The rental housing market in New York City is infamous, with a bounty of movie-perfect apartments counterbalanced by a renting process that can be miserable and frustrating for even the savviest New Yorker.
Having built a subletting business that eventually evolved into Bedly, my co-founder and I have grabbed over 100 leases in NYC and have become (all too) familiar with the process of finding traditional leases all over Manhattan, Brooklyn, & Queens. We wish someone laid it all out for us when we first got started, so hopefully this overview can help save you time and energy if you’re considering a lease in NYC.
Here it goes:
1 – You’ll (Almost) Definitely Need a Broker
There was a time when the rental market operated on whispered rumors and tips between friends, but these days you’ll be lucky to find a vacant apartment online that isn’t being handled by a brokerage.
A typical broker fee in NYC is 15% of the cost of the full year term of the lease. For example, if you leased a one-bedroom apartment for $3,400/month you would generally need to throw down $6,120 as a broker fee (this is 15% of the $40,800 total cost for 12 months renting at $3,400). That’s some serious dough!
In our experience, you can usually negotiate this fee down a few percentage points if you are persistent, however 12% seems to be the floor for many brokers. Listings with higher demand tend to be more difficult to negotiate on because the broker may have multiple clients who are interested in the same space.
In the best case, your brokers will have their own stockpile of exclusive landlord listings that other brokers aren’t competing and showing to other clients. Brokers with exclusive listings are able to show listings that aren’t publically listed, so they can only be found through a particular broker. From experience, this is where the best deals tend to be found because you aren’t competing with as many other renters. Landlords who offer brokers exclusives also tend to be less sophisticated and are more likely to underprice their apartments.
2 – Public Listings Are Still Plentiful
While brokers dominate, there are still plenty of public listings on sites like Craigslist and Zillow. Unfortunately, you’re in competition with thousands of other eager renters, so put your running shoes on to keep up. There’s also a growing issue with housing scams in NYC so be careful about putting money down for an apartment before seeing it in person. In general, if it seems too good to be true it probably is.
If you’re going the classifieds route, treat it like a full-time job. Watch listing sites obsessively and respond immediately to promising ads. Schedule an appointment as soon as possible, and walk in prepared to submit your application or even sign the lease on the spot.
3 – Renter Qualifications Are No Joke
The New York real estate market is always a landlord’s market. Anybody but a handful of old-timer “civilian” landlords is going to require a thorough review of your financial qualifications and past rental history.
The standard is to require annual income 40 times larger than the monthly rent. On the example above, the $3,400/month one-bedroom apartment would require you to earn at least $136k per year! Roommates can help spread the burden around, but one way or another the roommates on the lease will need to meet that minimum combined income with official documentation. Be prepared to offer pay stubs, tax returns, and employment letters. If you use a guarantor or co-signer, their income needs to be 80 times the rent (over $272k in the above example). Yikes!
Many landlords also ask for references from past landlords, so make sure you’ve got letters or contact information ready to go. Finally, expect your employment to be verified along with a full check of your credit and criminal histories.
4 – It’s a Game of Speed
To maximize your chances for approval, walk into the viewing appointment with a folder of all your printed documentation, along with a .pdf backup on your phone to email if necessary. Be honest about your budget and financial situation and be prepared to compromise, especially on the size of the apartment.
We used to attend showings with everything already printed out & ready to go. Often we’d find multiple people at the same showings all interested in the same apartment but we ultimately were often able to win out simply because we had our paperwork submitted first.
Finding housing in NYC is all about speed. I can’t emphasize this enough. When you find what you’re looking for be ready to pounce and move quickly or you’ll likely lose out.
Clearly, finding a 12-month lease in New York requires real commitment and a small fortune. This is part of the inspiration for why we started Bedly. This process is just plain crazy and unattainable for most young people. This being said, don’t be discouraged. NYC is massive, and with the right focus and effort you’d be surprised at what you can find in New York City.
Feel free to shoot me an email at [email protected] or comment on this post if I can help you navigate leasing in New York!