No doubt about it. New York City is expensive. Know much rent you can afford, and keep your finances healthy.
Basic Budgeting for the New Yorker
The baseline rule for New York City rental applicants is simple. Show at least a gross annual income 40 times the monthly rent. Say you make a hearty $100,000 dollars a year. Divided by 40, that’s just $2,500 a month in rent affordability.
And don’t forget to factor in the initial security deposit.
Well, this is why salaries tend to be higher in NYC.
Even if you expect to take a high-paying job, remember that 35% of a New Yorker’s income goes—whoosh! —to state and federal taxes. Then there are utilities, data plans, a MetroCard, travel and entertainment, dentist visits…You get the pictures.
Don’t Go Broke With the Broker’s Fee
If you’re coming to New York City from out of town, brace yourself to pay a broker somewhere between one month’s rent to 15% of a full year's lease obligation.
Although paying the broker’s fee is an established NYC custom, there is a workaround. Deal directly with a property management company. One way to do this is by choosing a luxury apartment building and signing a lease directly with the company.
Sticker Shock? Here’s Plan B — and C
Housemates can make your dream of living in New York City a reality. Yes, you’ll be giving up some privacy. But when you’re living in New York City, you are not going to be cooped up in your place all the time together — the allure of the city, and its great transit network, will keep you moving.
The basic budgeting rule is the same in this case — only divided among the housemates. Each person on the lease should make 40 times their own portion of the rent. So, two people need to be earning just $50,000 each per year to make that $2,500 dream apartment their home.
The other possibility is to have a guarantor sign for you. A guarantor is legally defined as a person who’s obliged to pay the rent if you become unable to pay it. And they have to be good for it! The guarantor’s income should generally exceed 80 times the monthly rent.
Should you need a guarantor, a family member or friend may be willing to help, but note that an in-state guarantor may be required. Then again, you can pay for one. Take a look at Insurent's rental co-signing service. This offering is fairly priced and much appreciated by renters who have a credit and asset mix that poses challenges.
The Perfect New York City Apartment Home
Whichever way you decide to finance your lease, get your ducks in a row before you apply for it. Once you spot the perfect New York City apartment home, you’ll want to be ready to show why you’re the perfect person to live in it!
Carlyle Property Management offers an excellent selection of no-fee apartments in Manhattan’s best spots. If you’re keen on paying for amenities rather than big broker fees, we might be just what you’re hoping to find.
Live well in New York City. Contact us to learn more.