Renting your first apartment is one of those big adult moments that most of us are totally unprepared for. I’ve lived in some pretty awful places in my time — and my mom has always complained bitterly that she wouldn’t have let me live there had she seen the place before I rented it. There was the one-bedroom in Boston with a crumbling kitchen and slanted floors, and a fourth-floor walk-up in Washington Heights where I was so excited by the idea of having a washer-dryer, I didn’t notice how gross the bathroom was (really gross). But I’ve loved all my apartments for one reason or another, even if they’re far from perfect. And I’ve been pretty lucky never to have a terrible landlord or crazy neighbors or roommates. That said, I’ve handed over large sums of money to relative strangers on the streets of NYC to secure a place, feeling pretty unsure that I wasn’t about to get totally screwed. I definitely could have been better prepared.
Ahead, Priya Malani, Refinery29’s financial expert, and I have outlined everything we wish we had known about renting an apartment — from prepping the paperwork to making sure you have renter’s insurance (it’s so cheap, this is a MUST). Some of this info is pretty big-city specific (NYC might be one of the craziest places to try to rent an apartment), but regardless of where you live, it’s good advice to consider.
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Housing costs are probably your biggest expense, especially when you live in a big city. Most financial advisors suggest you only spend 30% of your net income (that’s the money you bring home AFTER taxes) on rent, but that’s tough. Say you’re making $50,000 a year, which puts you in the 20% tax bracket (Priya’s being conservative here to make sure you don’t overspend). If you spend just 30% of your income on rent, you’ve got a monthly budget of $1,000. That can be really tight in NYC (or downright impossible, especially if you’re trying to live alone).
Priya suggests the 80/20 rule: Live off of 80% of your income (this includes rent, any loan repayment, bills, as well as expenses like your gym membership and Netflix) and save 20%. That gives you more wiggle room for rent, but it also means less money for other things. It’s up to you to decide how you spend your money. For some, paying higher rent to live in a certain neighborhood, or in a building with special amenities (door-person, washer/dryer, roof deck), or simply to live alone, is worth it. Other people might prefer a bare-bones living space and spend extra cash on something else. You’ll want to consider all of these things when deciding how much you can afford to spend on rent.
Many landlords also require your annual salary to be 40 to 50 times the monthly rent. So if you’re making $50,000, they’d be willing to rent you an apartment for $1,250. If you’ve got roommates, you can obviously go higher — if the two of you make $100,000 a year combined, you can rent a place for $2,500.
If you bring in a guarantor (more on that below), landlords require this person to have an annual salary of 80 to 90 times the monthly rent. All important factors to consider when you begin the apartment-hunting process.
You should also consider how much you’ll spend on a broker’s fee (in NYC, it’s as much as 15% your first year’s rent; when I was living in Boston, it was the equivalent of one month’s rent), as well as all the money you’ll need to put down before you move (first and last month’s rent, security deposit, move-in and application fees). These numbers can add up fast. If you and a friend are renting a $3,000 apartment in Brooklyn, your move-in expenses can be as much as $15,000 if you’ve have to pay a broker’s fee and all the move-in expenses. That’s an additional $1,250 a month you’re paying for the apartment over the next year.
Another way to make sure you can actually afford a higher rent is to try saving it each month. Say you’re paying $1,000 a month for rent right now, but for $1,500 you could get your own place. Spend a few months setting aside that extra $500 in savings, so you can see what it’s like to live without that extra cash. (Bonus points because you’re saving extra money, too.)
Illustrated by Natalia Spotts.
Obviously, it can be more expensive to live in certain neighborhoods. But sometimes, that extra expense might be worthwhile. It can be tough to know where you want to live if you’re new to a city, but your neighborhood can have a big influence on your life. There are lots of personal preferences to consider, but everyone should think about the following:
- If you drive, is there adequate parking?
- If you rely on public transportation, is there a convenient train station?
- Do you feel safe in the neighborhood?
- Are you close to a grocery store? Drug store? Gym? Other amenities you can’t live without?
Priya also points out that it’s good to think about transportation costs. If you live close to work, you might be able to spend more on rent because you’re saving on transportation. If you don’t mind a long commute (you use the time to read or listen to podcasts), you might be willing to move further away from the city and save some money on rent.
