MANHATTAN — The rental market in New York City tends to heat up in August with the influx of newly minted grads angling to sign leases before starting work.
Good news for renters: inventory is on the upswing.
Last month, the number of apartments on the market in Manhattan and Brooklyn were the highest in years, forcing more landlords to sweeten the pot with concessions like a free month’s rent or covering brokers’ fees.
Bad news: rents are still outrageously high.
In Manhattan, for instance, the median price — representing the mid-point of the market — reached $3,450 a month in July, while Brooklyn’s median was $2,826 a month, according to a recent report from Douglas Elliman.
Here’s what you need to know before you sign your lease.
1. Know your budget.
Understand what you can afford — and what your landlord will expect when it comes to your income.
Many landlords require a tenant to have good credit and earn a yearly salary that’s roughly 40 times the monthly rent, so for $3,450 a month, you’d need to earn $138,000.
And if you have a guarantor co-sign the lease because you don’t earn enough or your credit is shaky, that person’s income needs to be roughly 80 times the monthly rent.
Housing policy experts agree that if you pay more than 30 percent of your income on rent, you’re considered “rent-burdened.”
Unfortunately, in New York City, roughly 42 percent of renters — or 900,000 households — are rent burdened, according to a report from the Citizen’s Budget Commission.
2. You will likely need a roommate.
If you already have a roommate lined up, make sure you’re both seriously committed, advised Lindsay Wirt of FirstService Realty NYC.
“I have worked with many clients that lose roommates halfway through the application process,” she said, “and it’s devastating.”
Jeffrey Hannon, of Mirador Real Estate, advised getting a “roommate agreement” signed by all “to add one more level of protection no matter how close of friends” since all tenants are on the hook.
“Know who you are living with and make sure they’re responsible and have similar lifestyle as you before signing a lease with them,” he said.
If you still want roommates but want your own lease, there are several co-living complexes sprouting up around the city, where you have a private bedroom but shared a kitchen, bathroom and lounges — like Common in Crown Heights and Williamsburg, WeLive in Lower Manhattan, and the brand-new Ollie, which is building a new project in Long Island City promising rents starting around $1,500 a month. Housekeeping is included, addressing one of the biggest sore points of sharing apartments.
3. Do your homework on a building’s history.
Besides researching listings on sites like Streeteasy and visiting different neighborhoods, you should dig into a building’s history to see if there are red flags.
To help, Yale Fox, a TED Fellow whose work focuses on income inequality and housing rights, created Rentlogic, a rental platform that has current listings and has culled 8 years worth of open source data from various government agencies — like reports on vermin infestations, mold problems or construction violations — to assign each of the city’s 1.1 million residential buildings a letter grade.
For instance, a duplex with a private garden on a beautiful West Village block on West 10th Street, currently on the market for $5,250 a month, seems pretty swank. But it scored a D grade because of past safety violations, heat and hot water problems and landlord issues, according to Rentlogic.
4. Learn how to spot a rental scam.
If a deal seems too good to be true, proceed with caution, and if someone requests money before showing you an apartment, that should raise red flags, experts agree.
Joe Peretore, a broker with Level Group, had recently rented out out a two-bedroom unit in Williamsburg for $2,600 when he began getting calls about the same apartment for $2,300. It turns out that “Nigerian scammers” had simply lifted his ad — including his name — and posted it on Craigslist for the lower price. When Peretore saw the posting, he reached out, posing as a renter, and was told to send $300 to get a leg up since the unit was in hot demand. He flagged the ad for the site.
5. Lower your expectations.
You will have to compromise on “EVERYTHING,” said Douglas Wagner, of BOND New York.
“If you’ve never lived in the city before, expect to discover that New Yorkers live in the least amount of residential space in the country,” he said. “Bedrooms may be 10′ x 12′. Or they may be smaller. Kitchens are often 6′ x 9′, and dishwashers are a luxury.”
Be open to higher floor walk-ups, “fringe” neighborhoods and converting one-bedrooms into two or more, Hannon said.
“If you need a doorman, great views or must live in a prime location you better have a good budget for it,” he offered. “If not, get ready for your sixth floor walkups and views of brick walls.”
6. Have your paperwork ready — along with some money you can access quickly.
You’ll need bank statements, pay stubs or W2 forms, tax returns and a photo ID. If you’re starting a new job, have a copy of your offer letter detailing what you’ll be earning.
Make sure your paperwork is organized in a PDF file in a draft email that you can send at a moment’s notice, Peretore advised.
“Minutes make the difference in a hot rental market and this is an easy way to get ahead of the game,” he said.
You’ll also need to have instant access to enough money to pay a month’s rent and a security deposit at the time of your application for an apartment, Wagner added.
And be aware that personal checks are almost never accepted for apartment applications and lease signings; only cashier’s checks or money orders are.
7. Be upfront about about “pain points” like bad credit.
It’s important to disclose things like bad credit to your broker and landlord and be willing to offer something up in exchange, Peretore advised.
For instance, someone with bad or limited credit should be ready to offer four months security or pay a big chunk of rent upfront, he said.
8. Never assume when it comes to pets.
Make sure you not only find out whether a landlord accepts pets, but your specific breed.
“If you have a 50-pound golden retriever and the listing says ‘Pets allowed,’ don’t assume that your specific pet is,” Peretore said. “Literally, the most challenged you can be as a renter in New York City is having a dog over 50 pounds.”
Some renters make it work by sending a picture of their dogs, along with a story about “how chill it is” and offering to put more down for a pet deposit.
“I remember someone sending me a picture of his tiny girlfriend next to his big dog,” Peretore said of a rental listing he had. “It worked.”
9. Don’t second guess your decision.
After losing out on your dream place — which is all too common here —and signing a lease elsewhere, don’t second guess your decision too much, suggested Lynn Saladino, the in-house wellness consultant at Mirador Real Estate.
“You will just wear yourself out,” she said. “Remember, the commitment is temporary. Even if you end up not loving the place, it will offer you a home base to explore and learn more about what you’d like for your next place.”