Tuesday, October 7, 2008

The 11 things I learned from my first NYC apartment hunt

I'm 90% sure I'm going to move. I return to apartment searching so much wiser than last time I embarked. I really hope that the rental market will quiet down a bit. Hard to say right now though. In preparation I dusted off my old bookmarks and came up with 11 tips for your first New York City apartment hunt...

1. Unless you're looking for a really expensive apartment or don't have time to search for your own apartment, brokers are useless*.

While very useful for apartment purchases, brokers are such an unneeded middleman in the rental process. So why do renters still use them? The biggest reason is because they have access to the NYC realty database -- the registry that lists all available apartments for rent in the city at any given time. You can't access the registry unless you're a licensed real estate agent, so us normal folks are SOL. Another reason is that building management companies don't want to or don't have time to show an apartment to perspective renters. It's time consuming, it's a pain in the ass and the management companies just want the apartment rented already. For many building management companies it was less expensive during the boom to hire a third-party broker then it was to retain a full-time in house broker. Trends are slow to change and it's renters, not buildings paying broker's fees right now for the most part.

If you do view broker apartments, and hey I did my first time around, don't let them push you around. They're going to tell you the apartment is in high demand and pressure you to make a decision on the spot. Don't get pressured into a decision -- there will always be another great apartment. Try to stay as rational as possible (admittedly, I made an emotional decision my first time around). Negotiate their fee before you commit to an apartment.

The first time you talk to a broker they are going to make you come to their office and fill out an informational form. They almost never take you straight to the apartment. In fact half the time their ads are just teasers to get you into their offices -- the apartment listed doesn't actually exist.

*However, if you can find a broker employed by a management company that charges the mgmt company fees and not you, I say go for it. What do you have to lose?

2. It is possible to find an awesome apartment without a broker.

OK, so 70% of available apartments in NYC are broker-listed. Guess what, though? That leaves 30% that are not. I don't know what that works out to in terms of hard numbers but I think it's safe to say thousands of apartments rent on a yearly basis without a broker. Some are referrals (hey, I'm moving out of my apartment and I know you want to live on the UES, want to take over my lease?); some are through owner/management company advertising and some are through aggregate services (i.e. nybits or mlsupdate123). For me, the bad news was that if a management company had enough money to advertise their apartments on the subway or a website like Curbed it was probably out of my price range anyway. The good news is that owners/management companies still use tried and true tactics like putting a sign on the building. Seriously. Walk around a neighborhood like the Lower East Side or the East Village and you will see plenty of apartment available signs.

Web sites are a bit more of a crapshoot. Sites like Craigslist have a for rent by owner section, but many of the apartments listed actually have broker fees cleverly hidden. Or worse, there are many scam listings. Other sites like rent direct have an equal number of success stories as scam claims and require a fee to sign up. You can protect yourself though. If something looks too good to be true, it is too good to be true. If every 1Br apartment you see in Union Square costs $2400 but all of a sudden you see 1 $1650 apartment, be very wary.

To be successful without a broker, you either need to be very willing to compromise or very patient. If you aren't too tied down to a certain location or amenities or if you have a flexible move-in date and can wait until the right apartment opens up you are more likely to be successful without a broker.

3. Know the basics about the process.

Most brokers and management companies will require a deposit right away when you say you want to rent an apartment. Never give them more than $500 cash -- it could always be a scam and you don't want to lose everything. Ask for a receipt and make sure the deposit is refundable. Almost every building will run at least a credit check on you, which you have to pay for. It's around $75 per person and will be done for everyone on the lease, including guarantors. When you pay your security at your lease signing, it must be a cashier's check. It CANNOT be a personal check, a money order or a credit card charge. Cash is also not usually accepted. Be very wary of anyone asking for cash security deposits.

Likewise, be wary of shares with strangers. One common scam in recent years is people "renting out rooms" and for one month security deposit. Then you and five other people show up on move-in day, all for the same room, and realize you got shafted. The scammer has long since disappeared with your money. (I read about this in the Village Voice, but can't find the article link. To be updated if I can locate it.)

Most landlords require you to make 40x the rent. So if an apartment is $2000/month you need to make at least $80,000 annually before taxes. Some landlords accept guarantors, which are like co-signers on loans. If you cannot pay your rent, the landlord can go after your guarantor for the money. And go after them (and you!) landlords will. Family members are preferred and they need to make much higher salaries, sometimes as high as 80x the rent. Some landlords will not accept out of state guarantors.

Some buildings have rules about which days you can move in/out on. Make sure to coordinate with your management company as necessary. No need to start off on the wrong foot. Also check building policies on pets, quiet hours and the like. Co-ops will have stricter rules than rental buildings.

