Author Topic: Question for apartment renters  (Read 5570 times)

undercover

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Question for apartment renters
« on: August 07, 2015, 09:22:00 PM »
I am looking to rent an apartment soon, if not a house. I'm just trying apartments first as they're generally cheaper.

I've never rented and don't really know what to expect.

I am currently unemployed but have rental + loan payback income. It is well above the 3X rule that most places use based on the prices I've been looking at, but I wonder if it will even fly since I don't have a W2. [edit] also wanted to add that I have plenty of savings, but I don't known if they'll care about that.

My GF would like to move with me but she won't have a job or any income at the time. I assume this will be a problem, though if I am held liable for rent I am not sure why. Can someone clarify this?

Obviously if I were to find a pretty relaxed landlord none of this would be an issue, and I may end up having to go that route if I find that most rental management places are too strict.

Thanks
« Last Edit: August 07, 2015, 09:32:40 PM by undercover »

lbmustache

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Re: Question for apartment renters
« Reply #1 on: August 07, 2015, 10:04:42 PM »
As long as you have some proof of income you should be okay. I have never given a landlord a W2. Just copies of paychecks or proof of other income.

They will most likely run a background check on your GF but couldn't care less about her income. As long as you are renting and have the proof mentioned above it should be okay.

My preference is finding a good landlord over a rental agency, but that depends on your location too, I would think.

Dollar Slice

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Re: Question for apartment renters
« Reply #2 on: August 08, 2015, 12:06:40 AM »
Depends where you're renting and who from. The apartment I have in NYC required an incredible amount of paperwork and a very high income. I couldn't quite meet the income so they required my parents to co-sign and they had to meet DOUBLE the income requirements, because the assumption is that they would have to take over two housing expenses if I failed to meet it. It worked out to them needing to make over $210k/yr to co-sign on a 1BR apartment. They also required tax returns, W2s (income from investments didn't count at all towards the minimum income requirement) letters of reference from my employer and a personal reference and a landlord reference. Plus all of that from my parents for co-signing. We had to make multiple trips to notaries. It was insane.

This is probably some sort of extreme far end of the rental market though ;-)  My last rental I don't think I had to show much of anything... although that probably explains why I always had such shitty neighbors there. My neighbors in the new place are a dream come true, so I guess the intensive screening works.

undercover

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Re: Question for apartment renters
« Reply #3 on: August 08, 2015, 10:06:48 AM »
Thanks. That situation in NYC does sound a little excessive. I'm thinking once one gets good rental history under their belt then it becomes less strenuous?

Dollar Slice

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Re: Question for apartment renters
« Reply #4 on: August 08, 2015, 10:15:05 AM »
No, I'm 38 and I've been renting since 1999, with a perfect credit record and etc. NYC is just THAT crazy.

Dr. Pepper

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Re: Question for apartment renters
« Reply #5 on: August 08, 2015, 02:32:24 PM »
They will run your credit and want to see a job, with regular income, that is probably no less then 4-5 times the monthly rent. Ie if your making 2000/mo you will be looking at places with 400-500/mo rent payments. You will probably have to make a security deposit, which is usually the first months rent, this does not count towards the rent, its just an escrow to fund any damage to the property when you move out, outside of normal wear, which will be described in the lease.

mastrr

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Re: Question for apartment renters
« Reply #6 on: August 08, 2015, 03:33:37 PM »
I am a landlord and require 3x.  I need to see consistent income to lessen the risk of eviction and vacancy costs.  I request recent paychecks to verify income while also calling your employer.  "Relaxed" landlords are not necessarily good landlords.  If something breaks their sense of urgency may not be to your expectations.  However, being a part of this community normally correlates to being more anal than the rest of society.  But just like anyone here, I am trying to lower the risk of my future expenses.

Your GF on the lease doesn't matter if she doesn't have any income.  If you put her on the lease she is liable, if you don't she's not.  Usually people put their partners on the lease to get their income requirement where it needs to be.  If you meet income requirements and she intends to get a job this makes me happier because you will have less of a chance not being able to pay.

yhakatan

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Re: Question for apartment renters
« Reply #7 on: August 08, 2015, 04:28:30 PM »
I've had great experiences renting from individual landlords, rather than management companies, especially if you can rent someone's condo. If you're a responsible tenant, a good landlord won't raise the rent nearly as much as a management company. And it does get easier to rent as you establish a good history.

