How Self-Employed Freelancers Can Get Approved for a Rental Apartment in NYC

If you are part of the thriving self-employed workforce, you might find it easy to rent a desk at stylish co-working spaces. However, securing a living area in that neighborhood could be far more challenging.

Landlords may be hesitant due to the unpredictable nature of your income. After all, they typically prefer a straightforward employment letter as proof of financial stability. Moreover, the entrepreneurial aspect of your work might involve credit card debt and loans, which could negatively impact your credit score. As we'll see, this is a crucial factor when renting an apartment in Gotham.

But don't lose hope or start contemplating overnight stays at your co-working cubicle. We're here to guide you through preparing for your apartment search and offer strategies to enhance your chances of securing your dream home in Gotham.

What Freelancers Can Do to Get Approved For an Apartment

• Knowing your credit and having the necessary income documentation together will help you get the apartment you want.
• Unlike employed renters, freelancers must provide extra paperwork to prove they can consistently make an income that qualifies.
• If you're having difficulty getting qualified, you should try to work with a smaller landlord who may understand your situation better.
• In the end, finding a guarantor may be critical for you to get approved for an apartment as a freelancer.

Know Your Credit Report

Your credit score is the first thing any landlord will look at in judging your candidacy. If your credit score is below 650, you’ll have a tough time renting an apartment in NYC without a guarantor.

So, before you even think about looking for places, check your credit score. If you don't know your credit score, you can receive a free credit score each year from any of the three major reporting bureaus - TransUnion, Equifax, or Experian.

Your credit report tells the landlord if you are someone who pays their bills on time.

If your credit score shows a history of late or lack of payments, it tells the landlord that you aren't likely to pay the rent on time for the duration of the lease.

As a freelancer, you should have a credit score of at least 680 to offset any other elements of your financials that a landlord may see as red flags (inconsistent income, loans, etc.).

If the loss of a job has damaged your report, a divorce, or a move, a good agent should be able to explain the situation and negotiate with the landlord in your favor.

If your credit report is less than ideal, there are ways to improve your credit score.

Prepare Your Paperwork

In addition to your credit report, getting approved also hinges on the power of your paperwork.

Before you begin reaching out to agents, you will have to take some time to prepare all the paperwork required to apply for an apartment in NYC.

As a freelancer, you’ll need the standard paperwork required of any applicant and any additional paperwork that will make the case to a prospective landlord that you’ll pay your rent on time for the full duration of the lease.

In terms of standard paperwork, these are the basics:

• Two years of tax returns
• Three months of bank statements
• The last two pay stubs
• Copy of your photo ID

Since you probably won’t have paystubs as a freelancer, you should also have the following:

• An official letter from your accountant outlining your projected income for the year
• At least two letters of recommendation from clients attesting to your integrity and the merit of your business.
• All client invoices from the past two years

What about 1099s?

Well, landlords will look primarily at the first pages of your tax returns.

The income stated there is often lower than indicated on your 1099’s because of the many deductions taken by freelancers.

When assessing the first two pages of your returns, landlords can only verify your income after deductions.

Since the difference between your total revenue and income may be significant, most landlords aren’t going to factor your 1099 income into their evaluation.

Types Of Apartments that Won’t Be Freelancer Friendly

Condos and Co-ops

Individual owners of condos or co-ops renting out their properties will generally be very strict regarding the approval process.

Understandably, a tenant who does not pay rent on time could affect the owner's financials.

Regarding a co-op, even applicants with superlative financials have to pass an excruciatingly detailed board approval process.

Unless you’re a freelancer making high five or six figures year after year, with superlative credit, it’s highly unlikely your co-op application won’t be approved.

Large Doorman Buildings

Management companies run these buildings with very strict guidelines.

You will likely not get approved if your financials fall outside those guidelines.

Getting Approved

Getting approved as a freelancer can and does happen all the time. Here are some things you can do to help your cause.

Find the Right Agent

Anybody who's ever rented in NYC will tell you about the cutthroat world of the NYC real estate agent.

There are over 10,000 agents in NYC, and many of them will promise you the apartment of your dreams.

Take the time to thoroughly vet these agents to find the best one to meet your unique needs as a freelancer.

Ask agents if they have successfully had freelancing clients approved.

It would be best to have an agent with strong relationships with landlords. Such an agent will know which landlords are more flexible.

A good agent will also know how to negotiate for you.

Some of the finer points of negotiating approval might include the following:

• Offering to pay an additional security deposit
• Offering to pay additional rent upfront
• Using a guarantor

Focus On The Right Buildings

Like their apartments, landlords differ significantly. Some landlords are more flexible than others.

You will want to focus on buildings owned by small landlords with no more than 20 buildings. These smaller, often family-run operations can be more lenient in the approval process.

New Rent Laws Make It Harder for Freelancers to Get an Apartment

Back in the day, if you had the money, you could theoretically offer to pay a year's rent upfront (albeit many landlords wouldn't accept this).

Before the new rent laws were passed in NYC, you could also offer to pay a larger security deposit to persuade a landlord who might be on the fence about your credentials.

However, to scale back predatory behavior by many landlords, they are now barred from asking any renter to pay more than one month's worth of security deposit and one month's rent and from charging more than $20 for a credit check or application fee.

These laws protect renters but limit one's options for convincing a landlord to approve them.

Use a Guarantor If You Don't Qualify

You should have a guarantor lined up if your credit score or paperwork is lacking.

The guarantor will be legally bound to "guarantee" your lease.

Your guarantor will be responsible for paying your rent should you fall behind or cannot fulfill the payments for the duration of the lease.

A guarantor is most often a parent or family member but can be anyone in your network who meets the appropriate criteria and is willing to take on the role's responsibilities.

Your guarantor must:

• Make 80's the monthly rent
• In the vast majority of cases, live in the state of New York (although more landlords are accepting out-of-state guarantors, this is the exception, not the rule)
• Have excellent credit, typically a score of 750 or above
• Provide the same set of paperwork as you (including paying the application fee)
• Sign the lease. Remember, they are ultimately accountable for payments made on time for the lease period.

Asking someone to be your guarantor is a big ask. But as a freelancer, having a strong guarantor can make the difference between getting approved or not.

Third-Party Guarantor Services

If you do not have someone in your network who can act as your guarantor, third-party services such as Insurent or The Guarantors, Jetty, and Rhino exist.

For a charge of 5-10% of the total annual rent, these services issue an insurance bond to the landlord, which will cover all of their expenses if you cannot fulfill the lease terms.

Guarantors still have their approval policies, but they are fantastic options for freelancers looking to overcome the ultra-strict barriers to renting imposed by most NYC landlords.

Look to Rent in the Off-Peak Season

The winter is the slow season for the rental market in NYC. Unlike the summer or fall when the market is flooded with renters, landlords are often more willing to be less strict in the approval process during the slow winter months.

So, if you're a freelancer looking to rent in NYC, you have options.

You'll have more challenges than the typical renter, but if you use the above tips, your chances of finding your new home in the Big Apple aren't out of reach.