12 May How to Rent an Apartment in NYC – Read This First!
How to Rent an Apartment in NYC
Renting in NYC can be the most overwhelming experience anyone goes through. Why do I say that? Because if you thought you understood real estate back in your hometown, scratch it – New York City is completely different.
But how different you might ask? There is a huge demand of renters in the city and not enough supply. Things move quickly in the rentals business, because if the price is right – expect that listing to be off the market within the same day! Yes, the – same – day! Sometimes within hours. Some people don’t believe it, but I see this every day.
So this article is to educate people who are looking to move to NYC.
Congratulations, you have made the decision to move to the best city in the world! The city with tons of opportunity and a chance to chase your dreams. Stand in line because there are many people coming for the same reason, and they all need a place to sleep.
So what now? How do you start your search?
With a few google searches, I am sure you know which websites to use.
and much more.
If want to get a feel of what is out there, search online and see what you can find. If you call a broker to see an apartment when you are looking to move in 3 months later, good luck. It is almost impossible to get a broker to go out and walk around with you if you are not looking to apply within a couple of weeks. It is not because they don’t like you, it is because that apartment will not be there 3 months later and the management company will not sign leases that far out. Brokers do not get a salary or hourly pay, we only get money based on commissions. (AKA broker fees – which I will get into later) And in this quick business, time is money.
Rentals come and go, so whatever you saw today will probably be gone that same day. So there is no need to see 3 months down line. I suggest if you want to work with a broker or not, to see units 2 weeks before you need a place. If you are out of town, schedule a day and time with your broker and plan to see multiple units. Find one you like and apply immediately.
What do you need to apply? Typically it is just
-Recent Tax return
-Recent Bank Statement
Things to take notice when finding a place:
– How far are you from the train?
– How far is the grocery store?
– Walk-ups (how far up are you ok with?)
– Laundry – in the apartment, in the building, or no laundry (cheapest option)
– Pets? (this is tough in NYC, but not impossible)
– Doorman (Great to have if you have a lot of mail packages sent to your home)
Here is the rule of thumb about pricing. The further south you go in Manhattan the more expensive, or the less square footage you will get for your money. Also if you want a balcony/terrace expect to pay more. (These go really quick!)
A doorman is a great feature and people think they are security guards, but they are not. If you are looking for a doorman building, expect to pay more for it.
Most Frequent Questions I Get from Clients
– Is it possible to get a TRUE one bedroom in Manhattan below 96street for less than $1900?
No, but it is possible to get a studio. That could be changing soon.
– I hear Brooklyn is a hot area, can I get a place for under $2000?
Yes, you can but know that Brooklyn is becoming almost the same price as Manhattan. Developers are going further south to fill demand, but just know you are getting further and further away from the city. Keep that in mind.
– If I am willing to live in Inwood (206 street), would it be better to live in the South Bronx?
If you want to save money, yes the Bronx is a place to be. Developers actually have bought tons of land in South Bronx (AKA SoBro) and are looking to rent out tons of luxury apartments soon. To put things in perspective you can get a doorman building, bells, and whistles for less than $2000. And you are only 20 minutes away from the city. You be the judge.
– Why is rent so expensive in the city? I have a home in Tennessee and pay only $1500 for a 4 bedroom house with a pool.
Simple economics – supply and demand. There is a very high demand of people wanting to live in the city, but the supply does not match. Therefore, prices go up and there is no sign of it going down anytime soon.
– I think it is ridiculous to pay a broker fee for someone to just open a door for me. Why do you guys charge a broker fee?
Oh boy, I will get into this in more detail but in short, if you talk to 20 different brokers you are doing all the work. Make one broker earn their fee, so it is not just about opening doors. Lastly, since demand is high most landlords do not pay brokers, therefore the cost goes to the tenant. (I’ll explain)
Since we are on the topic about broker fees let me explain what it all means.
Fee Vs. No Fee – What is it and how do I get away from paying any fees? When you rent an apartment in NYC typically the fee is 15% of the annual rent. For example, if the rent is $3000 a month, the fee would be $5400. $3000 times 12 months times 15% = $5400. This would be on top of your first month’s rent and 1 month of security deposit. (depending on the situation – credit, job, etc) Now that can be a lot of money for some people, but the best way to see the fee is to see it as a service. (And I will go deeper into this soon)
The reason why the majority of landlords do not pay the fee to the broker is because they don’t need to. The demand is so high that if you don’t want it, that’s ok because the next person will. Most of the time the landlords don’t want to deal with 5 to 10 people a day with showing an apartment. That is why they let brokers do all the work.
