How Much Rent Can You Afford In NYC?
Living in New York City certainly has its advantages—like being a part of the action in the “city that never sleeps,” and having access to a robust public transportation system that can get you just about anywhere you need to go.
If you’re thinking about moving to The Big Apple, though, you may be feeling a little uneasy about finding a rental that you can afford. After all, NYC is notorious for its high rent. In fact, depending on the specific neighborhood, you could easily spend well over $2,000 per month in rent alone on a studio apartment.
Not sure how much you can afford? There are a few factors to take into consideration that can help you get started. And no matter how large or small your budget may be, there are some additional steps you can take to make securing your perfect rental easier.
Determining What You Can Afford
The first step is determining what you’ll be able to afford in terms of rent based on your current earnings and expenses.
Inquire About Income Requirements
You’ll always want to check with a particular landlord or property management company to find out what their income requirements are for renters. As a general rule, however, most New York City landlords will want their tenants to make at least 40 times their monthly rent in gross annual income. This means that if you’re looking to rent out an apartment that costs $2,000 per month, your landlord will probably want your gross (before taxes) annual income to be at least $80,000.
If you’re looking to move with a working spouse or a roommate, you can factor both of your incomes into this equation as well. Either way, expect to be asked for proof of your income in the form of pay stubs, tax forms, and maybe even a letter from your employer as part of the screening process.
Factor In Other Living Expenses
Of course, rent isn’t the only expense you’ll want to take into consideration when determining how much rent you can afford in New York City. You’ll also want to inquire about utilities and a home cleaning service and who will be responsible for paying them. In most cases, the tenant will be responsible for all utility bills (gas, water, electric, etc.) in addition to monthly rent. This can easily add a few hundred dollars per month to your monthly living costs. In rare cases, you may be able to find a landlord who will include some (or all) utilities in your rent, which can save you a pretty penny!
Another potential expense you won’t want to overlook is that of renter’s insurance, which you’ll definitely want to have regardless of where you end up living. Specifically, renter’s insurance provides both liability and property damage protection inside your apartment.
This means if your apartment gets broken into and your new 50″ flat-screen TV is stolen, you’ll be covered. If you’re hosting a gathering in your apartment and one of your guests trips on your living room rug and breaks an ankle, you’ll be protected against financial liability there as well. Renter’s insurance is generally pretty inexpensive, but it’s more than worth the added peace of mind it will afford you.
Broker’s Fees and Other Up-Front Expenses
In addition to your rent and monthly living expenses, there are some other up-front costs that can make moving into your first NYC apartment rather pricey. Consider, for example, that you may have to pay a broker’s fee if you’re using a broker to help you find an apartment. Typically, the cost for a broker is around 12-15% of your annual rent or the equivalent of one month’s rent. This is nothing to scoff at!
It is also not uncommon for landlords to require a security deposit in addition to first and last month’s rent up-front before you can even move in. It’s easy to see how quickly these costs can all add up when you look at an example.
Let’s say you find a great deal on a studio apartment in Queens for $2,000 per month. You used a broker to find the listing, so you need to pay your broker $2,000 as soon as your lease is signed. Your landlord also wants a security deposit equivalent of one month’s rent, as well as first and last month’s rent up-front. With all this in mind, you’re looking at $8,000 of up-front costs just to move into your apartment. Of course, this doesn’t even include the cost of utilities or any furniture you may need to buy for your new place.
Ways To Stretch Your Dollar In NYC
If you’re feeling a little discouraged by high rent prices in NYC, the good news is that there are ways to stretch your dollar.
Consider A Guarantor or Roommate
If you’re having a hard time finding an apartment that’s in-line with your income or if you’re otherwise having a hard time getting approved for the apartment you want, you might consider securing a guarantor or finding a roommate. A guarantor is a viable option for those who have the money to afford an apartment, but other circumstances (such as credit history or short employment history) are making it difficult to get approved.
Remember that a guarantor is somebody who signs onto your lease to take legal responsibility, so if you fail to make your rent payment, they could be stuck paying it on your behalf. Ensure that your guarantor is somebody who understands this very serious responsibility before they sign.
Looking for a roommate can be another great option for stretching your dollar further in NYC. In fact, it is extremely common for people to rent with roommates, as you can secure a much better value on a two-bedroom apartment than you can with a one-bedroom or studio. There are plenty of online services that will even help match you with a roommate based on your living style and other preferences.
Explore Different Neighborhoods
New York is a large city with many different neighborhoods, including the Bronx, Manhattan, Queens, and Brooklyn. Keep an open mind when it comes to these different neighborhoods to increase your chances of finding your ideal rental. While Manhattan may be your dream location, you can likely find an apartment for half the price in the Bronx. And with NYC’s robust network of public transportation, you should never have a problem getting where you need to go.
Hopefully, you have a better idea now of what to expect when it comes to renting in NYC and how to determine what you can afford when it comes to rent and other expenses. Be sure that you also carefully read your lease agreement before you sign, paying special attention to what it will take to get your security deposit back. One of the best ways to get your deposit back in-full is to leave your apartment spotless, which you can do by hiring a professional cleaning service.