In today’s competitive market, securing an apt to rent can be a frustrating challenge. Finding an apt during peak rental season (Spring, Summer and Fall) can be especially taxing. The idea is to be prepared and to get the right support to help you through the process. Finding an informative Real Estate Broker is a good place to start. Look for an agent who will listen, understand your circumstances, answer your questions and provide you with information.
Ideally, you should begin to search for an apt 30-45 days prior to your desired move-in date. Anything sooner may be a bit premature as most vacant apartments are available for immediate move-in and landlords will not hold a ready apartment for long without collecting rent.
Part of proper planning for your move is to have all associated fees readily available. Your move-in fees will vary based on the landlord and agent you choose. Below is a list of expected fees:
- Application Fee
- Credit Check Fee (typically collected per applicant and occupant of age + guarantor)
- Broker’s Fee*
- Pet Fee: Some landlords charge a fee to offset any potential damages from your pet
- Security Deposit: Typically the equivalent to one month’s rent
- First month’s rent is due at lease signing.*
- Last month’s rent of the lease term may also be required up front.*
*These fees are usually non-refundable.
Before you begin your search, it is important to know how much you can afford to pay each month. Federal guidelines say that the average household can afford to allot 30 to 40 percent of their gross monthly income towards housing expenses. An exact ratio depends on total debt. Most landlords will require that you make 40 times the rent; of course taking into consideration your debt ratio and other assets. As each individual landlord may have different requirements, it’s important to make your agent aware of your personal situation so that you are properly paired with a property.
In addition to showing that you can financially afford a rental, landlords typically require that you have good credit. Prior to starting your search, obtain a credit report from the three credit bureaus (Transunion, Equifax & Experian) as a landlord may use any of them and each one may rate you differently. While most landlords will want to run their own check, to avoid any surprises, it’s best that you know where you stand prior to commencing your search.
TIP: Every year, you are entitled to a free credit report from each of the three credit bureaus. Credit scores are not included but are available for a fee.
Most applications are declined due to bad credit. If your credit history shows a pattern of late payments, collections, charge-offs, judgments or worse (a prior eviction) renting an apartment may be extremely difficult. Some landlords may consider renting an apartment to someone with a less than favorable credit rating if the applicant can demonstrate current good rental payment history, a qualified guarantor, extra security deposit and/or prepaid rent. Be candid with your agent so that they can help you find a landlord that will consider your particular situation.
Prior to commencing your search make a list of your “wants” & “must haves”. Keeping your budget and the market in mind, be realistic with your list. You “want” a gym in the building but “need” to be within a certain distance from work. Joining a local gym may be a good compromise considering the rest of your needs and budget.
When making your list, consider what is important to you and your lifestyle:
- The size of the apt.
- How will you get to work?
- If you rely on public transportation, how accessible is it?
- Will you feel safe walking to the train or bus?
- How long will the commute be to work?
- What will be the cost to commute (1 fare vs. 2 fares)?
- If you own a car, how accessible is parking?
- If you have children, what are the schools in the neighborhood like?
- What features do you need your neighborhood to offer?
- Looking for recreation, find out about the activities in a community (restaurants, bars, galleries, theaters, parks, gyms, etc).
- What amenities must you have (laundry, elevator vs. stairs, dishwasher, etc.)?
- Will you have a pet?
Note: Having a pet may reduce the selection of landlords willing to rent an apt to you. Especially if you have a dog there are often size and breed restrictions to be aware of. Discussing this matter with your agent is very important to finding you and your pet a suitable home.
Ultimately, finding a good fit will be determined on your personal preferences and budget. Share your list of “wants” & “must haves” with your agent so that you don’t waste time looking at apartments that simply will not suit your needs.
Next, gather the required paperwork that most landlords will ask for when considering your application. Going to a viewing armed with the necessary paperwork could potentially put you ahead of a competing applicant that was not as prepared. Each landlord may ask for different documentation to support an application, but generally they will ask for any of the following:
1. Picture ID
2. Social Security Card
3. Bank Statement(s)
4. Bank Account Numbers
5. Verification of other assets
6. Current Employment Verification Letter (stating start date, position & salary)
7. 4 recent consecutive pay stubs
8. W2 or 1099
9. Last 2 years of Income Tax Returns
10. Proof of rental payment history (6-12 months of cancelled rent checks, money order receipts or a rent ledger from your current management co)
Students or recent graduate students (with little or no credit history) should be prepared to use a Guarantor to help rent an apartment.
A Guarantor (also referred to as a Co-signer) is someone who becomes responsible for all terms of a lease should the leaseholder default on their obligations. Essentially, they are agreeing to be legally responsible for the entire apt even if you are sharing the apt with a roommate. Their responsibility includes, but is not limited to, ensuring timely payment of the rent.
Who can act as Guarantor? Typically, landlords prefer that a parent act as a Guarantor because the philosophy is that they won’t allow their child to become homeless. But a Guarantor does not have to be a relative (of course each landlord has different requirements). Typically Guarantors are required to have excellent credit and make 80-100 times the rent. They will also need to submit to a credit/housing check and provide detailed documentation to show their financial stability. To be prepared, have them follow the same list of required documentation.
It may seem like a lot of personal information to provide but remember that in the end, the landlord simply wants to ensure that the rent will be paid on time, the apt will be taken care of and that the new resident will live harmoniously with the other neighbors. Anything that you can provide on paper to demonstrate your stability as a renter will help you stand apart from the dozens of others who would be renters.
The rental market is very competitive. Being prepared will help make the process of finding a suitable home easier.