Ok so you’ve picked the location you’d like to live in and you’ve decided whether or not to hire a broker. You understand the tips and tricks to look for when looking at an apartment and avoided the traps, and all that has led to the place that you really like the look of, awesome! It’s now time to register your interest in the place and put in an offer.
Making an Offer
The first thing you need to know about renting an apartment in New York City is that the general rule is:
You need to prove a base income (before bonuses and extras*) of more than 40x the monthly rent.
* Note: Some places you apply for may allow for bonuses and extras to be included in your rent. If this is the case, you will need to get a letter from employer that confirms it’s a guaranteed bonus, to go with the rest.
So what does this 40x mean? It means that if the rent of the apartment is $4,000 per month, you will need to show a base income of $160,000 per year. Yep. It’s an outrageous amount of money, I know, especially considering the cost of apartments here!
Costs to move in if you earn 40x rent
If you do qualify for this, you will generally pay (using the above example again) : first month’s rent ($4,000), a month’s security ($4,000) and your broker’s fee. That will the “cost of moving in.
What to do if you don’t earn 40x rent
If you don’t earn the appropriate amount of rent, you do still have a few options (take it from me, it’s possible).
- The first option is the most straight-forward and is quite common, however for those of us who have moved to the U.S. from overseas, it’s going to quite difficult: A guarantor. A guarantor is someone who signs a document basically saying that they agree to cover the rental agreement if you cannot make the payments. Sounds simple, but here’s the catch: The guarantor must prove (in the same way, with the same forms, that you will below) that they earn 80x the monthly rent of the apartment (to use the example above, they need to be pulling in $320,000 per year! In general, too, a guarantor has to live and earn that income in the U.S for it to be considered (some will only take those who are close in NY/NJ/CT).
- The second option is a bit more difficult but can also be worked through. You basically have to show in a more roundabout way that you can afford to make those payments. You can do this in a number of ways, but in general, it will require significant savings covering a portion of the lease agreement. Most buildings will then require a deposit up-front to cover more rent than would someone who qualifies against the 40x requirement. One common occurrence is that you will have to pay (again, using the previous example): First month ($4,000), last month ($4,000), and two months’ security ($8,000) in addition to the potential broker’s fee. Safe to say, this option is a possibility for some, but that $16,000+ outlay for many will simply be too much.
Documents required for a lease
If you can complete those requirements, you are then going to need to provide:
- Photo ID (preferably a passport or local state license)
- A letter from your employer (on letterhead, and signed) confirming your income (salary), position, and length of employment, and to save yourself some trouble, ensure that it’s dated and less than 30 days old.
- Three recent pay stubs (these will need to include your employer’s legal name, your legal name, and ideally match the address you’ve provided them)
- Tax returns for the past two years (or as many as possible – in my case, I only had one)
- Bank statements (all relevant ones) for the past two months (they want to see that you have a consistent balance and enough cash flow)
- A paragraph or two detailing yourself never hurts. This just sums up who you are, what you do, and goes towards the idea that you’re a trustworthy and reliable kind of person who deserves to get this apartment. Detail a snapshot of your last year or two and put yourself in their shoes.
- Finally, if possible, a letter of reference from your current landlord.
In addition to all of these, if you run your own business or if you have some extenuating circumstances, you may need to provide a number of other tax-related documents or in many cases a letter from your CPA Accountant detailing you, your business name, that you’re in good standing, and that you’re all above board.
To put in a formal application there will generally be some sort of non-refundable cost. This is normally between $50 and $200 and is the cost involved with processing a credit and background check. You won’t get this back, no matter what happens. In many others, there will also be a deposit of a month (or similar amount) upfront to ensure that you’re not wasting anyone’s time and are serious about the place. If you are not accepted, this comes right back to you, but if you back out of the place after being accepted, you won’t get this back. The seller will generally agree to take the apartment off the market and not accept other applications if they have taken this money.
There is also a chance, like in my case, that the landlord may want to sit down with you and have a chat. My tip is to always be as open and honest. They want to get a feel for who you are, so just treat it like a slightly less formal business interview.
The Contract and Terms
Woo! You’ve been accepted, congratulations. Now comes the time to put your legalese hat on. Don’t be pushed around, and know your rights.
The term you’ll hear thrown around a lot is: “Blumberg Form”. All this refers to is the standard form version of a rental agreement. You’re realistically not going to be able to argue in or out of any of these terms so it’s probably not worth your time. You should always know what you’re signing so you can read them in advance, here!
In many cases, you will also receive an additional document(s) which will detail further terms. YOU WANT TO READ THESE! The first rental agreement is standard, but anything that goes with it is a separate contract and like anything in New York, it’s easy to opt-in to things you might not realize with one wave of your pen.
Things to look out for
- Can you have a dishwasher/washing machine in the apartment?
- Can you have pets?
- When is rent due (and what happens if you don’t pay)?
- How do you pay rent?
- Can you have additional people in the apartment?
- Can you sublet? (P.S. did you know that without good reason, the landlord can’t stop you from subletting?)
- Will the apartment be repaired/painted before you move in? (they don’t legally have to, but most will if you want)
- Will the apartment be cleaned properly before you move in?
- Do you require renters insurance (YOU REALLY SHOULD – more on that later)?
- When can you move in?
- When do you have to move out?
- What do you have to do when you move out?
- .. and lots more.. Do a bit of a Google if you have any questions or comment below!
This is all negotiable. So if you really want something in particular, be kind (they could still just take the place away from you) but don’t back down if you think something isn’t right.
Once it’s in writing, it’s there for the whole lease. Know your rights.
Lead Paint Disclosure / Notice / Release
You will also be given a lead paint release. This is normal, don’t worry. You don’t necessarily have lead paint in the apartment but it’s good to read everything in the release to know what the rules are in NYC.
Ok. You’re done!
If you can sign all this and agree to dates, you’ve got yourself an apartment! Now the fun begins…