, with some of the highest average rents so sometimes it’s better to look for other cities especially if you’re planning to purchase one. You can check my company and see the requirements for a jumbo loan that could be suitable you. Annually, around 250,000 people move to NYC. The Census just reported that NYC’s population has reached 8.3 million, the highest ever according to the Huffington Post. This constant demand has created the insane process that no one goes through unless moving to NYC or possibly purchasing.

To help you through this process, having an experienced real estate agent (broker) is essential. Your broker should make your exploration informative yet fun. Part of our job is to help alleviate the stress of your move and to make sure you’re well prepared. For more real estate information and guidance visit Reali.

 

So what do you need to be prepared?

1. Renters in NYC must earn 40-50X the monthly rent ($4000 rent, should make $160K/year), excluding discretionary bonuses. This must be guaranteed income. IF you fall short of this:

  • You can use a qualified guarantor that earns 80-100X the monthly rent per annum.
  • You also may have the option of paying extra months in your security deposit or paying the full years rent upfront.
  • If you are one of the lucky ones to be looking when a rent stabilized apartment comes on the market, you either need to qualify on your own or have a qualified guarantor.

2. Be prepared with all of your documents. Missing documents means your application is not complete, and you can lose your first choice to another applicant who is prepared. At a minimum you and your guarantor need:

  • Updated (within 30 days) Employment letter or Offer letter, stating your position, length of employment (or start date), and guaranteed income, which can include all guaranteed bonuses. This has to be on company letter head and signed by your HR Department or Immediate Supervisor.
  • 2 most recent, consecutive paystubs. Don’t worry if you haven’t started yet, these back up your employment letter.
  • Most recent bank statements. They should clearly show account number, name and address. Investment statements are an asset too. If you have just moved to the US, you must open a new bank account. A letter from the bank will fulfill this requirement.
  • Valid Government issued photo id or Passport (if passport, will need Visa)
  • Top 2 pages of most recent Federal Tax Return and W2 (if this is your first job or you have just moved to the US, this is not needed)
  • Letter of reference from current landlord or Mortgage Company. A letter from your HOA would also be acceptable.
  • Money – Refundable and Non refundable application fees. (Generally refundable deposits are between $500 and 1 months rent; non-refundable application fees are $75-$150.)

3. All applicants should check their credit before beginning the search. Landlords in NYC will take the best qualified applicant meaning highest income and best credit report. Visit www.wallethub.com for a free copy of your credit report that is updated daily. Or you are entitled to one free credit report a year through the falling sources, so take advantage of this and go to www.creditkarma.com for your credit score and www.annualcreditreport.com for your full credit report. But be warned, landlords will not accept your credit report, they will run their own. Depending on the landlord, you can be approved anywhere from an hour to 2 days.

Many Landlords will not accept a guarantor for bad credit! Depending on the reason for the credit issues, you can be looking at a full year’s rent plus 2-3 months security deposit. Smaller landlords may just take 3-6 months of security.

4. Yeah, you are approved! When you come to sign the lease, be prepared to pay:

  • First months rent
  • One-to-two months of rent as a security deposit
  • Any broker fee that you owe

These are payable by bank checks only, rarely can you use a personal check. So having your funds available is essential to the process.

One of the perks of living in NYC…you don’t need a car, so when calculating your budget, figure all those car payments and insurance into your rent. Public transportation (unlimited subways and buses) are only $113 per 30 days. Ask your new employer about transit check. You can pay for it in pre tax dollars! Now that you’re prepared, let’s go explore your new hometown!

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