The Search

7 ways to get around a NYC landlord's 40X rent rule

By Emily Myers | August 10, 2021 - 2:00PM 

It's almost impossible for many New Yorkers to meet the steep income requirements usually demanded by landlords here.


With the median rent in Manhattan back to just above $3,000, you (and your roommates, if you have them) need to earn north of $120,000—40 times the monthly rent—and have good credit to successfully secure an apartment at that price. In Brooklyn, the median rent is about $2,700. Either way, it's almost impossible for many New Yorkers to meet the steep income requirements usually demanded by landlords here.

Renters with shaky credit or borderline incomes lost one workaround to assuage a landlord's concerns—putting down additional funds as part of the security deposit. Changes to the rent law in 2019 capped the security deposit at one month's rent. (The law was intended to reduce the amount of money landlords could ask for upfront but it complicated things for renters who don't meet a landlord's income requirements.)

However, another recent shift favors renters: More buildings are accepting institutional guarantors (a fuller definition is below). It's one of the impacts of the pandemic, says Adam Frisch, managing principal at Lee & Associates Residential NYC, a management company that represents small building owners in Manhattan. "We're seeing an increase in third-party guarantors to levels we've never seen before," he says. "It's a change that's here to stay."

It's one of several options to consider when you are looking for a rental but don't have the kind of salary that landlords want to see. For more details, read on.

[Editor's note: A previous version of this post was October 2019. We are presenting it again with updated information for August 2021.]

1. Find a personal or institutional guarantor

A personal guarantor is someone who will co-sign your lease and pay the rent if you don't. They are generally required to have a credit score of at least 700, an annual income of 80 times the monthly rent, and if the landlord is extra cautious, reside in the tri-state area (New York, Connecticut, or New Jersey). 

Eric Hamm, senior managing director at Citi Habitats, says there's an increasing emphasis on guarantors now that landlords and leasing agents can only take one month's rent as a security deposit. A guarantor can be a friend or relative or you can pay a company for this, an institutional guarantor like Insurent (a Brick Underground sponsor), which will guarantee the entire lease. 

In the past, Hamm says landlords were often reluctant to take third-party guarantors but that's beginning to change. Not only that, Hamm says he's seeing situations with an institutional guarantor covering a number of months of rent rather than the entire lease. "It's less coverage for the owner but it's a lower premium for the tenant," he says. 

However, Jeffrey Geller, vice chairman and chief operating officer at Insurent, points out any product "that does not guarantee the full-lease obligation will not be accepted by the vast majority of NYC landlords."

And you won't find this as an option at a small, mom-and-pop-owned buildings, Frisch says. It's more likely to be available at larger buildings in areas that have high vacancy rates, such ones in Inwood and Washington Heights, where he estimates over 50 percent of buildings are accepting institutional guarantors as a concession to renters. You'll also have luck in parts of Brooklyn and Queens that have not bounced back yet from the impact of the pandemic, he says.

2. Improve your credit score

Each landlord or owner has their own criteria when it comes to a credit score but most are looking for a number around 700, Hamm says. That said, landlords may be willing to look beyond the score if they need to fill apartments.

"At some point, they have to decide, do they have their line in the sand and have some of their portfolio vacant or are they going to look a bit deeper? They need to balance that risk and reward," Hamm says. 

If the reason for a poor credit score is that you don't have a credit history, the answer is to open some credit cards and begin making regular, on-time payments. If there are errors on your credit report, make sure they are corrected and get letters of explanation for any major issues like a lien or bankruptcy. One obvious way to improve your score is to begin paying off your debts, especially if they exceed 15-30 percent of your available credit.

3. Find a more flexible landlord

Searching for an apartment being rented out by a small mom-and-pop-type landlord or a condo owner (instead of a large leasing company) may provide an opportunity for some negotiation. 

For example, the owner of a one bedroom in Bed Stuy tells Brick Underground that a renter with good credit is more important to him than someone with a certain income. Another tip: Real estate listing sites allow you to adjust your search criteria to units that are rented out by the owner, or to those that accept guarantors, both of which will be helpful if you do not earn 40 times the rent and want to avoid more stringent leasing management companies.

Pro Tip:

Need help finding a landlord who is flexible about guarantors, work history, rental history, or "flexing" your space with temporary walls?  Place your search into the capable hands of Triplemint, a tech-savvy real estate brokerage founded by a pair of Yale grads in response to the frustrating apartment-search experiences of classmates and colleagues. Bonus: The agents at Triplemint are not only a delight to deal with, they will charge a broker's fee of 10 percent of a year's rent on open listings instead of the usual 12 to 15 percent if you sign up here

4. Leverage the seasonal advantage

Traditionally, the winter is slower for rentals so searching for an apartment from October through March, you may find a landlord who is more open to renting to you if you are just below the financial threshold.

"As we get closer to the holidays, there is less volume of people looking [for rentals] and an apartment that would be on the market for a few days in the summer can turn into a few weeks or a few months in the winter," Hamm says. If you are on the edge of the income requirements, apartment shopping in the winter might give you the seasonal edge.

5. Get a roommate (or two)

Sharing the burden of the rent with a roommate or two is an obvious solution. Hamm says depending on the apartment layout, he often sees three or four people looking to rent a two bedroom. In situations where two out of the four renters have the best financials, he says they will be the leaseholders and do a roommate agreement with the other tenants. 

"We recommend having a roommate agreement because everyone on the lease is jointly and severally responsible for the payments but the lease doesn't state who pays how much, so a roommate agreement clearly defines that," Hamm says. 

6. Explore co-living alternatives

Co-living companies offer the convenience of a furnished apartment with staples in the pantry and ready-made roommates—all for one monthly payment. Many companies vet tenants the same way traditional landlords do but you can find more flexibility as you shop around. At Common, one of the more established co-living companies, tenants still need to earn 40 times their individual portion of the rent. 

One important consideration with co-living companies is the legality of the operation. Make sure you do some the company is operating legally—you don’t want to find your building abruptly shut down, which is possible if leases aren't properly drawn up or the place has fire safety issues. 

7. Play the affordable housing lottery

Affordable apartments are available through a lottery system on NYC Housing Connect. You'll have to play the long game here: After you fill out an application it can take years to get a spot, but there are success stories—like Katherine, a single mom finishing her studies in the Bronx who won a two-bedroom apartment for $655 a month in a new building and Lee, a U.S. Navy veteran who won an Upper West Side studio for $444. 


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