How to Find an Apartment in New York City Without a Broker
Looking for apartments for rent directly by the owner might be a difficult prospect in a city like New York where the real estate industry is cut-throat in the realms of both agents and tenants. Arming yourself with knowledge can give you an edge over everyone else and make the rental process go smoother than expected.
Put Your Financial Information in Order
In order to start the process, you'll need to assess where you stand and how much you can afford. Landlords and management companies will be looking at your credit report and your past and current earning statements and documents. Most of them are looking for a minimum of about 650-680 in credit (be aware that some landlords only want above 700) and an annual income that equals to about 40 times the monthly rent (i.e. Monthly rent = $3,000, annual income =$120,000).
This means if you earn $75,000, you probably shouldn't be looking at listings that are going for $2,700. You'll need to stick to a rent price of $1,900 to be the very top of your budget, although your actual ceiling is $1,875. Sometimes there is a little wiggle room. If you know you have a lot of bills to pay, such as large loans or numerous credit cards, you might want to budget for an apartment that falls below the 40 times metric to give yourself a cushion to pay your bills responsibly.
What are Landlords Checking
|Credit Score||A hard pull is required for each applicant.|
|Income||Bank statements, pay stubs, and tax returns should be submitted.|
|Criminal Record||Some landlords will do a criminal background check.|
|Evictions||Eviction hits are also pulled up by the background/credit check.|
|Employment Verification||Usually a letter from your employer will be requested.|
|Pets||Pets must be disclosed on the application. A pet fee/deposit may apply.|
Understanding Your Credit
Any potential lender is going to look at your credit score and report in order to ascertain your risk as a borrower. For New York City landlords, it's the same. Not only will your score reveal your credibility as a potential tenant, but your history could also give clues as to how you manage your accounts and if you might potentially go into a large debt in the future.
Many people have a less than a perfect score purely due to the fact that they have a large debt from their student loans. This is usually something most landlords can overlook, and won't affect your standing too much if they see all your other accounts are in good standing and that you've never missed a payment.
Something to watch out for is very high credit limits. Even if your balances are less than 30%, a scrutinizing landlord might notice you have very high limits, which can make him or her nervous. This is because it shows the amount of potential debt you could go into (it doesn't mean you will), which in turn could affect your ability to pay the rent.
This is why pulling up your credit report is important. You'll know exactly what will be reported during the application process and be ready with any explanation or supporting documentation, if necessary. It also gives you a chance to correct any errors beforehand.
Saving Up for Your Move
You should have a minimum of two months saved up for your move if you are in good financial standing for your budget--one month for a security deposit and another month for your first month of rent due at lease signing. While most apartments require one month of security, it's not unusual to find apartments that require two months of security or first and last month's rent due at least signing.
If your credit score is less than par or you don't quite make enough, you may be required to provide extra securities or extra months upfront. Saving up six months of rent or more may put you in a more secure position if that is the case. We recommend saving up an additional month, so you have any extra spending cash for your move for things such as movers, furniture, renters insurance, or any household fixtures.
Have Your Paperwork Handy
The more prepared you are with your paperwork, the faster the application process will be. This can also help you beat out stiff competition. Here are some things you might have ready to either hand over or email:
- Copy of official photo ID
- Last 2-3 bank statements
- Last 2-3 pay stubs or pay statements
- A letter of employment (preferably on letterhead) stating your position, start date and salary. A signed employment contract with (current) salary information may also suffice.
- Tax return (1040) or tax documents (W-2, 1099 or official written statement from a CPA) from the last year or two.
While there may be some variation, these are more or less the documentation that any management companies or landlord will request to see. We highly recommend that you have this information online or scanned into your computer. Some management companies do everything online, so it'll be handy to have everything already digitized.
The photo ID is proof of who you are. The bank statements show your ability to keep a balance and show your solvency throughout the month. The pay stubs are corroborative of your claimed employment and salary. The letter of employment is proof of your current employment and salary. And the tax return shows your past earnings and ability to support yourself over time.
Many smaller landlords either won’t have a lot of time or know-how on marketing techniques, so their listings may be harder to find on the sites you might frequent. Remember that you can still find an apartment without a broker's fee even if a broker is advertising the apartment. Be sure to ask them if there is a fee.
Looking in most desirable neighborhoods might mean that a broker's fee is unavoidable. Most of these landlords, even the smaller ones don't advertise themselves and certainly are not willing to pay the fee. They already have applicants anxiously competing for their apartments.
