What is a “convertible 2 bedroom”?
In Manhattan space is very limited. A real two-bedroom apartment is an apartment with two bedrooms, a kitchen and a separate living space. A convertible 2 bedroom is a one-bedroom apartment that has potential. It has space to allow you to cut the living or dining space in half with a wall to make a second bedroom. A “real” two bedroom apartment (which, as noted by the word “real,” actually has two bedrooms) can run over $4,000, while a convertible 2 bedroom in the same building, all things being equal, would probably then be priced around $3,000. Most of the people I know who live in Manhattan live in convertible 2 bedrooms, 3 bedrooms, or 4 bedrooms. This is pretty much the norm. With that said, building “walls” is a huge business in New York. You can either “rent” a wall for the year from a “wall building company” (I am not kidding,) which on average is about $1,100-1,500. Or you can pay someone to build a wall for around the same price. However, most management companies are locked into one “Wall Building Company” and you will have no choice but to use that one. I’m certain that your mouth has dropped open. Get used to this kind of thing. It’s New York.
How do you build a wall in an apartment?
You can build a wall by either hiring a private contractor or calling a “wall-building company.” These walls cost anywhere from $700 (private contractor) to $1500 (company). Usually management companies have agreements with certain “wall- building companies” and you have to use who they recommend. The “wall building” companies tend to build only pressurized walls which are easy to take down. You technically “rent” these walls for the duration of your lease and if you leave the company will come and knock them down regardless if the next tenant wants to keep that wall up. Because it is “rented” they can do this thus making the next tenant pay the same hefty fee you did the year before. It is a growing monopoly and in my opinion not fair of the management company to make you use their “recommended” companies.
What is a guarantor, and do I need one?
A guarantor is someone who is legally responsible for your payment of rent if you default on your rent payment. Most management companies or individual owners want your guarantor to be related to you, usually in the immediate family, so that in the event of a default, they will more easily be able to collect. There are always exceptions. Your guarantor will be subject to the intense scrutiny of any rental applicant, and will be required to be on the lease. They will need the same paperwork as you would listed above in question 17. Please keep in mind they will need an additional credit check and application fee for your guarantor.
Reasons you need a Guarantor:
1. Poor credit
2. Low income, annually making less than 40 times your monthly rent,
3. New Hire- You could make $500,000 a year but if you have been working at your position under 1 year or 6 months they consider you still a risk and would want a guarantor.
4. Student ( you make no money, you need a guarantor) Things you should know about guarantors:
1. Your guarantor should make a salary that is more than 80 times your monthly rent.
2. Some management companies will only take in-state guarantors (someone from New York) or tri-state guarantors. (New York, New Jersey, Connecticut) Why? Because out of state guarantor’s can be difficult and costly to collect from should you default on your rent. Inquire with the particular company or landlord for specifics.
3. As much as management companies say they will only take in-state or tri-state guarantors, most will bend the rules and take an out of state guarantor as long as they qualify financially.
NEW!!! If you don’t have a guarantor use INSURENT. Well, what is Insurent?
In market rate apartments, you may be required to put up significant amounts of security (3 – 11 months rather than the typical one month security) to rent the apartment. A new program – The Insurent Lease Guaranty Program – was recently launched which can act as an institutional guarantor for your apartment lease. This Program is already accepted by major landlords in the NYC metropolitan market. Assuming you have good credit and your annual compensation is a minimum of 27.5 times the monthly rent (substantially lower than the 40-50 times of the monthly rent often required by landlords), the Insurent Program (www.insurent.com) can pre-qualify you in less than 2 hours after filling out the interactive application. After validation of your employment and payment of the guaranty fee which represents a small percentage of the annual rent (approximately 66-78% of one month’s rent), the landlord will receive an Insurent Guaranty for your one year lease. Even if you have an individual co-signer/guarantor for your lease many parents who could financially qualify as guarantors may opt to utilize the Insurent Program and pay the guaranty fee for their son or daughter to avoid subjecting themselves to the burdensome, time-consuming and invasive process of providing 3 years of tax returns, net worth statements, brokerage reports and bank statements required by landlords.
What is a sublet? Is it the same as an assignment?
A possible opportunity, that’s what a sublet is. But, technically speaking, a sublet is when you lease an apartment from someone else who is already leasing it. Simply put, you rent from another renter. Why would someone rent an apartment and then re-rent it to you? Probably because that person need to get out of the apartment, and that could be for a variety of reasons: he or she has rented a bigger or a nicer place, the person bought a home, he or she is moving out of town, etc. In these instances, you might be able to negotiate a significantly lower rent with the individual, because that person most likely needs to move, and like you, he or she most likely can’t, or at the very least, doesn’t want to, pay two rents. So, if that person can recoup a portion of the rent (or all of it), that would be a great deal for all involved. The desperation of another person translates to significant savings for you.
When subletting, be certain of two things. The first is that the person subletting the apartment has the authority to do so. Ask for a copy of the original lease and read it carefully. Look for any provisions that could prevent you from being allowed to sublet. Generally, there will be clearly defined clauses that state “no subletting.” Second, decide whether or not a sublet is what you want. You must be aware that when the original lease is terminated, so are all of your rights as a sublet. For this reason, you might want to consider an assignment. An assignment is the act of taking over another person’s lease. In this instance, you garner all of the same rights and responsibilities of that tenant, including all of his or her renewal rights, if any exist. You end-up paying the full rent for the place, but you also get direct access to the management company. When you sublet, the original renter, in fact, becomes your landlord, and any problems that you have with the place have to first go through that person and then to the management company. With an assignment, you skip the middle part. This direct access can save a lot of time in an emergency such as an overflowing toilet or a broken heating unit.
What is a floor-through apartment?
A “floor-through” apartment typically means that the unit occupies either the entire floor or half the floor in the building. If you walk from front to back on a side of building only one apartment would be occupying it.
Why do I have to pay more on a co-broke, what exactly is that?
A co-broke means that two different brokerage companies are splitting the fee (normally 50-50) you pay to rent that apartment. Typically one brokerage company has an exclusive on that property and then another brokerage company brings you the client to view that property. Even though your broker brought you to the apartment, the other broker gets half of the fee since they are the one showing the apartment. (Exclusive = an apartment can only be shown through one broker or brokerage company b/c that owner signed a contract with them) This means there are no reducing the fees because two companies are all ready splitting it. So your broker in theory only gets 25% of your fee that you paid. 50% goes to the other brokerage company and half of your brokers fee goes to the house, which in this case is their brokerage company.
What does it mean to sign with a management company rather than with the landlord directly? Are they one in the same?
They are one in the same. Most people refer to an individual owner or an owner of only a few properties as a landlord, but it is synonymous with management companies. Management companies are larger corporations that can own only a few units but typically own one or many buildings.
Do many landlords or management companies allow tenants to negotiate terms during lease signing?
This is a good question with no easy answer. It really depends on the landlord and the time of the year. You will have more flexibility with the smaller landlords, big management companies typically will never negotiate because of that whole supply and demand thing! Smaller landlords during the off season months can be negotiated especially if you are a great applicant. If however, you have slightly off credit and no guarantors, don’t expect them to do you any favors.