How to Get an Apartment For Rent With Competition in New York
In New York, competition pervades every aspect of life, from jobs to parking spots, doctor's appointments to train seats. If you've ever been in a situation where every apartment you wanted was snatched from under you, you're not alone.
While the tide has been turning to favor renters in recent years, the dog-eat-dog nature of the city has not changed. It is all too common in the five boroughs for desirable apartments to be snatched up at lightning speed. But taking a few proactive steps can help raise the odds of landing the apartment of your dreams.
Understand the Rental Process
Above all things, the more you understand the rental process in New York and prepare accordingly, the better your chances of landing the apartment you want, even in the face of stiff competition.
The first thing you need to know is what the landlord or management companies are looking for.
You’ll need to earn a minimum of 40 times the monthly rent in an annual income, combined with anyone else occupying the apartment.
If your income isn't high, learn about how you can get an apartment despite the fact.
The applicant will also need to have fair to good credit (if not excellent).
An occupant with excellent credit may balance out a co-applicant with weaker credit (as long as the score is not abysmal).
However, if there are any open collections or a significant amount of debt, this may jeopardize your qualification.
Make sure each applicant’s financials are in order. The process should usually start with a one month deposit. Some brokerages may only ask for $1,000.
If the brokerage has an exclusive on the apartment or if you’re dealing directly with the landlord, the deposit may hold the home for you for a couple of days.
However, it certainly doesn’t guarantee the apartment, so make sure you follow through with the application and handing in all of the paperwork in a timely manner.
If you're moving with roommates, read our ultimate guide on room shares to be sure you are absolutely prepared.
Know Where Your Credit Score Stands
Don't wait until the application process to actually pull up your credit report. It's critical that you know what will appear on our credit history before a landlord sees it.
Even if you have been faithfully paying your creditors on time, errors do happen and will bring down your score. You'll need to ascertain that these are all corrected before you start any house hunting.
Likewise, make sure your spouse, partner, or roommates are fully aware of where they stand as well as all of their information will affect your ability to be approved.
If you currently have less than excellent credit, read up on how you can improve and prop up your score.
You can go to third party sites like Credit Karma or Credit Sesame to pull up a ballpark score and your report.
However, you can pull up your complete credit report for free by going to Annualcreditreport.com. By federal law, you are allowed one free report per year.
Prepare Your Paperwork
The fastest way to get approved is to have everything ready to go (granted you meet the desired financial criteria).
You will need copies of your most recent pay stubs, bank statements, and tax returns (or tax documents like W-2’s or 1099’s that show your earnings).
Your most recent pay stubs will show the landlord your current earnings.
Your bank statements will show that you have a bank account, can keep a balance, and may demonstrate any additional earnings or income you may receive on a monthly basis.
If you’ve had consistent employment and earnings for the past few years, the previous tax returns will show this income and establish that you are consistently employed and making an income.
Getting letters from your landlord and employer are recommended.
A letter from your landlord is not necessary, but it may help you appear in a good light if your current landlord confirms that you have never been late on your rent and you were a great tenant.
It is advisable that you get a current letter or document of employment that shows not only your position and start date but also your current wages or salary.
In most instances, you will not need to pull up a credit report to hand to the broker or landlord.
The vast majority of brokerages, management companies, and landlords pull up their complete credit history for applicants from their preferred third party report vendor.
Be prepared to provide any additional record of earning or assets should the landlord require more information.
You should keep these as a digital file(s), so you can email them right away or print them if they are still working with paper.
Being ultra prepared can only serve to reflect upon you as an applicant in a positive light.
Many people, when looking for an apartment, forget to calculate the deposit as well as any additional upfront move-in costs.
It’s a good idea to save a few months of rent before your search so you can claim your dream place.
By NYC law, landlords can only require up to one month's deposit and the first month's rent due at lease signing.
If your financial credentials are lacking, you may be asked to show savings or liquid assets to supplement your lack of income. These savings should show that you have enough to cover your rent for the duration of your lease if you don't make enough.
Another reason to save additional months is to be able to pay a broker’s fee. In this day and age, everyone thinks they can find the perfect apartment for no fee. In New York City’s market, a broker’s fee is still very common, especially in the most desirable neighborhoods. This also goes for most low-cost apartments.
Even if you are turned off by the idea of paying a broker’s fee, it could mean the difference between getting your dream apartment and losing it to another applicant who is willing to foot the bill.