4. Things like which floor you live on, your exposure and how many windows you have matter.

Ever heard the term pre-war vs. post-war? Before I moved to NYC, I thought it boiled down to pre-war meaning old and post-war meaning new. But it's so much more than that. Pre-war buildings tend to have much thicker walls and concrete floors. What does that mean? Less neighbor noise. Believe me when I say it can make the difference between sanity and calling the cops. Post-war buildings tend to have more amenities like gyms, open floorplans and floor to ceiling windows. But they also have thinner walls and less soundproofing. Families tend to live in pre-war buildings, especially families with youngins. Pre-war buildings tend to be on the west side (UWS mostly).

Want to live on the first floor? Maybe you'll be lucky like me and have access to a private backyard, but maybe you'll also be lucky enough to have mice like me. Live near the water? Be prepared for water bugs. Live above a restaurant? It's potential for rats and cockroaches, hooray! You'll have less light in your apartment on low floors and probably anti-theft window guards which let in less light. It will also be cold in the winter on low floors. Up high you'll have more light but it will be sweltering both in the summer and in the winter when all the heat rises to you. If you live on a middle floor you should be considerate of your neighbors below and hope for the same from your neighbors above.

Also, FYI, apartments usually get larger as you move upstairs. So studios down low, then 1 BRs above them and so on. One way to try to cheat the noise factor is to rent a smaller apartment below a larger one or vice versa. This cuts down on the chance of your living area being directly above/below your neighbors, but does add the possibility of Junior's playroom being right above your bedroom.

If your apartment faces north, you will get very little direct sunlight. You may as well call your apartment the Batcave. The double whammy is a northern exposure with a building right against yours. Hope you like artificial light! Southern exposures, conversely, get tons of sun and can be blindingly hot in the early evening. Eastern exposures are sunny in the morning and dark later and Western exposures are the opposite (shocker, I know). Many people in NYC have apartments with a full wall (or walls) of windows, and many people do not put coverings on them. You can see everything that goes on whether you want to or not. Get used to it. Studios often have only one window in them. If you need to do a window A/C unit, that one window becomes a half-window. It sucks.

Last thoughts for this section: living on side streets is quiter than living on Avenues. If you live on a main thoroughfare like 79th St you will always have ambient noise like car horns. Apartments in the rear of the building are generally quieter. Apartments in the front of the building generally have better views.

5. Learn your real estate terms.

I've hit on this before, but it's worthwhile to learn how to translate apartment ads. An apartment described as "charming" is tiny. If it's described as "in a great location near x, y, z chic neighborhood" it's tiny and old and possibly gross. A Jr. 1 bedroom doesn't actually have a separate bedroom -- it's usually an alcove studio (L-shaped) or has french doors separating the sleeping and main areas. Convertible likewise means that it doesn't have permanent walls, so a convertible 3 BR is actually a 2 BR that could be made into a 3 BR if you put up a wall of some temporary kind (tenants can't legally add permanent walls to rental apartments). A Juliet balcony isn't big enough for you to actually go outside onto; it's basically decorative. A garden level apartment is below street level. Loft apartments doesn't usually mean one big open area like it would in other cities. In NYC loft usually means a raised sleeping area that you access via a ladder. No, I'm not kidding.

Rent-controlled apartments' rent never increases. At this point you will not find a rent-controlled apartment on your own. End of story. Rent stabilized apartments' rent can only be raised a certain percentage per year. The percentage is decided annually by the NYC Rent Guidelines Board.

6. Educate yourself about utilities, leases and the like.

All apartments in Manhattan include water and heat in their monthly rate (or at least, they should legally). Boroughs are a toss-up. You usually have to pay for your own electricity, gas (for cooking), cable, etc. Your landlord will usually provide an A/C unit. Many buildings do not have laundry facilities. Buildings have to be specially zoned to have a washer/dryer in the apartment. If there is no drain by the washer/dryer, it is illegal! RUN, don't walk the heck outta there.

You are only required to put down one month security and your first month's rent when you sign a lease for an apartment in Manhattan. Landlords may ask for more but you should refuse to pay any additional security fees.

Read your lease carefully. I cannot say this enough! Check for clauses about landlord entry, legal fees, damage fees and the like. It is so worth paying a lawyer $200 to review your lease to protect yourself. Security deposits are often lost because landlords invoke some dumb lease clause. You DO NOT have to sign the lease the landlord gives you. You are allowed to challenge anything that makes you uncomfortable. Once you sign that's it so read it carefully and get unfair clauses removed before you sign.

Do you know your tenant rights? Yeah, me neither. Not something that really gets handed out to you when you move in. But the city does have a couple of websites devoted to the matter. The NYC Affordable Housing Resource Center has information about public housing and what to do if you lack basic services like heat or hot water. The NYC Rent Guidelines Board decides on the rent increase for rent-stabilized apartments in the city. Renters hate them, landlords hate them...it's a no-win situation.