Then there are all the personal preferences that everyone has to consider on an individual basis. Maybe you love living somewhere up-and-coming, or you want a neighborhood that’s established and known for its safety. Perhaps you want to be close to friends or family or someone you're dating. Maybe you hate city living and you’re drawn to an area with parks. You know what you like; just make sure to keep it in mind when you’re apartment-hunting. And whatever you want, it’s important to explore the areas where you’re looking to make sure they have everything on your must-have list.
Illustrated by Natalia Spotts.
I’m not sure I could live without a dishwasher, but Priya has a good friend who spent six months on a work-study program without one, got used to washing dishes by hand, and ended up moving into a dishwasher-free apartment back in Brooklyn — and saving a lot in rent.
I also couldn’t live without laundry in my building, but if you hate doing laundry and like to drop your clothes off weekly at the local laundromat, then maybe that’s an amenity you can live without.
On the other hand, I don’t have a car, so I could care less about parking. Amenities (like budgets and neighborhoods) are personal, so you have to make these decisions on your own. Just remember: After you have that wish list, make sure there are a few things you’d be willing to compromise on. I hate electric stoves, but I put up with one for seven years because I loved the apartment so much. No home is perfect (as anyone who watches House Hunters knows); it just needs to be practically perfect for you.
Illustrated by Natalia Spotts.
Applying for an apartment in NYC is insane. In my early 20s, I tagged along with my then-roommate Katy as she looked for her own place. She found a one-bedroom (what my mom would call a "total dump") in Brooklyn that she liked. The real estate agent told us someone else was interested in it, and we needed to race back to the agent’s office in order to get Katy’s paperwork and deposit it first. We ran from Brooklyn to midtown, beating the other woman by mere seconds. Thankfully, Katy had all her paperwork in order, and she got the apartment. But, had she not been prepared, someone else would have grabbed that place quick.
It’s not always that nuts in NYC, but you should have all your paperwork ready to go before you start seriously looking. According to Compass, an NYC-based real estate company, you’ll need the following:
- Proof of employment letter, on company letterhead and signed by a company representative, stating your position, start date, length of employment, salary, and opportunities for bonuses
- If self-employed, a CPA letter stating annual income and source of income
- Last two pay stubs
- Last two years' tax returns: first two pages, including signature page
- Last two years' W-2s
- Two most recent bank statements (including checking and savings)
- Reference letters from or contact information for previous landlords
- Photo ID (driver's license, passport, etc.)
I think you can probably skip the reference letter from a landlord, but better safe than sorry. You’ll also want to check your credit history, to make sure you’ve got a good credit score. There’s a good chance your new landlord/the building management will run a credit check on you before they agree to rent you the apartment, and it’s likely they’ll charge you anywhere from $100 to $150 for the favor.
It takes a while to pull this all together, so take the time before you start your hunt, so you don’t get your heart broken by missing out on your dream apartment.
Illustrated by Natalia Spotts.
I’m the worst about asking questions. I get really shy about it, for some reason, or I forget altogether. But there’s no shame in asking questions — it’s better than not knowing the answers! This is where you’re going to be living; it’s important to know as much as you can about the apartment.
Some examples you’ll want to ask:
- What utilities are covered in the rent?
- Do I have to pay for my own heat and hot water? (If yes, that might change your budget.)
- Can I have a pet? Does it require an extra deposit?
- Is there a limit to the number of people who can live in the apartment?
- What community rules should I be aware of?
- Can I paint? Put nails in the walls?
- Who handles maintenance problems?
- Whom do I call in an emergency?
- How much money is required to move in? (First, last, security deposit?)
- What’s the penalty if I break my lease?
- Are there certain days of the week when I can’t move in?
- Do you require a certificate of insurance from my moving company?
Illustrated by Natalia Spotts.
I’ve gotten better at inspecting potential apartments after a bunch of mistakes over the years. I’ve battled low water pressure, insufficient outlets, no overhead lights, dirty tubs, and a fridge door that wouldn’t open all the way because it bumped into the stove. Don’t be me and spend all your time admiring the light pouring in through the big windows or debating where you’d put the sofa. Look for the following things before you rent an apartment:
- Run the water in the kitchen and bathroom and flush the toilet(s) to make sure everything works (and there’s adequate water pressure).
- If there’s a dishwasher or washer/dryer, make sure they actually work. Same goes for testing the stovetop and oven.
- Count the number of electrical outlets and make sure they are in good locations.
- Make sure there are enough closets for your needs.
