Realty Bites

I have $100,000 in the bank but no income. Can I still rent an apartment in NYC?

By Brick Underground  | March 16, 2022 - 1:30PM 

Finding a guarantor is your best bet in this situation.

Emily Myers for Brick Underground/Flickr

Question:

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. Because I’m a student without a steady income, especially not the standard 40 times the monthly rent that New York City landlords require, will I have trouble qualifying for an apartment?

Answer:

When it comes to rental problems, there are lots of New Yorkers who would certainly envy this dilemma. Most landlords want to see that you are earning an annual salary of 40 times the monthly rent and even though your rental application won’t be a typical one, a six-figure lump sum in your bank account puts you in a pretty good position. 

Landlords may approach your situation in different ways, but finding a guarantor is probably your best bet to making them feel comfortable about a lack of income.

One important workaround is no longer an option for you: Landlords can’t take more than one month's rent as a security deposit on a rental. This is the result of changes to the rent laws a few years ago and it prevents renters from being asked to pay several months rent in advance if a landlord sees you don’t have a steady income or one that meets their requirements. 


[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 April 2021 and has been updated with new information for March 2022.]


Without a salary, the best bet is to find a guarantor, usually a parent or relative who lives in the tri-state area. They must earn at least 80 times your monthly rent so they can cover your rent and their own expenses, if you run into financial trouble.

If you don't have anyone to act as a guarantor, you can use an institutional lender, which offers the service and guarantees the lease for the landlord

Pro Tip:

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 ratewhere 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.

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 90 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. 

Long story short: You might have to shop around a bit more than usual but you shouldn't have any trouble landing an apartment.

Keep in mind, however, with that kind of money in the bank, and low interest rates, it might serve you better to use that cash for a down payment (and mortgage payments) on a starter apartment. Granted, it’s a seller’s market at the moment but it’s larger apartments that are in high demand so there are deals to be had on studios and smaller apartments. 

Buying may be the right choice if your budget can stretch that far and you think you are going to be living in New York City five years from now.

—Earlier versions of this article contained reporting and writing by Virginia K. Smith and Nikki Mascali.

 

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