Despite taking a massive hit from the pandemic early on, New York City is still an attractive destination for both new arrivals and established New Yorkers. Smart leadership from Governor Andrew Cuomo and collective community action is mostly to thank for this. In the past few weeks, we’ve seen the infection curve flatten, and the first hopeful signs that the summer real estate market is returning with vigor. Compared to many other parts of the U.S., New York’s infection rate is now one of the lowest, and the initial departure has opened up a record number of apartments available for rent this summer.
But if you are new to the city or still not sure about taking the plunge, we’ve outlined a guide here to help you make a move to New York City and find your pad. Whether you’re looking for a rental or forever home, we’ll be covering all the basics here to get you started on your apartment search.
Table of Contents
- Get to Know the City that never Sleeps.
- Learn the Real Estate Lingo and What to Ask about
- Understand that it’s Not Always About Money
- Have all Your Documents Ready to Go
- Be Aware of Carrying Costs
- Not All Rentals are in Rental Buildings
- Cash is King Here
- Your Housing Options will be more Limited if You Have a Dog.
Get to Know the City that never Sleeps.Get to Know the City that never Sleeps.
How well do you know New York City? If your answer is something along the lines of “I’ve seen it on T.V. a few times,” or “Brooklyn is a neighborhood, right?” then you should probably do a little more research. Learn what you can from the internet or reading a few books, but the only real way to get a feel for the city and its neighborhoods is to see them for yourself. An easy way to do this is by finding a short-term rental and doing some exploring to see what neighborhoods you like best.
Almost every neighborhood in the city has its character and style, which will appeal to different people. Until you’ve walked their streets, sampled their restaurants (with social distancing, of course), and talked with their residents, you really won’t know what’s right for you. Besides, it’s also a great way to learn how the public transport system works.
Learn the Real Estate Lingo and What to Ask aboutLearn the Real Estate Lingo and What to Ask about
If you’ve never gone home hunting before, then it helps to familiarize yourself when some of the real estate terms you’ll soon be hearing. Some of these terms like “mansion tax” and “classic 6” are unique to New York, so even if you know your real estate lingo, it’s still worth a look. Another thing to familiarize yourself with is the buying-selling process, or if you’re looking for a long-term rental, how leases work in New York City. State laws on buying and selling real estate are a little different here from other states, so be sure you understand all these differences before you jump into the market.
Depending on your housing needs, you’ll also want to know what to ask about when viewing apartments and talking with your buyer’s agent. If you have kids, then school zones will be an important factor (and a long topic in itself to study!). What about dining options? Due to the pandemic, many of the city’s restaurants are shut or offering take-away only. Do a little research on what’s available nearby and what a building’s policy is on deliveries. The recent popularity of grocery delivery has led to some buildings refusing to accept them, so be sure to ask about this beforehand.
The point is, you’ll want to have a clear understanding of your needs and wants before you start your search. Get a piece of paper and start making a list of what is most important to you in a home. It’s very unlikely you’ll find a home that fits all these requirements, but that’s ok. The important thing is that they’ll act as a guide to helping you trim down your list of potential apartments. It’ll also make your real estate broker’s job a lot easier if you choose to hire one.
Understand that it’s Not Always About MoneyUnderstand that it’s Not Always About Money
Yes, it is most of the time, but not always. Even the wealthiest buyers still have an extra hoop to jump through if they’re buying in a co-op building. This is the dreaded co-op board application, which involves a thorough examination of all your finances and past work history, as well as an interview to determine if you’re the right fit for the building. We promise it’s not nearly as scary as many people make it out to be. But you do still need to be prepared and look your best. One fortunate side-effect of the pandemic is that it’s led to more and more co-op boards doing the interview remotely. It is much more convenient and takes some of the concern off, the frequent in-person meetings. Just be sure you still consider it as seriously as you would an in-person job interview.
Renters will have a different sort of hurdle to overcome, the income threshold. Most New York landlords require that a tenant earn a salary of 40 to 50 times the monthly rent. Explains why a lot of renters choose to share the apartment with someone else, as the income threshold considers the combined annual income of everyone in the household. If that seems way out of your reach, then you have an alternative, getting a guarantor. This is someone who promises to pay the balance of your lease if you default and is usually a family member. To be a guarantor, they have to earn 80-100 times the monthly rent and live in the tri-state area.
