Getting Prepared - What You Need to Rent an Apartment in New York City

Many prospective renters from out of town come to New York City expecting that they'll just find a pretty apartment, sign the lease, hand over a check and get a shiny new set of keys in return. Unfortunately, the experience of renting an apartment in New York City is not nearly so simple. In fact, many have compared the experience of RENTING in New York City as more involved than actually BUYING in many other cities!

Before you pack up your bags and choose another big city, it's important to understand exactly WHY the application process is so much more demanding. It really boils down to the strong tenant laws in New York. If a tenant does not pay his or her rent, New York City does not allow simple and immediate eviction, but rather an extended process involving housing court and a host of potential complications that can make it very time consuming and expensive for a landlord to evict anybody. The end result is that a landlord can lose tens of thousands of dollars in the process of trying to evict a non-paying tenant. To prevent that, landlords in Manhattan have become very careful and selective when it comes to the finances, employment and particularly credit history of prospective tenants.

The GOOD NEWS is that you can make this process vastly simpler and easier by simply preparing for it. And here's where I can offer some immediate assistance even before you see a single apartment. By compiling the documentation and information that you need, and reviewing your credit report to ensure that there are no "surprises," you can be ahead of 99% of all other renters. And that can come in VERY handy when your broker finds you that exceptionally good deal and lands it for you by virtue of your ready-to-go paperwork!

OK, JEFF, WHAT DO I NEED TO QUALIFY FOR AN APARTMENT RENTAL IN NEW YORK CITY?

An applicant will need to earn 40x the monthly rent. So to rent a $2,000/month apartment, the landlord would want to see the applicant earning $80,000 per year. Sure, there are many stories of people getting apartments with far less income, but these situations are far less common than the stories themselves. Virtually every reputable landlord will insist on these standards. If the applicant cannot meet the income requirement, or if the applicant has weaker credit, a guarantor, or co-signer, will be necessary. The landlord generally wants to see a guarantor earning 65x to 80x the monthly rent. The landlord may or may not combine incomes of multiple applicants/guarantors...your broker can guide you to the specific policy of any particular apartment in which you have interest. Some landlords will prohibit guarantors from certain states...basically, those states with homestead exemptions (e.g. Florida, Texas).

SO, JEFF, WHAT DO I NEED TO GATHER TO RENT AN APARTMENT IN NEW YORK CITY?

Assuming that you are financially qualified, or have a financially qualified guarantor, you'll need the following in almost every instance. These are not requirements of Citi-Habitats, rather these are the requirements of virtually every reputable landlord in New York City...

• CREDIT CHECK: Either we or the landlord will run credit/tenant report. Credit check fees can range from $50 to $100 per applicant and guarantor. The report includes eviction search, court records search, lien search, and other searches intended to assure the landlord of a problem-free tenant.

• LETTER OF EMPLOYMENT: You should ask your employer for a "Letter of Employment" almost immediately, since this is the one document over which you will be dependent on someone else getting to you in a timely manner. Since this can take several days, it's therefore best to ask for this IMMEDIATELY so you'll have it when you need it. If you have an older letter of employment, such as one when you started work more than 3 months old, chances are that the landlord will want to see an UPDATED letter of employment, so keep that in mind and ask for an updated letter to be on the safe side.

• FEDERAL TAX RETURNS (Form 1040): You'll want to gather your last 2 year's worth of federal tax returns. You don't need the whole return, or the city/state portions. Just the first and signature pages, and be sure to sign the return (e.g. if you're accountant left you with an unsigned copy).

• CURRENT BANK STATEMENT: Everybody of course likes privacy, but when it comes to getting yourself accepted into a good building, you'll want to show MORE not LESS. Choose the account with the highest balance, or if your money is spread among multiple accounts, bring multiple statements. If you keep most of your liquid assets in another type of account (e.g. a brokerage account) that can be an alterative to a bank statement. The goal here is to assure the landlord that you have well more than enough money for rent, living expenses, potential emergencies, etc.

• PHOTO ID: We'll make a copy for the landlord of a driver's license or passport with your photo and name/address clearly visible.

The following are supplementary documentation required by many reputable landlords:

• 3 MOST RECENT PAY STUBS: If you have direct deposit, bring your direct deposit stubs if you have them, or alteratively print out your bank statement and circle those msot recent 3 deposits.

• LANDLORD REFERENCE LETTER: Should state your name, dates of occupancy, and note that rent was paid in a timely manner. Ideally, this letter should be positive and mention that the landlord recommends you as a tenant, although we can't always get the landlord to type anything more than a basic reference letter. If you are currently living with parents, you can actually submit a letter from your parents attesting to that fact, and also assuring the landlord that you've been a good occupant. If you are subletting, provide the recommendation letter from the sublettor.

The following are often required by Condo and Co-op sublets...

• PERSONAL AND/OR BUSINESS REFERENCE LETTERS: Depending on the building, you may be required to provide letters from references stating how long they've known you, a summary of your character, etc.

In the case of a guarantor, virtually ALL of the same documentation listed above is required as well, however the "Landlord Reference Letter" is not needed for the guarantor.

WHAT IF I OWN MY OWN BUSINESS?

No worries here. In lieu of a "Letter of Employment," you'll get a CPA or accountant's letter stating your Annual Income for the past 2 years. Ideally, the letter can also approximate net worth, and discuss the line of business, and length of employment or self-employment.

Sound like a lot, right? But this is the biggest step you can take RIGHT NOW to securing your dream apartment.

Questions about the process? Don't hesitate to email me!