NYC rent requirements?
Hi all,
Wondering if anyone went through a similar situation when finding a rental apt in NYC: I just got a job in Manhattan starting in mid-March. Base salary 140k. I'm looking at 1 BRs with a budget of 4.5-5k/mo (living alone). I definitely fall short of the 40x rent requirement.
In any case, my parents have offered to help me with paying for rent (edit: they are paying for half). How should I go about getting around rent requirements in this case? Neither of my parents individually makes 80x rent in this case so I'm not sure that I could use one of them as a guarantor directly. Can one of them just submit applications with me as another "tenant" and thus our combined income > 40x?
4.5-5k is, without question, way outside your budget. And this is coming from someone who always spends more on rent as a nice apartment is important to me.
The absolute max without going underwater is spending one full paycheck on rent (so ~$3.7k even before healthcare/401k... with 40x rule you qualify for ~3.5k). Taxes, food, utilities etc are wildly expensive in NYC. If you spend this much you will 100% be underwater on a month-to-month basis, and probably using up a lot of your bonus for living expenses. Even at $3.5k you will be a bit tight until bonus.
As for a guarantor - you need one parent making 80x, and they're not going to buy that you and your parent (with job in another state) are living together. Alternatively, some buildings will allow a guarantor service (think TheGuarantor) but these cost like a full extra months' rent and are not going to work for a luxury apartment where you're pretty far from the 40x.
You need to cap your budget at $3.5k. Look outside Manhattan (LIC, Hoboken, Brooklyn) if you want a nicer apartment, maybe consider a roommate... but a $5k apartment on a $140k base is absolutely not affordable.
Sorry, I should have been more clear. In the original post I mentioned my parents offered to help me pay for rent. They're paying for half of my monthly rent.
But with that aside, you're saying generally luxury buildings wont let a parent act as a "second tenant" on applications? Oof. Can a guarantor be two people combined? My parents make well over 80x collectively but not individually.
Maybe I'll have to start emailing leasing offices directly and see if they'll work with my situation before even applying.
Got it, I didn't see that in the original version. Makes much more sense!
A guarantor has to be 1 person. In this very competitive rental market I don't think many units will have much flexibility, maybe if a parent makes like 75x they would work with you, but I have lived here a while and never heard of people getting that waived or being able to use 2 people. I guess emailing leasing offices can't hurt, maybe target ones with a lot of vacancy
I would look into services like TheGuarantor, Rhino etc. Also, ask agents upfront if they accept these as some will not
For all you analysts wondering how so many 20-somethings manage to live stylish lives in Manhattan, here you have your answer…the bank of mom and dad.
Can’t tell you how big of a realization this was to me when I finally figured it out lol
Moved into a fancy building and don’t quite cover the 40x rule required. I offered to have my parents co-sign and told them I was an investment banker (provided proof of the latter), and they didn’t bother having anyone guarantee. They were nice about it and said merely offering was sufficient.
I should mention, it might not be a great idea to have your parents pay half your rent for what is obviously a fancy place if they don’t even make 80x the monthly...
I see, hoping a building will work with me like that.
My parents make more than 80x rent, just not individually (guarantor can only be 1 person).
are they married? they just look at the tax returns, which are combined
Just because your parents offer to help doesn't mean that you should accept it. Live within your means and pay for your self. You're fortunate to have parents willing and able to help, but part of growing up is paying your own bills.
Paying your own bills is overrated. I don't mean that sarcastically - inheriting money or having family support to subsidize your lifestyle just generally... improves your quality of life, which is kind of the point.
hah
haha
I read this and legit thought it was a joke when I saw "40x rule"
Good hell, y'all need to get out of NYC
Consider
120k base - around 70k after tax, 5.8k per month (assuming no healthcare, 401k, etc etc
This means if rent is more than 2.9k, you’re using more than one entire paycheck for rent (50% of your take home pay)
2.9k x 40 = $116k
It seems to be a good rough indicator of if rent will take up more than 1 of your biweekly paychecks
do other cities not have this rule?
Everywhere has the rule it's just stated as gross income has to be 3x your monthly rent in other places rather than your gross income needs to be 40x your monthly rent
.
Maybe, considering they're 100x happier than you'll ever be
hey guys, how would it work if I have a lot of money in savings? let's say I want to move to NYC and my base salary is $160k but I also have $200k on my broker account invested in SPY and I don't mind using it. in such case, can I rent a $5k apartment?
Some places will be ok with this, especially privately owned residences (as opposed to a big rental building). They would probably require a larger deposit or just pre pay many months.
You can't pre pay or do a larger deposit in NYC (rent laws put in place in 2019 to sideline predatory landlords).
But to your point, landlord dependent. The amount in your broker account though could throw off dividends or cap gains, which would be included in your gross income for those purposes
When renting from individual owners, i would just send them a few broker statements / net worth statements.
That's a lot of money to spend on rent. Once you get to NYC, you'll realize food and expenses are a lot. It might be best to wait until you hit $200K base to rent the $5K apt.
yeah I just wanna go to NYC to have fun for like 3 years, burn all my money, and then move back to LCOL location.
Not gonna work in NYC. The laws are strict now and you can't pre-pay. I've seen the occasional listing allowing 80x in a savings account (so $400k minimum) - but completely liquid, they wouldn't take something invested in a somewhat volatile security like SPY unless you had millions in the account
Generally next to impossible to rent in NYC without a job, unless your parents are extremely wealthy and willing to take on the lease
Man, the left really is working hard to destroy individual control over one’s own life.
I found out Bill de Blasio will be at my friend’s wedding this summer, now I know what to ask him about.
So what’s the workaround for someone with no job but with enough money to pre-pay the full lease? I guess have a friend be the tenant and give the money to the friend?
[EDIT: earlier use of "libt*rd" removed as I don't think such a name is appropriate despite their ridiculous worldview]
Maybe, you would do an asset test and send broker the information. I had enough money in my bank to pay my share of the rent for like 2 years and it got me to not need a guarantor.
I won’t comment on your monthly rent, if you have rich parents it’s not a big deal why you pay.
With regards to the income requirement, it’s not really a set in stone requirement.
They make these high thresholds so they have excuses to reject people they don’t want. If you have a good job and education and clean record and stuff, you’ll get approved. Don’t sweat it.
There are plenty of ways to get around this. You can buy a guarantor. Your parents don't need to make 80x the rent requirement, my guess is that having one of them guarantee the apartment will be fine (the 40x "rule" isn't an actual law, just a rule of thumb landlords use to assess delinquency risk). My guess is your parents have enough money in the bank such that a landlord will be fine with them as guarantors.
Look into luxury apartments without the brokers fee.
They tend to be a little less strict with the 40x rule because you won't be forking over 15% of the rent to some sleazebag who gave you a 5 minute apartment tour. Plus, you can use the money you would be paying to said sleazebag on giving yourself a nicer place to live.
Also, you could save money on gym memberships and the like.
Yeah I’ve definitely been trying to just look at buildings who handle their own leases etc. Trying to steer clear of broker units.
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