As I’ve mentioned before, I’m very picky about what I look for in a tenant, and chances are you aren’t it. (Sorry.)
Likewise, if you came with a broker, I’ll let you pass--because if you’re willing to pay $3,000 for a few hours’ work, you probably won’t be as patient as I’d like when things go wrong.
So what kind of tenants am I looking for?
College-educated single people (or couples beyond childbearing age) with significant human and financial capital, a practical streak, and a quiet, drug-free lifestyle. In fact, for that kind of tenant, I’m willing to take a significant discount from market levels.
My strategy for finding these renters is simple.
- I start advertising via past and current tenants and on Facebook.
- If that doesn’t work, I ask friends who work at highly compensated companies (law firms, banks, certain tech firms) to post my ad on their internal bulletin boards.
- Finally, I reach out to graduates of several different colleges to post on their alumni message boards.
Thanks to the artificially low vacancy rate produced by the city's rent stabilization program, I’ve never had to go beyond this. Within a week, I’ll have around ten highly qualified applicants, and I can go to stage two: The apartment showing and screening.
Here's what I ask about:
1. Why are you moving?
My default assumption--and the one that will always disqualify a renter--is that the tenant’s landlord is trying to get rid of her.
Is she moving because of a romantic mishap or a desire for a shortened commute? Good!
Moving out of her parents’ home? Meh… unless they were small-time landlords and she was the super. If she grew up in a doorman building, she probably doesn't know how small buildings work, and will be annoying to deal with.
Complaining about a 7% rise in the rent? Bad … because good tenants of small landlords very rarely get that kind of increase.
2. How do you plan to use the apartment? Who will be living there?
My ideal tenant is an anti-social single bald male with a good job and plenty of savings.
This minimizes parties, eliminates shower clogs, cuts down on the hot water usage, produces a quiet house, and helps ensure that paying me is his highest priority.
Couples tend to be less desirable because they put double the wear and tear on the apartment without any increase in rent, use a lot more water (which I have to pay for), can be annoyingly vocal in their lovemaking, and often produce children or split up, which means that many aren’t great long-term tenants.
Because of the arrangement of the rooms in my apartments, they don’t work well for parents with children or shares, though technically, I’m not allowed to explicitly discriminate against them (or women for that matter).
3. How much money do you earn?
Unlike most NYC landlords who require an income of 40x the rent and a high credit score, I don’t think that this is a particularly good predictor of tenant success.
I generally require 30x the rent as well as seven months of rent in liquid assets (signing a lease takes three). I also look at how those assets were acquired. Savings from income are good. Trust funds are less good, because they can be hard to garnish, and because they suggest that the tenant might blow through his savings and not be capable of earning a decent salary. Credit card advances are not acceptable, for obvious reasons.
On occasion, especially with older tenants, I’ll waive the income requirement entirely if the tenant has at least a year or two of living expenses saved, and a history of paying rent on time.
4. Can you provide contact information for your last three landlords?
I always ask for the last three landlords, and I talk to each of them, as often the last landlord is trying to dump a problem tenant onto me.
I’ll also check ACRIS, NYC's online ownership database, to make sure that the person who the applicant claims is the owner/landlord isn’t just a friend providing a good reference, and I’ll look for gaps in the applicant’s rental history that could be hiding an eviction or a bad relationship with a landlord.
While most references are good, occasionally I’ll get an over-the-top recommendation. "If I’d known he was looking, I would have saved an apartment for him" was my favorite.
5. Do you mind if I run a background check on you?
Because it is so hard to evict someone in NYC, and there is a small tribe of "‘professional" tenants who move into apartments, never pay rent, and live for free for up to a year, I like to know that the tenant hasn’t tried this before. I don’t charge all applicants a fee--just the ones I'm willing to offer the apartment to, and sometimes I just eat the cost of around $50. Some landlords have been known to set the rent low and charge 100+ people "application fees" of $100--I would never do that.
Once I’ve got a tenant lined up, I give him/her a few days to sign the lease, pay for the first few months upfront, and set a moving date.
I don’t allow "gazumping" (a uniquely British term which translates as something like swooping in at the last minute with a higher offer and making a mess for everyone else), and I’m usually willing to split the difference on an overlap period (e.g. when my apartment comes vacant in June, but the new tenant’s existing lease ends in July), as it allows for a more relaxed period of renovation and it makes the moving process easier on the tenants. (More on this in an upcoming column.)
Overall, I think that my process is fair to the tenants is low pressure, and very effective in getting the kinds of tenants that I want to live with.
It does, however, exclude the vast majority of the population from getting a chance to live with me, and it contributes to the gentrification of the neighborhood.
By the way, these last two can’t be fixed via anti-discrimination laws; only by ending rent regulation and enabling landlords to evict problem tenants quickly will we get a truly fair housing market.