If that’s also out of your reach, then you have one final alternative, paying for a guarantor. This is a local company that can act as your guarantor in exchange for a monthly fee. Shop around to see what kind of quotes you can get from these companies. Having a great credit score will help you in this regard.
Have all Your Documents Ready to GoHave all Your Documents Ready to Go
Whether you’re buying or renting, vacant apartments here have a habit of disappearing fast if you’re not quick enough to make a deal. The pandemic may have slowed things down a bit, but if you’re hunting for a deal, then you need to have everything ready to go once you find it. Means having all your documents and paperwork in order and with you every time you tour an apartment. These documents include:
- Photo ID, a driver’s license or passport will usually do.
- Letter of employment on company letterhead. Make sure it has your salary and start date written on it. University students should bring their letter of acceptance.
- Copies of your most recent pay stubs and bank statements, usually going back three months is enough.
- A reference letter from your last landlord (make sure it’s a good one!)
- At least two years’ worth of tax returns
Be Aware of Carrying CostsBe Aware of Carrying Costs
When determining your budget, be aware that there might be carrying costs that you’ll be responsible for every month. For co-op purchases, these are called maintenance fees. A charge that every resident in a co-op building (including the board members) must pay into a common fund. This way, the building can cover the cost of maintaining the building and its common areas. Additionally, there’s usually also a quarterly or annual assessment that goes towards covering the costs of any unexpected repairs. Make sure to read your board package carefully, so you understand what these charges are, what they cover, and what they don’t cover.
Condo owners are also subject to carrying costs, in this case, called common charges. They function the same as maintenance charges in that they help cover the upkeep of the building and its common areas. Fortunately, the cost of these charges is usually a lot less than what’ll see in co-ops. Some new developments will even have their common charges set at an extremely low rate for a set number of years. This is part of a government-funded tax abatement program to create more affordable housing. Just be sure you read the fine print carefully or talk with an attorney so you know what you’re getting into.
Not All Rentals are in Rental BuildingsNot All Rentals are in Rental Buildings
Renters will largely have two options when it comes to choosing where to rent. They can either choose an apartment in a standard rental building or find a rental in a co-op or condo building. The later options tend to be much nicer in terms of amenities and building design. But this can come with red-tape, especially in the case of co-op apartments. Such is because you’re renting from someone who bought the apartment and is now choosing to sublet it. Different buildings will have their policies on how they handle this, and they usually include high application fees and onerous restrictions on how long you can rent.
Make sure you have a firm understanding of the pros and cons of renting from a nonrental building before you make a deal.
Cash is King HereCash is King Here
Nothing entirely speaks like cold hard cash when making a deal, and in New York City, you’ll need a lot of it. While financing is still readily available, many lenders have tightened their requirements since the pandemic began. An uncertain mortgage signoff can cast a dark shadow over any deal, so be sure you get everything going for you. Ideally, you’ll want to make an all-cash offer if you can. Nothing will get a deal moving quite like this. If that’s not feasible and you need financing, then at least try to make a 20% down payment. You’ll also want to ensure you have a stellar credit score so you can guarantee yourself a great interest-rate.
Renters will also need a hefty dose of cash available on hand, preferably in the form of a bank certified check. For instance, you’ll need to pay the brokers fee if there is one, a month’s rent as a security deposit, and the first month’s rent within a few days of signing your lease. You can try and cut down on these costs by finding a roommate to share these costs.
Your Housing Options will be more Limited if You Have a Dog.Your Housing Options will be more Limited if You Have a Dog.
Anyone with a pet dog, especially a big one, maybe in for a tough time finding a place for both you and your four-legged friend. Many New York City buildings have strict no-dog policies, with some banning all pets outright. Be sure to read the listing carefully and ask about this when viewing an apartment. Even if dogs or other pets are allowed, there may be a screening process whereby the landlord will want to meet your dog to see how they behave. Keep in mind as well that New York City has strict laws on keeping your dog on a leash whenever you’re in a park.