7. Explore the neighborhood you're considering before you check out listings.

Do you like carrying groceries 10 blocks? Me neither! So I'm pretty damn lucky that I have a nice grocery store 2 blocks away. Know what else sucks? Hauling your laundry 8 blocks to the nearest laundromat or laundry service. And it's so much fun walking 7 blocks to nearest subway station when it's 15 degrees outside and icy. If you enjoy loud pulsing beats every night til 2 AM then by all means take that apartment above the nightclub. Hey, living across the street from a school is great for concentrating during the day! That scaffolding outside the building next door to the one you're considering renting in couldn't mean construction noise, could it? Nah! Are you excited about the 2nd Ave subway line? Me too, but I sure wouldn't want to live on 2nd Ave on the Upper East Side right now. If you live on a low floor in a building above a subway line, your apartment just might shake every time a train goes by.

It's also worthwhile to research each neighborhood as a whole. Want a neighborhood that's quiet at night? Don't live in Soho. Want to be close to many of the cities' museums? Try the Upper East Side. Worried your neighborhood will be dead after hours? Don't live in midtown.

8. You DO NOT need a car in Manhattan. You DO NOT want a car in Manhattan, Sell it before you move here.

Your car insurance will triple if you park your car in Manhattan. It has a better than 50% chance of being broken into. It will cost the same amount as your rent to park your car for one month. Alternate side parking rules are nightmarish. Good luck fighting an NYC ticket.

Besides the logistical nightmares, it's totally unneccessary to have a car in Manhattan. Everybody delivers; the subway and bus systems are comprehensive and if you need a car to get out of the city services like Zipcar are great rental solutions. There are taxis if you need to satiate your vehicular cruising needs.

One more reason: it takes 1 hour to get from East 77th St to West 21st St by car anytime between 8 AM and noon, or 5 PM to 7 PM. I know from experience.

9. It takes forever to get your cable/internet hooked up.

Whether you choose Time Warner or Verizon FiOS, it will probably take at least a month to get everything hooked up correctly. In the summer peak moving season it takes a month just to get an appointment. Both companies are notorious for missing installation appointments, not having the proper equipment when they do come or installing things incorrectly. Most of their technicians do a great job I'm sure but bad stories spread much faster than good ones. I personally have two hellish Time Warner stories.

Once installed, your signal will suck sometimes for no reason. Lines across your screen, channels randomly fritzing out, your Internet connection crawling at high-peak hours or overnight. Your only action is to pray to the gods of the Internets for your fiber/cable to return. If you call customer service at either company, they will instruct you to unplug your unit, wait 30 seconds, then plug it back in. If that doesn't work they have to schedule a repair appointment...which the technician will arrive for with no information about what the problem is.

10. Become handy, because your Super/management company are going to be slow to fix anything.

Luckily my Super is very attentive so this is not actually a problem for me (my non-Super is a different story). But for most of my friends, broken fridges, leaky pipes and anything else that doesn't work will usually sit for as long as possible before the landlord actually takes care of it. Sometimes it's a matter of laziness, sometimes of ignorance, sometimes of business. It is always miserable for you, the tenant. BFF M had her fridge break, so she lost $50 worth of groceries. Her management company fixed it two weeks later but it broke a week after that and she lost another $50 in groceries. During your search it's a good idea to ask where the Super lives (in your building is preferable). If you live in a doorman building you're more likely to have a dedicated maintenace crew in your building as well.

11. Don't blow all your money on rent.

One of my biggest delimas was setting a budget. In NYC it's easy to blow 60% of your income on rent, especially if you're just out of school. So how much do you need to make to live in Manhattan? I would say at least $50,000 anually to have any semblance of comfort. I do have friends who do it for less but they are taking a huge risk or living 8 people in a 4 BR apartment, and who wants to live like that? Part of living in the city is experiencing the culture. Sure, lots of cool stuff is free but lots of cool stuff is so not free. You will spend more than you think when you live here. Either learn to control yourself or budget accordingly.

When you are making your budget, consider the following:
- transportation costs (Metrocard, taxi fares, etc.)
- health insurance costs
- taxes (live in NYC? your income gets taxed by both the city and the state)
- 401k/IRA/savings
- groceries (food is expensive in Manhattan) and eating out (ditto)
- utilities like electricity
- cable/internet/etc
- gym memberships
- other basic needs
- disposable income for clothing, concerts, going out, etc.
- delivery and tip fund

Subtract all or some of those things from your monthly income after taxes. That gives you an idea of what you can afford.

Additional resources if you're thinking about moving to NYC:
Wired New York City forums (very long thread at this point, but still very valuable)
Tips on apartment hunting from Columbia University
Ben Popken's thoughts on moving to NYC without going broke
New York Magazine's real estate section (though they seem to have taken down their neighborhood guide, which was awesome)
The New York Times' community guides (click on neighborhood in the community data links for more info)
OnNYturf (find a business near a subway station)
Google Maps
Flavorpill

Review sites:
Yahoo Local
Yelp

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