By Zack Forester
How much rent can I afford?
As a guideline in NYC, you can expect to spend approximately 25% of your gross annual income on rent. For example, if you earn $80,000 per year, plan to spend $2,000 a month on rent. What do landlords commonly require? Most landlords require their tenants to be of good credit and gross an annual income of 40 to 50 times the monthly rent.
What is a Guarantor?
A guarantor, also called a co-signor, is someone who is willing to guarantee your lease. The guarantor is responsible for all terms of your lease and your rent payment, should you default.
Do I need a Guarantor?
If you do not meet the financial or credit requirements, a guarantor is one way for you to secure an apartment. Most students and young individuals require a guarantor due to their inability to meet income requirements. When it is an issue of bad credit, however, a guarantor in conjunction with extra security might be needed. Please let your agent know if you will need a guarantor so he/she can better prepare your application.
Who can be a Guarantor?
A guarantor does not have to be a relative, but many landlords require the guarantor to live in the tri-state area: New York, New Jersey or Connecticut. Try to prepare your potential guarantor in advance. Speak with them about what they would be responsible and the paperwork that would be required of them. Timelines for apartment applications are subject to change. As a result, you might have to act quickly and the guarantor’s cooperation may be critical for your approval.
So what does a guarantor need to do? A guarantor needs to fill out an application form and provide the same required documents as the applicant. In terms of income, they are required to gross an annual income of 80 to 100 times the monthly rent of the apartment. The guarantor does not have to be present at the lease signing unless otherwise stated by the management company.
Rentals: The landlord owns the entire NYC building. Stabilized and non-stabilized apartments are included in this category.
What you need to know: The approval process for NYC rentals are relatively short, taking approximately seven days. It is based upon a credit check and financial requirements. Usually the tenant is expected to have a net income of 40 to 52 times the monthly rent. The security deposit is usually equal to one month’s rent for NYC rentals.
Condos: The apartments in the building are owned by individuals for residential and/or investment purposes. Owners are able to determine rent and length of leases for NYC rentals that are condominiums.
What you need to know: The approval process can take up to 30 days and is based on a credit check and the individual owner’s requirements. Application and move-in fees are common. Usually the tenant is expected to have a net income of 40 to 52 times the monthly rent. The security deposit for your NYC apartment may exceed one month’s rent.
Co-ops: The building is structured like a corporation. Individuals do not own an NYC apartment but shares of the building according to the size and value of their unit.
What you need to know: There are many restrictions on the rentals of co-ops including rent price, length of lease, roommates, etc. The approval process can take up to 45 days. Prospective tenants must submit extensive personal and financial information as well as interview with the co-op board. Usually the tenant is expected to have a net income of 40 to 52 times the monthly rent. One can also expect sizable application and move-in fees. The security deposit may exceed one month’s rent. Also, applying to a co-op can be problematic for diplomats or new hires without an established credit history.
Metropolitan Property Group the Manhattan-based commercial and residential brokerage is set to open a fourth office in Midtown West later this month. CEO and founder’s recent interview: http://therealdeal.com/blog/2012/03/09/metropolitan-property-group-expands-in-midtown/
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