- Open the windows and check that the screens are in good repair.
- Is there any obvious damage that you might get charged for later? (damaged countertops, scratched floors, etc.)
- What heat source do you have?
- Check that all the doors and cabinets open and close properly.
- Is there a working smoke detector?
- Look for signs of mildew in the bathroom.
- Look for signs of mold throughout the apartment.
Illustrated by Natalia Spotts.
How long do you plan on living in the apartment? Will the landlord agree to a month-to-month lease so you have some flexibility. Will he or she give you a better deal on rent if you sign a two-year agreement? Sometimes there is some flexibility when signing a lease, and it’s good to ask these questions.
Also, if you’ve got multiple roommates, it’s important to find out how many people are going to be on the lease. Sometimes it can be complicated to transfer a lease if one roommate leaves and is replaced by someone else. Some landlords will allow you to draw up separate lease agreements for each roommate. You’ll want to take all of that into consideration before you sign on the dotted line.
Illustrated by Natalia Spotts.
I hate reading legal jargon. My eyes totally glaze over. Doesn’t it seem like contracts involve more words than necessary? There must be an easier way to express this kind of info, but (in my opinion) lawyers and leasing agents love to make these things confusing so you’ll just sign and not really know what you’ve agreed to.
Here’s a link to a standard NYC lease. If you’re renting in D.C. or Houston or L.A., your lease is likely to look different, depending on the laws in each city (or wherever you live). Your lease should include some of those questions you asked your landlord/leasing agent earlier: Can you have pets? Whom do you call in an emergency? It will probably include other details, too, like who’s liable when the pipes burst or you set the kitchen on fire.
A few key things to look for when reviewing your lease:
- Who is on the lease? (As we mentioned, this is especially important if you have multiple roommates.)
- Does the lease include everything you agreed upon? If your landlord said it was okay to have a cat, but the lease says no pets, you’ll want to revise the lease before you sign (which can be as simple as crossing out the section and putting your initials next to it).
- What happens at the end of the lease? Can you renew automatically? - What happens if you need to break the lease? Will you be hit with a big fee?
- Are rent escalations built in?
Many cities and states have strict laws that protect renters, but it’s up to you to know your rights. NYC provides a thorough document that outlines tenants’ rights. It’s definitely worth a review anytime, not just when you’re starting your apartment hunt. Curbed has advice on what to do when your landlord doesn’t abide by these rules (hello, housing court). We all hope it doesn’t get that ugly.
Illustrated by Natalia Spotts.
Seriously, it’s so cheap, there’s no reason NOT to sign up for it. We’re talking around $30 a month. It will protect you from all the stuff your landlord won’t cover, and basically your landlord will only take care of building-related damages (like if a pipe bursts).
And there are plenty of examples of when renter’s insurance is going to come in handy. Say you leave the apartment without turning off the faucet and accidentally flood the apartment below you. Or your toddler does some bath splashing and floods both the apartment below you and the one below that. (I was the flood-ee in both these instances; it seems water damage is my curse in life.) This is where renter’s insurance comes in, so you don’t need to cover the repair expenses out-of-pocket.
It also protects you against theft (if someone breaks in and steals your laptop and flat screen), and some policies will cover off-site loss, like if your bike gets yanked while you’re out on a Sunday-afternoon ride, or you lose your engagement ring down the sink at work.
How can you pass up that kind of peace of mind for such a low monthly cost? And it’s even cheaper when you get your roommates to chip in — and they should!
Illustrated by Natalia Spotts.
This is a complicated question, but one I wanted to throw out there. A friend of mine recently moved in with her boyfriend, and they were denied an apartment because the landlord didn’t think they had enough in savings (together, they have over $40,000 in savings).
That combined savings is almost a 10% down payment on a home (in some areas, it’s more than!). It’s not quite enough to make this couple homeowners in Brooklyn, but before they pack up and move next time, they might want to take a hard look at this savings to see if it makes more sense to move into a place they buy. After all, if they rent a $3,500 apartment, after broker’s fees and security deposits, they’re easily putting down $17,000 or more that they won’t get back.
The New York Times has a fantastic rent-versus-buy calculator that’s worth playing with if you’re even beginning to consider home ownership. It’s definitely not for everyone, but each time you begin the apartment hunt again, it’s worth taking a moment to step back and consider whether or not you might be able to actually buy a place — and if that might make good financial sense.
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