No Fee apartments, look like the obvious choose when picking a place. Not so fast, I thought the same as well when I first moved into the city. The majority of No Fee apartments have huge advertising budgets and have a leasing office with tons of people working. How do these people get paid? How do they pay for all the advertising? YOU PAY FOR IT!
What you pay per month, is a premium price vs what you can really get for the same price or lower if you were to pay the fee. Here is an example.
Apartment A has 450 sqft and is on the 3rd floor (walk up), no laundry and is 3 avenues away from the train – cost $2650/month – No Fee.
Apartment B has 450 sqft, elevator building, laundry and is 1 avenue away from the subway – cost $2300 – with Fee.
To make this easier let’s add up what it would be for the entire year.
Apartment A would cost – $31,800 1st year ($2650 x 12 months)
Apartment B would cost – $31,740 1st year ($2300 x 12 months plus $4140 brokers fee)
Here you can see how much you are saving by paying a fee. About $60. Now adding up for the second year – see below.
The rent increase is about 3% to renew a lease.
Apartment A went from $2650 to $2730 = $32,760 for the second year ($2730 x 12 months)
Apartment B went from $2300 to $2370 = $28,440 for the second year ($2370 x 12 months plus no additional brokers fee)
Let’s add up year 1 and 2 and see what the total numbers are.
Apartment A $64,560 = total for two years
Apartment B $60,180 = total for two years
Total savings of $4,380 for two years. The average tenant stays in an apartment for 3 years, because they do not want to go through the hassle of moving again. Therefore, the savings will be even bigger. Fee apartments typically are better apartments, and in the end, you will pay less for it. Something to think about.
So what do I suggest? Well obviously if you have enough money saved and want to get a good deal I would say go with a broker. But if you are on a budget and want to save upfront money, then you need to do a lot of the work yourself.
There are thousands of management companies in NYC, and it is almost impossible to have a live feed of available units. They come and go very quick. So how do brokers find out what is available? They make a lot of phone calls to landlords/management companies every day, see when keys are available, and to see if another broker can give you access, or you try to coordinate with the super of the building, etc. It can be very difficult just to get access into a unit. Brokers do a lot of phone calls, emails, text messages, going around the city picking up keys to get it all done for you. But an established broker knows the super, the owner, the management company, the other broker, etc and can make the process easier.
We do this every day, talking to the same people almost every day and know which management company is going to accept your application or not. When a client tells me that they are looking for a studio with stainless steel appliances that accepts dogs, I know which management company to take them to. That knowledge costs something, don’t you think? I am saving you time, and we all know time is the most precious commodity that you can never get back.
Again, time is money.
Now back to seeing the fee as a service. Essentially we are working with you to make sure that we find you the best apartment, at the best price, and most importantly make sure that you get approved. Brokers that represent you are working in your best interest. (Well most brokers) Me and my team work really hard to make sure that all your paperwork is in place so that you get approved.
An experienced broker knows the inventory in their head vs a rookie broker who doesn’t know what is really out there.
When a hot property hits the market, guess who knows about it first? Yes, the broker. I had multiple experiences where a hot property came into the market, I’ll call the client immediately to let them know. I told him, “we need to see this property now!” He left work for a bit to see it, and we filled out the application inside the apartment. Guess what happened after? I ran with my business partner all the way to the management’s office to drop off the paperwork to make sure we were first in line to take it off the market. We work for our fee and make it happen.
So is it possible to find apartments without a broker? Yes, but you will probably not be able to find the hidden gems. Sometimes the hidden gems are no fee as well, but they don’t advertise them. Why? Because in order to be competitive with rent prices they can’t spend money on advertising. They send out a list of available units to the brokerage community and within hours the unit will get rented out. It is that simple.
So in conclusion about fee vs. no fee, if you want to save money on the fee be prepared to do a lot of the legwork and tons of walking around the city. I suggest you walk around the neighborhood you like and see if there are any postings of “No Fee – Apartments for Rent” on any buildings. But if you saved money for your move to the big city and want help in your search – feel free to contact us – we will find you a great deal fast.
Happy apartment hunting! 🙂
If you have any questions feel free to reach out to us!