I have $100,000 in the bank but no income. Can I still rent an apartment in NYC?
- Most NYC landlords want renters who earn an annual salary of 40 times the monthly rent
- Using a personal or institutional guarantor can allay a landlord's concerns about income
- Personal guarantors must typically show proof of an income that is 80 times the monthly rent
I want to leave my college dorm to rent my own apartment next semester. I’ve been saving up and have a trust from a family member, which will total $100,000-$150,000 by the time I’m ready to move. As a student, I don't have a steady income. Will I have trouble qualifying for an apartment?
When it comes to rental conundrums, lots of New Yorkers would envy this situation. Having six-figures in your bank account certainly puts you in a pretty solid position. That said, most landlords want to see that you are earning an annual salary of 40 times the monthly rent, so your rental application won’t be a typical one.
As such, landlords may approach your situation in different ways—some could look at your overall financial situation and approve you as is.
But without a salary, your best bet is to find a guarantor, usually a parent or other relative who lives in the tri-state area.
"Every landlord is different and some might be fine with the numbers but others want a guarantor no matter what," says Daniel Kandinov, an agent at Corcoran who helps smaller landlords and individual owners screen rental applicants.
Just know that not all buildings accept guarantors.
[Editor’s note: Realty Bites tackles your NYC rental questions. Have a query for our experts? Drop us an email. An earlier version of this post was published in March 2022 and has been updated with new information for March 2023.]
One important workaround is now off the table: You cannot offer to pay multiple months in advance in lieu of a steady paycheck. That's because landlords can no longer take more than one month's rent as a security deposit on a rental as a result of changes to the rent laws.
How does a guarantor work?
According to Michael King, sales and leasing manager at NYC-based Mirador Real Estate, in the current market, landlords are asking for a guarantor to make 80 times the monthly rent annually in order to be approved so they can cover your rent and their own expenses, should you run into financial trouble. That can be a tough hurdle to clear.
On the bright side, if you don't have anyone who can act as guarantor (or who can meet that threshold), King says more and more landlords are accepting institutional guarantors.
Need help finding a landlord with flexible requirements? The rental experts at The Agency, a Brick Underground partner, know exactly where to look. If you sign up here, you can also take advantage of The Agency's corporate relocation rate—where you'll pay a broker's fee of 10 percent of a year's rent on open listings instead of the usual 12 to 15 percent. Bonus: The agents at The Agency are a delight to deal with.
For example, Insurent Lease Guaranty (a Brick Underground sponsor) will qualify renters if their annual income is a minimum of 27.5 times the monthly rent. The company also guarantees renters whose cash assets or marketable securities are a minimum of 45 to 50 times the monthly rent.
“If renters don’t meet either of these tests, Insurent will qualify renters with parents that have a minimum of 50 times the monthly rent in annual income or a minimum of 80 times the monthly rent in cash assets or marketable securities,” says Jeffrey Geller, Insurent’s chief operating officer.
“In this case, the one-time fee for Insurent for a 12-14 month lease could be as low as 75 percent of a month’s rent,” Geller says.
Guaranty fees are generally between 65 percent and 85 percent of a month's rent for U.S. renters, 90 percent to 110 percent for non-U.S. employed renters without U.S. credit history, and 98.4 percent of one month’s rent for international students.
Another option you may want to consider is looking for an apartment in a building that’s run by a mom-and-pop landlord, as opposed to a larger-scale management company. These small landlords are sometimes more willing to work with a unique situation like yours.
The ultimate takeaway
You may have to shop around a bit more than usual and be strategic in getting your application in tip-top shape.
"My advice for people searching is to use an agent that is tapped into the market to find the best option as soon as it comes up," King says. "The inventory is still pretty low so if you are looking for a landlord that accepts specific guarantors or third-party guarantors you will want to be first in line."
Kandinov recommends lining up a guarantor just in case—and before you even begin searching—so you don't end up losing that dream apartment because of your lack of income.
"The rental market is competitive, so even if you might not need a guarantor, you want to come out with a rock-solid application and put yourself in the best possible position," he says
—Earlier versions of this article contained reporting and writing by Virginia K. Smith and Nikki Mascali.
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