A Guide to Renting an Apartment in New York
Finding a great (and affordable) apartment in New York is never easy, especially if you aren’t familiar with the city and how the whole rental process works. Furthermore, relocating to the city is probably more challenging than finishing a triathlon in the dead of winter, particularly when it comes to real estate. Know this: A great apartment is hard to find, and renting an apartment in NYC is probably tougher than buying a house in many other US markets. Yes, it’s that tough, and I am not exaggerating. Vacancy rates are often one percent or less, making the real estate market tighter than those size zero jeans you sported back in 1998.
(Note: Due to the pandemic, the vacancy rates have been higher, and securing an apartment in New York has been a bit easier, but that’s all temporary.)
Prices are based on supply and demand, which means this: more people want to live in New York City than there is inventory, which drives costs through the roof. But bear in mind, finding that perfect city apartment is possible, but you need to know the ropes before you begin the search. Here’s a bit of advice from someone who learned on the job. I rented an apartment and figured out how the NYC rental market works on the same day, but not by choice.
The stars didn’t align for me on this one, but I recommend starting your search at least six months before your move date. You will not be able to rent an apartment that long before your move, but you will be able to narrow boroughs and neighborhoods and at least begin looking at apartments in New York. Thus, you’ll know pretty quickly which sections of town you can swing financially. If you can find three areas you like and imagine living in as well as somewhat afford, you‘ll have more apartments to choose from. (I say, “somewhat” because affording life in New York City is relative.)
Once your date grows closer (about 60 days out), make a trip. Come to the city for a week or two if you can swing it, and sublet an apartment for the total NYC experience, and a chance to scout. You should have your job in place with a start date before you think about shopping apartments in New York. And you may need a broker. More on this later.
Where to look
Streeteasy.com is one of the most comprehensive sites you’ll find for apartments in New York. You can use filters to search within your budget and in specific neighborhoods, as well as look for certain amenities. Also take a look at Corcoran.com, Halstead.com, Prudential DouglasElliman.com, BrickUnderground.com (great for tips and basic info too), and Renthop.com. (There are many other sites out there, but these are some of the most inclusive.)
When renting an apartment in New York, cash is king
Okay, here goes. Sitting down? This is the shocking part. Most NYC landlords require that you earn 40 to 50 times your monthly rent to lease an apartment. If you earn $100,000 per year, you can qualify for a $2,000-$2,500 per month apartment. In most Manhattan neighborhoods, that might get you a minuscule studio, aka one room, which is why few people live alone in New York City. If you earn $75K per year and your roommate earns $75K per year, then you can qualify for a pretty nice apartment. (Probably a large one bedroom or maybe a small two bedroom, depending on location, but stop daydreaming about that Friends apartment.)
So what if you only earn $50K per year, or even less? You will need a guarantor or someone who is willing to co-sign a lease and be responsible for paying the rent. That person can be your mom, dad, brother, etc. A guarantor must earn 80-100 times the rent, however. And that’s not easy to find, either.
If you don’t have a guarantor or roommates? You can hire someone to help you find a roommate, or, if you qualify, go with Insurent, a company that can act as your guarantor. If neither of these is an option for you, then you might have to live outside the city until you earn more money. I also might add that you will need to have excellent credit and cash in the bank, so get your debt down and save your pennies. The process is not that different from purchasing a house. I have done both, and I think purchasing a house in another city was easier than renting an apartment in NYC. (Not purchasing an apartment in NYC –– that is another scenario completely.)
Fee vs. No Fee
Most New York apartments will warrant a fee, which goes to the broker(s). The typical fee is 15 percent of a year’s rent. If you rent an apartment that is $3,000 per month, your fee to rent the apartment would be 15 percent of $36,000 or $5,400. This fee is just to “get” the apartment. You will also have to pay first and last month’s rent (usually), and a security deposit, which is typically one month’s rent. Sometimes, especially in a down market, the broker’s fee might be negotiable. Don’t be afraid to ask if the broker is flexible on the fee, but in a hot market, you may lose the apartment if you are not willing to pay.
No-fee apartments in New York do exist, but be careful of scams. Many are listed on Craigslist, as well as Apartable.com, nybits.com, and other real estate sites. It is not uncommon for the monthly rent to be higher on a no-fee apartment, however. (Save on the broker fee, but pay more monthly.) If you want to live in this town, it’s going to cost you, and you’re going to pay one way or the other.
Broker, or not?
If you have limited time and resources, I suggest using a broker. That 15 percent is a painful check to write, but if you need to find a place to live pronto, a broker is your best bet. A good real estate agent can help you weed through the crappy listings, perhaps even negotiate the rent, and keep you from losing an apartment you really want. Know that there are good brokers and bad brokers. Find someone you trust with your life, even though you’ll only be renting a tiny slice of the Big Apple. If you’re not in a rush and have time to do the legwork, then search for a New York apartment on your own. Good luck!
If you have anything to add to my guide to renting an apartment in New York, please leave a comment!