After years of making college tuition payments, parents of newly minted college grads may find themselves facing another test this summer: Helping their kis find a New York City apartment.
We've already covered the basic of buying an apartment for your grown kid; today, BrickUnderground offers some tips on renting one. Here's what you need to know:
Best neighborhoods & buildings for "shares"
Due to the high price of NYC real estate, an apartment suitable for roommates--a.k.a. "shares"--will not necessarily have a 1-to-1 ratio of bedrooms to humans. Doubling, tripling, and quadrupuling up and in many cases subdividing space (more on that below) is the name of the game here.
However, not all buildings are "flex-friendly." Some landlords and management companies don't want the extra wear and tear on the apartment and--when repeated on a widespread scale--on the building itself that occurs when four adults share a space meant for one or two. Others are wary of their building taking on a post-college dorm atmosphere.
Neighborhood-wise, if you're looking in Manhattan, the areas of Murray Hill and the Financial District have many share-friendly buildings. (See also 10 of the Best NYC Neighborhoods for Recent College Grads.)
In general, high rises are often more friendly to sharing than walk-ups. One indication of whether a building looks favorably on roommates is its policy on the use of temporary walls to subdivide and reconfigure a space.
For more info on sharable apartments, see BrickUnderground's 6-Step Guide to Renting a NYC Apartment with Roommates.
Splitting up an apartment
These days, permission to install temporary walls--long used to subdivide a pricey apartment into bite-sized pieces--is harder to obtain from the Buildings Department and landlords following the deaths of two Bronx firefighters who responded to a fire in an apartment with illegal temporary walls.
One alternative is to use “bookshelf walls” or "wardrobe walls" which don’t extend all the way to the ceiling and are therefore likely to be considered furniture rather than a wall. Be sure to check with the landlord or managing agent in the building to see if such modifications are allowed. Do it before signing a lease, and don't take a broker's word for it.
If your child is planning to live with a roommate, he or she should sign a notarized agreement with the person whose name is on the lease. These agreements are legally binding and can be used in small claims court in a worst case scenario.
"A sublessee or a roommate should certainly have a written agreement, and the primary tenant should should make sure he or she either witnesses the other person signing it or has the agreement 'acknowledged' by a notary so the agreement can be used in court, " says real estate attorney Steve Wagner of Wagner Berkow.
Sometimes the lease-holder will add in provisions about smoking, pet limitations and other preferences, and those too are legally binding, says Wagner.
How to save money
One of the biggest places to save is by reducing or avoiding a broker's fee, which traditionally amounts to 12-15% of a year's rent.
Summer is the most difficult time of year to find fee-less or "no fee" apartment, but it's not impossible.
Begin your search online with one of the resources listed in The 8 Best Websites for Finding a No-Fee Apartment in New York. For best results, go guerrilla. Put on your walking shoes and scour your ideal neighborhoods for "for rent" signs. Chat up doormen. Reach out to your personal networks through email, Facebook, co-workers, and alumni groups. Get hold of a list of management companies and call them up to ask about upcoming availabilities that may not be listed anywhere yet. (See "How I Found My No-Fee Apartment" for real-life examples of guerrilla tactics.)
You can also look for a "low fee" apartment. On rental search site Naked Apartments, for instance, you can search for "low fee" apartments only, which pulls up no-fee listings as well as apartments with broker's fees of 0-9%. Or you can find a a broker who charges a lower-than-normal fee. BrickUndergrounders can take advantage of the corporate rates--typically around 10% of a year's rent--offered by our partner TripleMint, an upstart, tech-savvy brokerage founded by a pair of young Yale grads inspired by the dismal and expensive rental experiences of their classmates and colleagues.
The guarantor game
If your child doesn't earn an annual income of 40-45 times the monthly rent, they'll likely have to put down a hefty deposit (often in the 4-6 month range)--or you'll need to act as a guarantor, providing documentation that your annual salary is 80 times the apartment’s monthly rent, which works out to around $120,000 for a (cheap!) $1,500 per month Manhattan studio.
Guarantors don't need to be at the lease signing, but they need to send pay stubs, tax returns, a letter of employment and sometimes submit to a background check. If you're self-employed, a letter from a licensed public accountant and proof of taxable income will be required to confirm salary.
Most landlords will accept only one guarantor per lease--so if your child has roommates, you will be on the hook for the entire rent, not just your kid's portion.
If that's not very appetizing, or if you don't earn enough to meet the requirements or simply don't want to complete the intrusive application process, many landlords will accept Insurent Lease Guaranty--an institutional guarantor that can act as a guarantor for a fee of around 80 to 110 percent of a month's rent.
Timing it right
When it comes to New York City rentals, the early bird doesn't get the worm. The market is so fast and competitive that apartments are typically available only 30 days in advance of the occupancy date.
For the lowest prices and least competition, it’s best to search for an apartment during the winter--from November through February--says real estate agent Shannon Aalai of Citi Habitats. Inventory is higher and rents are typically at their lowest.
That timing doesn't often work out well for students who graduate in May, but if you live close enough to New York that your child could live at home for a few months, you may want to encourage that.
No matter what time of year it is, parents (and their kids) are encouraged to begin looking at listings about a month in advance of the move-in date.