Qualifying for a Rental Apartment in Manhattan
New York City housing laws favor the tenant. It is therefore very difficult for a landlord to evict a tenant should he or she default on rent payment. Consequently, Manhattan landlords are very cautious about whom they allow into their buildings, and an applicant must usually go through a relatively elaborate qualification process before being approved for any given apartment. The two primary qualifying factors are income and credit.
Income
Manhattan landlords want to see that you can easily pay your rent and still are able to live a comfortable life in this drastically expensive city. Their rule of thumb, therefore, is that the applicant must demonstrate annual income of at least forty times the monthly rent. For example, if the rent is $3000/month (an average downtown apartment), a qualifying applicant would make at least $120,000 a year. After paying $36,000 in rent, the tenant is then left with $84,000 on which to live and take care of whatever debts he might have.
Credit
In Manhattan, nearly every landlord will require a full credit report to be submitted with the application, or the landlord will run the credit report at a cost ($50-$250), and he or she will usually not be sympathetic to the applicant with blemishes on that report. Delinquent accounts, past evictions, and criminal histories all spell bad news for one’s housing future in Manhattan, so the apartment hunter would be astute to clear any such issues before making the move.
A Way Around?
Naturally, humans are imperfect beings, and not everybody earns over forty times the monthly rent and has stellar credit scores, but nearly everyone who really wants to live in Manhattan does. How is this possible? Renters with insufficient income or imperfect credit have several recourses. First, and most common, is to find a guarantor. A guarantor is a person who guarantees the full execution of the lease, and on whom responsibility will fall if the leaseholder defaults on the lease. In Manhattan, a guarantor would normally be required to show annual earnings of at least eighty times the monthly rent, because the landlord wants to know, hypothetically, that the guarantor would be able to cover his or her own expenses in addition to those of the leaseholder. The guarantor must also have great credit, and he or she may often need to live within the Tri-State area (New York, Connecticut, and New Jersey).
Another common solution, acceptable to most landlords, is to give additional security deposit. Normally, a landlord requires a security deposit equal to one month’s rent, but in the case of questionable credit or income, two to six months’ security deposit may be required. This gives the landlord a buffer if the tenant defaults on his or her rent, and time to evict that tenant without losing rent.
Third, and less common, is the option to pay the year in advance. This solution serves international applicants, who have great income but no credit history, and students with out-of-state or international guarantors.
Lastly, a new company called Insurent has recently surfaced as a corporate guarantor of leases. They do charge a nominal premium and have qualification requirements.
Documentation
Because apartments are in high demand in New York City, they rent quickly, and it is wise to arrive with all of the necessary documentation in hand. Usually, landlords will require bank statements, tax returns, W-2’s, letters of employment, and photo ID’s. Co-op’s and Condominiums often have more arduous lease application processes, including reference letters and interviews.
Jake Nicholson
| Vice PresidentCharles Rutenberg Realty
M: 917.280.
4546Skype: jake.nicholson
Posted via email from jakenicholson's posterous
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