You’ve checked out the views from the roof deck and the variety of classes at the gym. You’ve examined the bike room and counted the pool tables in the game room.
Before you hand over your (substantial) check for a spot in a spiffy new building, here are a few questions to ask:
1. Is the building rent stabilized?
About a third of newly constructed buildings get tax abatements that require them to be rent regulated, says Phil Lang of real estate brokerage TripleMint.
This means that the state sets the initial rents at market rate and they are raised each year by a state-allowed percentage (this year, 4 percent). You won't get a bargain when you first move in, but you likely will if you stay a number of years, as market-rate rents outpace state-regulated increases.
Be aware that even in a rent stabilized building, the rent could go up more than four percent. Sometimes the state-mandated market rate, called the "legal rent," is higher than what the landlord thinks he or she can actually get. When this is the case, the landlord might charge a lower “preferential” rate in a soft market. If the market spikes following year, the landlord could jump back up to the legal rent (plus the state-allowed increase).
Another big advantage of living in a rent-stablized building: You generally have an automatic right to renew your lease every year.
2. Does the rent include amenities?
These days, new rental buildings may sport everything from state-of-the-art health clubs to rooftop pools, office centers, concierges who can score you theater tickets and restaurant reservations, cold storage rooms for Fresh Direct deliveries, golf simulators and temperature-controlled wine lockers.
Not all amenities are included with the rent, though, so it's important to find out how much you'll need to fork up for the privilege of using them.
Sometimes buildings will offer something like gym membership for free for a certain period of time--but sometimes you have to ask. Make sure you know when the deal expires too.
Other new buildings have amenity fees that run as much as $500 to $800 per year, says Lang. You may be able to opt out of the annual amenity fee, he says, but you usually can’t pick and choose among amenities. So even if you never plan to use the golf-simulator or office center, you’ll need to pay the full fee even if you just plan to use the fitness club.
3. What if my income isn’t high enough? Can I put down a bigger security deposit?
With new buildings charging top dollar, it may be challenging to meet the typical landlord requirement that you earn an annual salary of 40-50 times the monthly rent. If you don’t make the cut, some landlords allow you to put down a larger security deposit (say, four to six months rent).
However, landlords of rent regulated buildings are not allowed to take more than one month’s security deposit. In these cases, landlords will ask for a guarantor who makes 80-100 times the monthly rent.
If you don't have a well-off local firend or relative to turn to, you may be able to use a third party guarantor such as Insurent Lease Guaranty. The company will act as your guarantor for about 80% percent of a month’s rent (if you have U.S. credit) and 110% (if you are foreign with no U.S. credit).
4. Will my apartment be ready in time for me to move in?
Some developers begin renting out buildings before construction is complete and will include a rider with the lease stating that they can delay the move-in by a certain amount of time. So make sure to ask whether your move-in date is guaranteed.
“You might be enamored with the building, but if you’re on a very strict deadline you need to look elsewhere,” says Gary Malin, president of real estate brokerage Citi Habitats..
5. Will the building be a construction zone? Will the amenities be available right away?
Even if your apartment is ready on time, you may still be living in a construction zone during your first few months as the pool, gym and other amenities are completed. To compensate for this, often developers will give a discount on your rent, pay your broker fee, or give you some other type of compensation to make up for it, says Malin. Be sure to ask. And you may want to think twice about moving into a not-quite-finished building if you're around a lot during the day, when noise and disruption is likely to be heaviest.
Finally, remember that new is not perfect. Despite all the bells and whistles, new buildings can have some problems, particularly with regard to facade leaks, window leaks, wood flooring and more. (Take a look at our full report here.)
6. Can I put up a temporary wall?
Due to fire safety concerns and the desire to prevent extra wear and tear from additional tenants, most NYC buildings no longer allow temporary walls. A more acceptable alternative is to divide a room with bookshelf walls, which stop partway below the ceiling and can be customized with doors, bookshelves and even closets on either side.
New buildings aren't any more likely than older buildings to allow temporary walls, so it's important to ask a property manager/management company before you move in, if a wall is essential to you.
7. How tech-savvy is the building?
Many new buildings subscribe to such services as BuildingLink.com that allow tenants to do everything from post announcements for their neighbors and find out when the book club meets to put in repair requests and special instructions for the doorman. It also allows the building to contact tenants with information such as when packages have been delivered or if the water is going to be temporarily shut off.
Ask if the building is subscribed to an online system or if you’re going to have to discuss every maintenance request or package delivery with the doorman or management company.
If you're considering living on the high end of a high rise, ask about cell service up there, as it can be spotty several dozen stories above earth. Find out if the building offers a technological workaround, like a cellular base station that connects calls through a broadband network. And ask how much extra it will cost you.