Craigslist is an easy source to consult for apartments by owner. However, a user must always be cautious of scams on Craigslist. So while it’s easy, there’s definitely a caveat. You can encounter false listings, con-artists, phishing scams, etc. There are other sites that claim they have thousands of listings by owner. While this may be true, you will be charged a fee for subscription. It may be cheaper in the long run than paying a broker’s fee, but just keep in mind that it isn’t free and you aren’t guaranteed to find a lot of choices.
This doesn't mean to start looking months ahead online. Searching early is actually a futile activity. However, do scout out neighborhoods you like best. If there are buildings you like, you can always make a note of the address and see if you can look up the management company or landlord. If you manage to contact them, give them your details and ask them to keep you posted on if there are vacancies in the next months or whenever you need to move.
Understanding the rental seasons can also help you land a great place. The slower months tend to start in October and continue to March. As the weather starts warming up, the inventory and competition start to ramp up as well. Look for more activity in April and May, with the market going to high gear in June, peaking August. Inventory normally floods the market during these months, but do not sit around because they do not stay on the market.
Going by Foot
This is not a method that is recommended for Manhattan as signs in windows are rare. Unless there is a particular building you have been eyeing, skip the walking. This approach, however, might be ideal for certain neighborhoods in the other four boroughs. Just be sure to plan your day accordingly, as places like Queens, Brooklyn, the Bronx and Staten Island are massive. Hop on a bike and you’ll be good to go. Visit local coffee shops, community centers, and businesses where people tend to gather. You’ll find physical postings. Talk to people in the neighborhood.
Your best bet in finding apartments directly for rent by owner would be through management companies. Unfortunately, it may be hard to find a comprehensive list of all the property managers in a given area, and that leaves a lot of work, contacting each company (there are hundreds if not thousands) and asking about their availabilities. However, this will result in a no-fee apartment and you can negotiate directly with the property management company. Many of the larger companies have staff that can advertise on major listing sites and put out the word to most brokerages, so you’re more likely to see their listings.
You’re basically not going to find very many options in the City if you’re thinking more in the way of a smaller landlord. Almost all of the offerings for an apartment by owner is going to be a luxury development, more often than not, in the form of a high-rise. Luckily, if you are ready to pay top dollar for rent, the options are plentiful in almost any neighborhood you choose.
If you are seeking something different, it’s best to research cooperative buildings in Manhattan. Quite a few shareholders rent out their apartments, meaning most co-op buildings have rentals available. Doorman buildings are also great to target. The doorman may be able to tell you if there are vacancies and give you contact information to the management companies. Other areas to look into are Stuyvesant Town and the Washington Heights/Inwood neighborhoods.
In the end, renting through a broker might have to happen anyway because Manhattan is a real estate free-for-all. Almost all listings in the City are what are considered "open" listings, which means that any agent can partake in advertising and showing the apartments. This sometimes means that fifty or more agents are competing to show the same unit!
The Outer Boroughs
The other four boroughs of New York City have so much to offer especially in its differentiation from Manhattan. Each neighborhood and borough has a distinctive character. Much of Queens, the Bronx, Brooklyn, and Staten Island are also dominated by larger management companies and landlords, but unlike most of Manhattan, you still can find a fairly decent number of smaller landlords who just own a handful of properties or are letting an apartment or two in their multi-family house.
If you’d like to reach these property owners, then it’s best to talk to locals at neighborhood establishments or go through the classifieds of a local paper. You can access some of these online as well. Mass transit is spottier in the outer boroughs so it’s recommended that you take a bike, drive or plan your foot journey well.
Let a Broker Work for You
Many listing sites these days will offer units labeled as “rent by owner”, but the reality is that the majority of listings are still dominated by realtors and brokers. You’ll find no-fee listings more often than not with brokerages that are working with larger property holders and landlords. The smaller mom-and-pop type owners may be more reluctant to dish out the cash for an agent and may prefer that they collect their commission from the tenant, even if the agent is creating what is essentially “free” advertising for them.
If a unit you are interested in has been sitting on the market for some time, that may give an incentive to the landlord to pay the broker’s fee in order to get it rented out. So, always ask your agent or broker if the landlord would be open to paying the fee or even a part of it. Not every landlord will be open, but some will, and you may end up with a no-fee apartment or paying a low fee.
Remember, you can always use their agent or broker to do the research for you as well as negotiate on your behalf; not only the broker’s fee but also negotiating rent, lease term, and other incentives. Also, if your broker is one that stays on top of it, they can let you know if a new apartment has just come to market or about to, giving you the first notice on the apartment. A good agent will listen to what you want and be able to find a few listings that might match up exactly or closely. A good agent will also be able to manage your expectations about the market.