FWIW I just moved from Chicago to NYC and the apartment market here is absolutely insane. I had to present all the docs mentioned earlier, plus paying a broker just for the privilege of seeing the apartment.

Samala

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Re: Question for apartment renters
« Reply #8 on: August 08, 2015, 11:05:23 PM »
Set aside this afternoon, then go grab a hammer and a bucket of rusty nails and pound them through your hand.
Now you know.

Amen.

The process of securing an apartment doesn't have to be terrible, but frequently it's a PITA.  I've done houses and apartments, private landlords and management companies, and I have to say I prefer apartments run by larger companies.  Getting maintenance and issues solved is a snap with my current apartment whereas my private landlords usually took considerable time (not always their fault really) coordinating resolutions for issues.  Renting a house was lovely but I was always in older homes that were really inefficient for utilities and lawn care issues drove me crazy.  Even though I prefer apartments, a few drawbacks:

- 3x is about right for many places but 4x often used by nicer/newer properties; I've never heard of anyone applying for an apartment without employment.. a friend who freelances had to provide bank records to prove her income from projects
- nearly all apartments I've seen in last four years require that you carry renter's insurance (you want to anyway really, but they will insist on seeing paperwork proving you have a policy)
- be aware that fees are often tacked on with apartment complexes that you likely would not see with a house or a private landlord, things like: trash removal - often marketed as "valet" service and can easily go $25-30/month and isn't optional, key fees for miscellaneous amenities, even a fee for billing you each month for your rent/utilities
- many apartments seem to be hooked to only one provider for utilities (particularly internet/cable) which can mean you pay more for lack of other options, in some cases cable TV is "included" in rent and you cannot opt out to avoid paying for it
- pets: seems standard these days is to heavily restrict breed/size, require veterinary paperwork proving vaccination history, charge a monthly fee ("pet rent") or a substantial deposit/fee at lease start
- references: Vee mentioned these and I'll confirm they seem pretty standard around here too, both personal and from previous landlord

So, when crunching numbers and researching, those are a few things I'd ask about so you know real true cost.

>Sarah
« Last Edit: August 08, 2015, 11:10:21 PM by Samala »

pancakes

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Re: Question for apartment renters
« Reply #9 on: August 09, 2015, 12:31:22 AM »
I live in another country however I have never had issues securing a rental even while unemployed (with partner working part time).

Having cash/assets I have found is even better than having an income from a regular job. I alway pick my supporting documents in such a way that we demonstrate that we have the means to cover rent for the lease period without an income. It shows you can manage your money. I typically bargain for lower rent in my application too and so far have always signed for lower than the asking rent,  ymmv depending on the market at the time.

It doesn't hurt to chat to the owner/agent about your situation, how it is different to the typical applicant and also how it might be better for them - e.g. you are a landlord yourself so will [probably] respect the property, you have the means to pay rent but not through a typical income, etc.

Bumbling Bee

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Re: Question for apartment renters
« Reply #10 on: August 09, 2015, 06:42:24 AM »
I've had great experiences renting from individual landlords, rather than management companies, especially if you can rent someone's condo. If you're a responsible tenant, a good landlord won't raise the rent nearly as much as a management company. And it does get easier to rent as you establish a good history.

FWIW I just moved from Chicago to NYC and the apartment market here is absolutely insane. I had to present all the docs mentioned earlier, plus paying a broker just for the privilege of seeing the apartment.

I also had to provide multiple bank statements and copies of cashed rent checks, even though they called my current landlord and ran my credit report. And the markets are crazy competitive here - if you don't have all your documentation on the spot, you could lose an apartment to someone who has a complete application packet.

Did they charge you prior to signing the lease?!? I've only ever had to pay once I decided to take an apartment.


Need2Save

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Re: Question for apartment renters
« Reply #11 on: August 09, 2015, 08:59:46 AM »
This question gets me to thinking about our current plans once we are ready to RE.  We are planning to sell our house (because we live in a crazy tax heavy state) and invest these funds while we 'sample' different parts of the country to decide where we may want to settle down after RE.  Aside from obvious travel we take prior to RE, we may want to pursue short-term rentals in the one-to-three month range to really test out different cities/towns.  Experience parts of the area you can't get from a weekend or week-long visit, you know. 

Does anyone have specific advice on the best way to find these short-term rentals once we no longer have regular jobs (no more W2s) etc.  During this period we'd be living off our taxable savings with some investment income, of course, but probably not very predictable.  We'd be way too young to be collecting SS and won't be drawing from 401k/IRAs yet either.   Is there such a website or service that focuses on this market?  Furnished or partially furnished would be ideal so we don't have to lug our junk around with us until we decide what feels right for us.  We are very familiar with VRBO already but we may wish to check out places that one may no consider 'vacation' destinations per se.  Thanks for any thoughts you may have.

