I’m a real estate agent in New York City, and today we’re going to teach you a bit of everything you need to know before you start renting in the city. Maybe you’ve been living in a city already but you had roommates and so you’re striking it on your own, or maybe your parents sort out all your rental needs and so you have no idea what you’re doing, or maybe you’re coming from out of state and it makes even less sense because New York City is such an anomaly. Either way, by the end of this article, my goal is that you would be a little more confident coming to the best city in the world.
We’ll talk about practicals like what you need to prepare, what you should be doing, what should be looking out for, and I’m actually going to add in a little secret that real estate agents don’t want you to know, and it is how to find off-market properties on your own.
1. Inventory Moves Quickly
If you find an apartment that is listed today, if it’s a popular apartment, there’s a chance that it’ll go today. Now, it doesn’t apply for apartments across the board; apartments are sitting a week to three weeks depending on how popular they are. Now the actual apartment can be taken off the market really quickly, but the process of getting approved for an apartment varies, and it can be as long as a month.
2. Condos vs. Co-ops
That depends on the second point, which is the difference between a condo and a co-op. A lot of you are familiar with condos, but co-op’s are a little different and they’re unique to New York City because of the way the ownership is determined. Now, although it doesn’t impact rentals as much, but what you will have to know about co-ops is that they’ll have much more stricter or stringent financial requirements, like you’ll have to have more money in the bank, or you have to make more money, and there might even be an interview process. Because of all these things, the whole application process might take a little longer, stretching closer to a month or even just over.
3. Broker’s Fee
This next point is probably the most important part because one, it deals with money, but it’s also a little confusing, and it has to do with the broker’s fee. So, I want to break it down into two scenarios:
First scenario is if you go with an agent that you’ve been working with, and they show you apartments that are listed as no fee, then you don’t pay a fee, and neither does the agent. The agent actually gets paid by the landlord, and it’s considered a business expense for them. The second scenario is if you’ve been working with an agent, and they show you apartments that are listed with a fee. In that case, you will be responsible for paying that fee. The amount of the fee can vary, but it’s typically anywhere from one month’s rent to 15% of the annual rent.
4. Letter of Employment
Another thing that you should prepare is a letter of employment. This letter is used as a proof of employment and should include information such as your job title, your annual income, and how long you’ve been with the company. It should be on company letterhead and signed by someone from the HR department or your supervisor.
5. Bank Statements
You will also need to provide bank statements. These are used to verify that you have sufficient funds to cover the rent. Typically, landlords will want to see at least three months’ worth of statements.
6. Tax Returns
You’ll need to provide your tax returns. Usually, you’ll need to provide two years’ worth of tax returns. These are used to verify your income.
If you don’t meet the income requirements, you may need a guarantor. This is someone who agrees to pay your rent if you fail to do so. Typically, guarantors need to live in the Tri-State area and make 80 times the monthly rent.
8. Credit Score
Your credit score is also a significant factor. A good credit score indicates to the landlord that you are a reliable tenant. If your credit score isn’t great, you may still be able to rent, but you might need a guarantor.
9. Renters Insurance
Renters insurance is often overlooked but it’s very important. It covers your personal property in case of damage or theft. Some landlords may even require it.
10. Finding Off-Market Properties
And finally, the secret tip that real estate agents don’t want you to know – how to find off-market properties. There are many ways to do this, but a good starting point is to connect with landlords and property managers directly. Check out websites like LinkedIn and start building relationships. You can also look for ‘For Rent by Owner’ listings on websites like Craigslist.