December 04, 2019
I’ve talked to many potential clients lately about their plans to find a new apartment. More often than not, their ideal move date is nebulously in the future, or several months out from our conversation. Almost always there’s a discussion about nervousness about finding the right place, about knowing what’s out there, about preparing for the process.
In truth, there’s no point in looking for an apartment in New York until, at most, four weeks out. It feels like a very tight time frame, but if you’ve done your prep work, the turnaround time on the rental process can be very fast.
So why can’t you look for a new place two months in advance? Well, landlords want to keep vacancies to a minimum. Generally, you can’t see an apartment until the tenant has moved out, which means the landlord isn’t collecting any rent on it. They are most interested in finding a new tenant within 15 or 30 days. It is very unlikely that they would be willing to forgo an additional month’s rent (or more) to approve a later move in. For this reason alone, many real estate agents won’t even take a client out until four weeks (or less) before the move-in date. They do not want their clients to find their dream apartment, only to discover that the landlord will only accept immediate move-ins. There will be another dream apartment out there, but it is very hard to erase that first one from your memory!
So how can you prepare for the apartment search, to maximize your time and ensure success in finding your new home?
1. Gather your documents - Basic documents that just about every landlord requests are:
Tax Returns or W2s from the most recent year (some ask for both)
Paycheck statements/stubs - generally the most recent three
Bank Statements - the three most recent months
Letter of Employment (especially important if you are starting a new job)
2. Save some money - Generally, you will need one to four months of rent saved up. This money goes to:
First Months Rent
Broker’s Fee (not all apartments have an upfront broker’s fee)
Any additional expenses unique to the lease or landlord
It’s a lot of money, but planning for the expense can save you a lot of stress and worry. The other money-related detail is, often when landlords are looking at your bank statements, they often want to feel reassured that you can afford to move, so extra padding will never hurt you.
3. Know your credit score and understand your credit history - having a general idea of your credit score in advance of your apartment search will aid your agent in guiding you to the best possible scenarios for application approval. 680+ is generally a good enough score for most landlords. If your score is lower than that, understanding what has caused that to be could be crucial to what happens next.
Medical debt and student debt are often “forgivable” credit issues and if they are the only derogatory items in your report, you may still be fine. Late payments, collections, and bankruptcy are much harder to forgive, and so you should work with your broker to discuss alternative ways to get your application approved.
NOTE: Any of the consumer credit reports that do a soft pull to find your credit score are great, but usually not accurate. If those tell you you’re in the 600’s it may be best to go directly to one of the big three: Equifax, TransUnion, or Experian to get a more accurate picture of your credit score.
4. Plan for alternative application procedures, if necessary - If you find that your credit is subpar or you don’t make quite enough in annual income (40x the monthly rent), there are still other options to help you land an apartment:
Get a Guarantor - Human guarantors are someone you know who will also apply for the apartment with you (as a “guarantor”) who will be ultimately financially responsible if you can not pay. A guarantor should make 80x the monthly rent and have a credit score of 700+. They will need to provide all of the same paperwork as you and will likely need to pay an application fee. This process can sometimes be confusing to both the Applicant and the Guarantor, so ASK QUESTIONS until it’s crystal clear.
Commercial Guarantors - A commercial guarantor is a company that basically insures your lease. If you can’t pay, it acts as an insurance policy and makes sure that the landlord is paid. There are a few companies out there. Many of the landlords in our portfolio welcome Rhino and Insurent. It is highly recommended that you go through the approval process for one of these before starting your viewing process. Consider it another piece of paperwork to include in the list above.
Above all, be open and honest with your agent. Agents have seen it all and are legally bound to represent you confidentially. Their goal is to get you an apartment, and their job is to present you to the Landlord in the best possible light. If you can’t provide some aspect of paperwork, or your credit or income are not perfect, tell your broker about it. They will assist you in a strategy to work around the issue and put together a stellar application.
Once all of this is organized, and you’re about a month away from moving, then it’s time to go looking at apartments! Again, be honest with your agent about what you’re looking for and listen to them if they give you feedback about your desires versus your budget. By doing this, they will be able to put together an efficient showing list and get you out to apartments that will work for your budget and your lifestyle. If you come prepared, from showing to lease signing could be a matter of days! Don’t waste your time worrying about it months in advance!
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