If you're searching for an apartment to rent you will have to consider the following guidelines. Being prepared at the time you see an apartment you like will help you get approved:
How much rent can I afford?
New York City is one of the most expensive places to live. While you may only want to spend 25% of your annual income, however, chances are you might have to spend more than that on rent. Most people spend 35% of their pre-tax income on rent.
What do Landlords commonly require?
The basic requirements are that your gross annual income be 40 to 50 times the amount of the monthly rent, and that you have a good credit rating (see credit report section below).
What paperwork will I need?
- Application form: The first step in the process, once you have identified an apartment, is to fill out an application form. Most management companies have their own forms that need to be used. If you are renting in a co-op or condo, you may find that you have to complete two applications: one for the individual owner and one for the board package.
- Letter of employment: This must be on official company letterhead. The letter must state your position, length of employment or start date, and your annual income. The letter must be signed by a person who may be contacted to verify the information provided. In some instances, this information can be confirmed via telephone call only instead of written confirmation. Please note that a signed job offer and acceptance letter is usually not sufficient.
- Pay Stubs: Copies of your three most recent pay stubs.
- Tax Return: Some management companies require a copy of your most recent federal tax return. A tax return is always required when an applicant is self-employed or if there are multiple sources of income.
- Landlord Letter of Reference: A letter from your most recent landlord is always helpful and is typically required. If you are unable to get a letter, have the name, address, and phone numbers of your previous landlord ready.
- Bank statements: The three most recent statements from your checking account, savings account, or any financial institution will usually suffice.
- Bank account numbers: These are often required on application forms. Have them ready just in case you need them.
- References: If you have an accountant or attorney, you might be asked to put their numbers down as a reference. Think of other people who could be references in case you need them and have their contact information handy. Not all landlords will require actual letters of reference.
- Identification: Most landlords require a copy of a photo ID at lease signing.
As a rule, credit reports are run on every applicant and guarantor. The fees for credit reporting/application processing range from $100-$250 depending on the company or service used. As with the application form, you may find that when renting a condo or co-op the landlord will require a credit report to be done in addition to the one done by the managing agent. Unfortunately, credit reports obtained on your own will not be accepted.
The information contained in your credit report will be weighed very heavily in the approval process. So what is considered inadequate? A few old late payments are usually okay. A high revolving balance is not good. Past due payments that are still outstanding are bad. Delinquencies and collections are very bad. If you suspect that your credit is not good, be sure to advise your agent. This will allow your agent to properly prepare you and the landlord for the process.
Different landlords have different ways of dealing with credit issues. Some will allow you to increase the security deposit or to use a guarantor. Others may reject the application entirely. When you use AptStar we offer solutions to guide you in a way that will save you time, money, and a lot of frustration.