New York is a metropolis and on any given day there are several thousand apartments available and at least as many listed on various rental platforms which are advertised as available but actually are not. This makes it insanely difficult for both first-time renters and even veteran ones to find the apartment which best works for them. The rental application process in New York icould be taxing and inventory moves fast. Prospective renters need to prove their financial stability, employment history, credit history and provide references in order to secure an apartment. The whole process requires meticulous preparation, a lot of effort and a considerable amount of money upfront. It is highly advisable to use a real estate professional such as Luxury Apartments LIC, so you can leverage our knowledge and expertise in finding and securing the apartment which works for you. Our Renter’s Guide addresses the fundamental questions our clients have about finding an apartment and the application process. Get the complete pdf version of the guide here.
RENTAL APPLICATION BASICS
Once you have identified the unit you want to move forward with, you will need to fill out a rental application form ASAP. You can submit the rental application directly at a building’s leasing office or from your computer at home. What does a rental application include?
Generally speaking, a rental application consists of a rental application form, supporting documents and a check to cover the application fee(s).
After you fill out the rental application form (rather easy, as it basically asks who you are, where you work, where you currently live, and some other generic questions) and pay the application fee (between $75-$150) the documents you need when submitting a rental application are:
-Photo ID (driver's license or passport)
-Letter of employment (or Offer Letter) on the company's letterhead, with the following:
• Length of employment
• Annual income
-Copy of last two or three consecutive pay stubs
-Copy of most recent bank statement(s)
-Copy of last tax returns (normally only the first 2 pages)
(Some buildings require potential renters to include a copy of their most recent Federal Tax Return (1040). Renters should have their tax return available just in case it is required. Self-employed renters: if the income comes from different sources, you will be required to submit tax returns and a letter from a CPA stating the nature of your business, as well as, projected future income. Business owners looking to rent are almost always required to submit a tax return.
-Copy of W-2 form (normally only the first page)
-Verification of other assets, if any
-Landlord reference letter (Letter of reference from a previous landlord is one of the most important reference letters a renter can submit to a landlord/management company who is processing their application)
Each building has its own application form and requirements so please make sure to check with your Luxury Apartments LIC agent in advance whether there are any special or/and additional requirements you need to be aware of.
GENERAL APPROVAL REQUIREMENTS:
Approval requirements differ depending on the landlord/management company and/or on the building. The following are general guidelines that apply in most instances. If you think your credit report is bad, advise your Luxury Apartments LIC agent so they can prepare you for the application process and ensure that the application is presented and prepared in the best possible light. Landlords/management companies have different ways of dealing with credit problems. Some landlords/management companies allow renters to increase security deposit while others require a guarantor. Some may simply reject the application. Your Luxury Apartments LIC agent will advise you in order to save you time, money and frustration.
Renters need to show income of at least 40-50 times the monthly rent. For example, if you are applying for an apartment with monthly rent of $3,000, you need to demonstrate that you earn at least 40 times the monthly rent ($3,000x40=$120,000). This income requirement can be satisfied by one of the tenants alone or by combined income. For example, if Sally and Jessica are applying for an apartment with monthly rent of $3,000, as mentioned above, they will need to demonstrate that they earn at least 40 times that amount ($3,000x40=$120,000). If Sally makes $40,000 a year, the minimum Jessica will need to show as earnings would be $80,000 in order for them to qualify for the apartment.
Renters need to have a good credit history. A major component of the approval process is based on the credit report. A report which has a couple of late payments is ok, a few hard inquiries are also normally overlooked. Your credit score needs to be decent or excellent in order to qualify. What makes a credit report bad? High revolving balances, outstanding past due payments, delinquencies and collections, public records, Landlord-Tenant records are all things which could get your rental application rejected.
OTHER OPTIONS TO QUALIFY
If renters do not meet the above-mentioned criteria (income or credit, or both), they have the following options:
1. Using a personal Guarantor or Cosigner:
A guarantor or co-signer is a person who guarantees the entire rent for the entire lease term and lease renewals should a renter default on their rent payments. A guarantor can be anyone who agrees to sign on behalf of a renter and who is qualified to act as a guarantor.
The documents required from a guarantor are similar to the ones required from the applicant(s):
-Application Form: the same form as the applicant fills out.
-Credit Report: A guarantor's credit report must be in good standing.
