Can you Afford Rental Property in NYC? This brief guide will help you make an informed decision.
New York City is one of the most happening cities in the USA to live in. Considered as the melting pot of America, the city features cosmopolitan at its best with nice job opportunities, vibrant nightlife, and spectacular landmarks.
However, moving to NYC on your budget may be uneasy. The Big Apple is also known for its high rent. Even a studio apartment in a basic neighborhood can cost you $2000 per month in rent.
That’s why it is important to determine how much you can afford. There are a few considerations to take into account to get started.
Can you afford an apartment in NYC with your existing salary and current expenses?
Many landlords in NYC require their potential tenants to make at least 40 times their monthly rent in gross annual income. It simply means you have to divide your gross annual income by 40.
For example, if you make $40,000 a year, you can be eligible for an apartment that goes around $1,000 per month. Entering into a one-year lease means you have reserved nearly 30% of your annual income for rent, leaving 70% for your expenses, utility bills, and monthly bills.
You can use our Rental Calculator to find what you can afford. Just feed your annual gross income and monthly debt like insurance or loan.
Rent isn’t the only expense.
Factor in other expenses like utility bills, lifestyle maintenance, and monthly bills. You might be required to opt for a renter’s insurance which is another expense to consider.
Besides your rent and living expenses, you need to pay for a broker and other things while moving into the apartment. For example, you have to pay a broker’s fee if you are using a broker to find an apartment. Generally, the cost of a broker is nearly 12-15% of your annual rent or the equivalent of one month’s rent.
You might be asked for a security deposit in addition to the first and last month’s rent up-front.
If it is still hard to find an apartment under your budget, you can think about ways to lower the expenses.
Keeping a roommate means the rent is split between two persons. By sharing the expenses, you can find a much nicer apartment in the neighborhood you want.
But this may be a trade-off if you want to maintain your privacy.
This can work if you have a two-bedroom apartment. Sometimes, a landlord will require you and your roommate to make the 40x of your split portion. You can easily find a like-minded roommate with plenty of online roommate-finding services.
Read Also: Best Ways How To Find Roommates In NYC
If your annual income is not 40x the monthly rent of the apartment, you can go for a guarantor.
A guarantor is both legally and financially responsible to pay your rent when you are not able to pay. The guarantor is generally required to make 80 times the monthly rent.
The guarantor is useful for people lacking employment history; a non-resident of the US; those who have a poor credit score; new graduates; and lacking money.
Read Also: Rental Apartment Guarantor in NYC
Explore properties in different neighborhoods to increase your likelihood of finding the right apartment for you. For example, you can find an apartment in the Bronx at half the price of those available in Manhattan.
So you must have understood how to determine if you can afford a rental apartment in NYC. And you must have also learned what to do if you can’t afford it. What do you think? Please let us know by commenting below!
If you are looking for rental apartments in NYC, feel free to contact us at 1-917-436-9219.