June 11th, 2016 9:35 AM by Nelson Aybar
As summer starts to heat up, so does the real estate rental market in New York City. This is the time of year when most leases are signed. Sometimes, leases are signed in the apartment as it is being shown. Apartments move fast, especially the nicest ones and the best deals.
Since it is such a quick market, it makes sense to be as prepared as possible and to position yourself to be the best applicant. How to stand out in a sea of paperwork? We’ll walk you through the process and how to prepare yourself to shine in the hottest rental market.
Although it might seem like it’s early in the process, June is a great time to get started researching apartments and neighborhoods for an August rental. Giving yourself close to 60 days will ensure that by August, you will know exactly what you are looking for and in which neighborhood. It will also give you the opportunity to meet with different real estate agents and find someone who you enjoy working with, because finding an apartment in New York City is not for the faint of heart.
Keep in mind that housing expenses should not exceed 25% of your income and that many landlords require that you earn 40 - 50x the rent. If you don’t earn 40 - 50x the rent, you will most likely need a guarantor to sign the lease with you.
What’s a guarantor, you might ask? It’s someone who makes 75 - 100X the rent who is willing to sign onto a lease, basically vouching for you that you will pay the rent. Parents and relatives are likely suspects for this role and with strict income requirements, it shouldn’t come as a shock that you might need one in order to get your dream apartment. All landlords are different and some may want a guarantor to reside in the tri-state area, or in New York. With each apartment you apply for, check for the landlord’s requirements.
If you do not have any credit history, social security number or guarantor, you can look into working with INSURENT, which is a lease guaranty company that many landlords will accept as an alternative. Click here to learn more about Insurent.
Since you are starting the process with plenty of time, also take a moment to run your credit report through a free service, like AnnualCreditReport.com or Credit Karma. Running your own credit is a soft inquiry and does not affect your credit score. By doing so, you’ll get a good idea of just how strong your credit is. And although 60 days most likely isn’t enough time to fix any errors on your credit report, at least you’ll be prepared to present your side of the story to potential landlords if there are red flags on your report and offer incentives, like a higher security deposit or an additional month of rent paid up-front for free market or decontrolled apartment. As for rent stabilized apartments, the most a Landlord can accept is first month and one month security deposit.
There are about 38,000 rent stabilized apartments in New York City. They are in buildings that were built before 1974 and have more than six units. The rent for these apartments are normally less than $2,700 a month, but can be more if the owners have received a J51 or 421A abatement, a tax break that landlords get for undertaking significant improvements to the building.
If you do find a rent stabilized apartment, make sure that the lease reflects that it is and what the breakdown of the monthly rent will be and what the allowable rental increases will be from year to year. We have an excellent selection of no-fee, rent-stabilized apartments that are on the market now.
After you have your credit report ran, the next step is to put together all of the documents that most landlords in New York City want.
A completed application
Employment verification letter on a company letterhead and signed stating: (1) Position (2) Length of employment (3) Annual salary (plus any bonus or commission)
**If self-employed, a letter from CPA stating: a. Nature of business, length of time in business, position, and last years’ income, this year’s projected income and signed contracts from your clients showing contracts if applicable
2 - 3 most recent consecutive pay stubs (If applicable)
Recent bank statement (checking and savings/investment)
Copy of Government photo I.D.
Last 2 years of W-2 and 1st two pages of tax return and schedule C if available
Letter from current or previous landlord stating address, rent amount, that applicant was in good standing since they paid rent on time and has been a good tenant
To help yourself stand out from the crowd, consider writing a personal letter to the landlord, explaining why you love the apartment so much, and a bit about yourself. Another way to do this would be to include a resume so the potential landlord can learn more about your background and see that they would be renting to a trustworthy person.
Since there is so much documentation that is needed, it makes sense to scan all of your documents ahead of time and combining them to make one neat PDF file. You can keep this PDF in an email draft so that when you come across your ideal apartment, you’ll be able to forward everything to the agent in an instant.
Consider printing all of these documents out as well and keeping a copy of them with you so that you can hand everything over to the agent showing the apartment when you fall in love. Keep in mind that you’ll still need to fill out an application for each different landlord, but having the supporting documentation organized and pulled together ahead of time will put your application at the top of the heap.
Sometimes the first apartment that you apply for might not work out. While you’re waiting to hear back about that first apartment continue looking at additional apartments, since until you have a signed lease, anything can happen. Good luck and happy hunting during this real estate season!