Many brokers only charge one month's worth of rent, but you should save at least two months of rent for the broker’s fee. You must be prepared to pay a 15% fee (the New York City standard broker’s fee).
It's Rental Season!
Knowing and understanding the rental market cycles will also help you navigate through competition.
The low season is generally from October to March with activity picking up through April and May.
Peak season will generally start in mid to late May and reach its apex in August.November and December are usually fairly dead months with little activity.
This is the point when you will receive the least competition and perhaps when landlords will be more willing to negotiate, especially if a unit has been on the market for some time.
That’s not to say that there aren’t still units that people are vying for more than others. Generally, the lowest cost units will still garner more attention and competition.
Your fiercest competition will undoubtedly be during the peak season.
More likely than not, if you hesitate on putting in an application or a deposit for an apartment you want, it will disappear the same day, so have the funds ready to put down along with your paperwork.
Be Ready to Make an Offer
If you find yourself in a head-to-head with a competing applicant, you do have tricks up your sleeve to seal the deal.
Hopefully, you have good credit, good earnings and all of your paperwork is in order as well as a deposit money.
If you receive word that the landlord is looking at a competing application, don’t despair.
Even if the other applicant has a stronger profile, you can still make an offer.
This is definitely not the time to negotiate for a lower monthly rent, but to offer more. A landlord will find it hard to refuse the promise of more money.
Offer what is within reach for you.
If you can afford to pay $50-$100 more per month, then let the landlord know just that.
You may hear that the other applicant has come back with their offer, but don’t offer $200 if you really can’t afford to do so.
You can try offering an additional deposit and see if it takes you anywhere.
If the prospective lease start date is some time in December-April, another idea is to ask if you can sign a lease for 13-15 months instead of the standard 12.
Many landlords will find this attractive because it will bring the lease start date for the next renter closer to the peak season, which is when it’s ideal to have your unit on the market.
Have a Backup Plan
You’ll have to face the fact that it is possible you may lose out in a fierce bidding war.
It’s highly recommended that you have at least two other choices in mind, being wary of the fact that those might also be very desirable units.
You might be able to leave deposits on another unit simultaneously as they are usually 100% refundable before the application is submitted, but be careful to only apply for apartments one at a time as necessary.
You also don’t want your credit pulled up multiple times unnecessarily.
If you lose out on all your choices, make sure you keep your broker(s) on high alert so they can contact you as soon as something comparable comes to market.
If you get word of a seemingly excellent apartment, make the time as soon as possible to go and view it.
Most rental brokers will be willing to work with your schedule.
If the unit is being shown by open house only, be sure you arrive early to the open house so you can be the first one to view it and put down a deposit right away.
If you think you’re going to need extra time to secure the perfect apartment, ask your current landlord if you can go on a month-to-month basis with the lease after it expires.
This will give you the flexibility and luxury of time to find the right place. This might even position you during the low season, which might eliminate your competition.
Let an Agent or Broker Work for You
While it may be tempting to bypass any use for a real estate agent or broker, especially when it comes to paying a fee, you may be making a big mistake.
It's a popular misconception that real estate agents are only interested in taking your money but don't provide any real value or services.
If that were true then every landlord would be doing a bang-up job advertising their apartments, nor would sellers ever contract realtors to sell their homes for them.
The reality is that units that are marketed by real estate professionals are far more likely to get rented or sold, period, and spend fewer days on the market.
Likewise, as a renter working with a rental agent can actually be a bit like having an attorney representing you in court.
An experienced realtor will work hard to vouch for you, compete and fight for you to get the apartment.
A good real estate broker will know exactly how to present your financials, have an arsenal of negotiation tactics, and build a rapport with the listing agent or landlord to make sure their client wins.
He or she will also be able to properly advise you on the value of different apartments in the neighborhood or across a number of neighborhoods.
They'll also do the groundwork of putting together a list of apartments that may fit your criteria and schedule all the appointments, while you are busy at work or enjoying a night out with friends.
It may be well worth at least a month's rent to receive these full real estate services.
Here are some tips for finding a good agent:
- Look for a reputable brokerage or a local brokerage that has a lot of listings in the area.
- Make sure the agent has closed on listings in the area.
- Find out how long the agent has been in real estate in New York.
- Get recommendations from friends
- Read reviews
- If you have a good impression of a listing agent, they can also work as your rental agent.
If you're absolutely adamant on being a pure DIYer on renting, read up on everything you need to know about being your own rental expert.
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