Do You Need a NYC Rental Apt and Not Sure Where to Begin?

Don’t worry because you’re not alone. This overview is designed to help you get started and empower you to make the best decisions for yourself in the expensive and competitive New York City rental market. Most importantly, plan ahead (get your documents ready for your rental application) and seek the guidance of a local expert.

Buildings: What are my options?

NYC rentals are most commonly available in 3 different types of buildings:

Rental Building

A rental building is typically owned by a single entity (landlord) and managed by them as a full-time business. The pros of renting from this type of building are that leases can be renewed regularly, unlike with coops, where there are imposed term limits of typically 2-3 years. Similarly, condo rentals are subject to the owner selling the unit that you are renting. The negative is that the whole building is filled with renters, not shareholders or owners. As a result, these buildings tend not to be as well cared for as coops or condos, where property owners also live in the building with a vested interest in keeping the common areas well cared for.

Condo Building

The application process is similar to that of a rental. However, if the seller wants to sell the property while living there, you must allow access as stipulated in your rental lease. There is a broad spectrum of different-style condos; some have many amenities within the building and many owner-occupied units. At the same time, other condos have an environment a bit more like a rental building. The good news is that there are no term limits like a coop. However, the owner can sell and not renew your lease.

Co-op Building

Typically coops only permit renters for 2-3 years maximum a time. The coop application process is more formal than that of a rental building or condo and may require a personal interview and the application itself. Also, if the seller wants to sell the property while you live there, you must allow access and react to the owner’s needs. On the plus side, you will live in a primarily owner-occupied building and become a part of that particular community.

How much lead time do I need?

Rental Buildings

For rental buildings, 4-6 weeks is sufficient because it’s a very well-oiled formula. Condos and Coops – 6-8 weeks because the vetting process is more involved, and the freight elevators used for moves require scheduling in advance. The rental market in NYC is traditionally competitive, especially when you are searching at the same time of year when students are – typically in June, July, and August. Better deals can be found outside of that time window.

RENTAL OVERVIEW – NYC 2023

Qualifications

• A renter is expected to document earnings of 40x monthly rent
• A guarantor is expected to document earnings of 90x monthly rent

What fixed costs should I anticipate?

1. Application Fee $20. As of 2019, this is the maximum fee permitted by law to run credit/ background checks. If you can, supply your recent credit check. (within recent 30 days), this fee may be waived.
2. First-month rent (one month)
3. Security Deposit (one month), to be held in escrow and returned upon moving out.
4. Agent Commission – Ranges from one month to 15% of annual rent, depending on the deal. Note that this will be disclosed in the listing information.
5. Note a certified check, money order, or online credit card payment—no Personal checks.
6. After your application is approved, the landlord will expect you to sign the lease and deliver the certified checks within a short time (e.g., 48 hours).

Do yourself a favor and prepare your documents before shopping because you may need to say “yes” on the spot.

Your required supporting documents will include the following:

• Last two pay stubs
• Photo ID
• Last three months of bank statements (you can redact all but the last four digits of account numbers)
• Previous two years of tax returns (redact all except the last four digits of your ss#)
• Letter of employment on employer letterhead stating job title, length of employment, salary, and expected bonus; or, if self-employed, a letter from your CPA
• Proof of other funds (e.g., stocks, bonds, etc.)
• A previous landlord reference letter, if applicable, and contact information for prior landlords
• Personal or business reference letters (sometimes required by co-ops and a bonus if you apply for a rental)
• Most of the above are needed from your guarantor if you use one.

Things to Look for in your lease

• Does your lease have an option to renew? If so, how far in advance do you have to claim your option to renew? How will rent increases be figured—by a fixed dollar amount, a percentage of the first year’s rent, or cost of living increases?
• Are any utilities included in the rent?
• Are pets allowed?
• Is there a restriction on the number of air conditioning units you may have?
• Is the use of outdoor space mentioned explicitly in the lease? If not, you won’t be titled to a rent abatement if the space becomes unusable for any reason.
• What is the sublet policy?
• What does the lease say about the landlord’s right to show the apartment to tenants— how many days before the end of the lease can the landlord start showing it? Are there any restrictions on time or days of the week, who will be allowed to access and show the apartment, and whether you’ll have to make the apartment available for an open house.
• If you are getting a free month or two of rent as a rental concession, is the free month at the beginning or end of your lease?
• What happens if you need to break your lease?
• Do you know the gross rent amount (the amount you’ll need to pay each month)?

Author
Jillian Maslow
Licensed Associate Broker
ELIKA Real Estate