-Federal Tax Returns: A guarantor is required to submit federal tax returns as proof of income.
-Annual income: The guarantor must show an annual income of 75-80 times the monthly rent.
-A Guarantor is not required to be present at lease signing.
-In some cases, landlords/management companies require a guarantor to reside in the tri-state area (New York, New Jersey or Connecticut).
2. Using an Institutional Guarantor
Institutional guarantors are financial institutions willing to accept the financial liability of the rental contract in exchange for a fee. Usually, these institutions require lower incomes and credit scores to act as your guarantor and they are especially helpful when the applicant is new to the country and does not have a personal guarantor and/or credit histroy. Typically these companies charge around 2/3 of the monthly rent as a flat one-time fee but the fee is really on a case-by-case basis. Please ask your Luxury Apartments LIC agent for a recommendation on which Institutional Guarantor to go with as different buildings work with different Institutional Guarantors and the requirements/arrangement vary as well.
3. Prepaying part/entire amount of the yearly lease amount
Some landlords would allow an applicant with lower credit or insufficient income to prepay 3 or 6 months of the annual lease amount, or, in some cases, they will require the whole amount in advance. Please note, you still need to provide the security deposit as well.
4. Putting more towards the security deposit
Generally, landlords require one-month worth of rent as security deposit. In cases where, the landlords deem your application not strong enough, they might give you an option to put more towards the security deposit. Instead of the standard one month rent of security deposit, the landlord may require, for example, 3 months worth of rent towards the security deposit. Make sure to inquire with your Luxury Apartments LIC agent on which buildings/landlords are open to this kind of arrangement when it comes to the approval of your application.
Approval usually takes 1-3 business days. Sometimes it can be the same day, sometimes it could take longer.
Once your application is approved, the landlord will give you 24-48 hours for you to review the lease and provide the funds towards the first-month rent and the security (or whatever your unique, specific arrangement might be). You can sign the lease on paper or electronically. You can submit the first-month rent and the security to the building’s management leasing office in a form of certified bank checks or you can pay online with your debit or credit card (additional fees typically apply).
TYPICAL QUESTIONS ANSWERED
Why is the Application Process So Intense?
If a renter doesn’t pay rent on time or becomes a nuisance to the neighbors, the landlord’s business can be adversely and significantly affected. The application process, which includes background checks and financial checks, helps a landlord minimize risk. Typically, a landlord will pick the least risky, most qualified tenant.
How much is Luxury Apartment LIC's broker fee?
Luxury Apartment LIC does not charge for information provided by the website, nor do we charge for viewing of apartments or rental properties through our agents. Clients pay a broker's fee ONLY if they rent a property through Luxury Apartments LIC. If the property is a NO FEE apartment, you will not incur a broker’s fee.
What does 'No Fee' mean?
When a broker helps you find an apartment, they’ll always get paid a fee. It’s just a question of who pays it.
If the landlord or property owner pays the fee, then the apartment is advertised as no-fee. If the landlord does not pay the fee, the apartment is advertised as requiring a fee which must be paid by the renter.
When should a perspective renter begin an apartment or property rental search?
Potential renters should begin their search 4-6 weeks prior to anticipated moving date.
What are Rent Stabilized buildings and/or apartments?
Rent stabilized buildings and/or apartments are buildings whose rent is regulated by the City of New York and State of New York. Rent increases are only about 1-4% annually. Once a renter secures a rent-stabilized apartment, they have a right to renew a lease agreement indefinitely.
Why choose Luxury Apartments LIC? What sets it apart from all the others?
Prospective renters seek our services for 2 main reasons:
First, our clients want to find the best deals available on the market. They understand that our agents will save them considerable amount of money in the long run.
Second, our clients want to save the time and energy that gets wasted when trying to find and close on a property in New York's dynamic real estate market. The process can be very frustrating without much result. Our clients come to us in order to utilize the guidance, knowledge, and experience of our licensed agents. Our management team brings over 20 years of combined real estate excellence to the table. Our clients benefit by saving money, time and effort.
Is having a pet a problem?
The properties that we represent are for the most part pet-friendly. Normally, buildings allow one dog per apartment or two cats. In some cases, there is a monthly pet fee, pet deposit (refundable or non-refundable). Additionally, there are breed and weight restrictions. Please ask your Luxury Apartments LIC agent for more information about the pet policy of the building(s) you are interested in, so they can guide you accordingly.