Need2Save

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Re: Question for apartment renters
« Reply #12 on: August 09, 2015, 09:50:02 AM »
Very interesting. Thanks for sharing. Sounds like the vacation rentals is what you are focusing on.  I guess if we plan to wriggle in some international travel during this time as well, this would provide the easiest path to quickly get in and out of places.

We have a dog too, but sadly, don't know if he'll still be with us when this part of our plan kicks in (unlikely considering his age).  We figure we'd be between pets during this period to increase our flexibility and then we hope to have more of pets once we settle in.  Our dogs have always been a significant part of our family.
:-)   

CanuckExpat

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Re: Question for apartment renters
« Reply #13 on: August 09, 2015, 03:56:44 PM »
This question gets me to thinking about our current plans once we are ready to RE.  We are planning to sell our house (because we live in a crazy tax heavy state) and invest these funds while we 'sample' different parts of the country to decide where we may want to settle down after RE.  Aside from obvious travel we take prior to RE, we may want to pursue short-term rentals in the one-to-three month range to really test out different cities/towns.  Experience parts of the area you can't get from a weekend or week-long visit, you know. 

Does anyone have specific advice on the best way to find these short-term rentals once we no longer have regular jobs (no more W2s) etc.

I've rented before where they've accepted bank account statements with balances in addition/instead of pay checks. This might be more common in places that deal with international students, relocation and such, but I wouldn't find it too surprising to find it elsewhere. If a place rents for $1000/month and you can verify you have $100,000+ in the bank, I wouldn't think you'd be that much of a non-payment risk just because you have no income.

Another thing that might work well in this situation is looking for people who want to temporarily sublet their apartment while they are gone. Oftentimes you can also get a better price, especially if you are looking in a tight rental market and end up subletting a place that has rent control. Craigslist usually has a good listing of people looking to sublet their apartments temporarily.

Finally, one thing that might be worth considering is AirBnB and the like. It could be more expensive then a standard rental, but it would let you try out places in multiple neighborhoods if you want. I've known people who have gotten temporary contract gigs in hot rental markets, and instead of dealing with the hassle of finding an apartment, they string together a series of AirBnB stays. Then all you need is a credit card, and there is none of the hassle of dealing with rental. Sometimes you can also get lucky and find a relatively good deal. For example, when someone starts hosting for the first time, it isn't uncommon for them to list their place cheaper in order to garner many reviews in a short amount of time. Also, shameless plug, if you don't already have an account and open one through a referral link, you get a $25 credit on your first stay.

RyanAtTanagra

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Re: Question for apartment renters
« Reply #14 on: August 10, 2015, 06:59:57 AM »
I once got a new rental (one year lease) with my gf when I was on unemployment and she was in school full time and was getting minimal expenses paid by a family member (off the books), so we had very little 'income', but we had savings to pay the entire years rent if needed.  They never asked for bank statements but I offered to pay for an extra 'financial security deposit' of a full months rent on top of the first month + full month damage security deposit.  The landlord seemed to think anyone willing to write a check for 3 months worth of rent without batting an eye was probably ok.  So that may be an option as well.

sstants

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Re: Question for apartment renters
« Reply #15 on: August 10, 2015, 09:26:14 AM »
Renter in Boston here. We have some crazy requirements here as well and a broker fee is pretty standard unless you are renting in a large building through the rental office.

I've gotten some good apartments by simply doing the following:

Communicating promptly and clearly with the rental agent/owner and being honest.
Providing accurate information/forms to them quickly. 6-8 hours turnaround.
Hand-delivering checks when asked.

I've never had to provide proof of salary beyond my testament to what I earn and have never been asked to disclose any assets. I'm sure there are places that require this standard, but I think I avoided it because I came across as a very reliable person. I know my credit was run, but that's about it.

FiguringItOut

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Re: Question for apartment renters
« Reply #16 on: August 10, 2015, 11:47:22 AM »
I just moved 1.5 months ago to a NYC borrow, not Manhattan though. 

I had to provide my credit report, last year's tax return, last two paystubs, and bank statements.  They were looking for credit score above 700 (mine was 830), income of rent*40 ( I was few thousand short for this), and general credit history and bank accounts.  I had a healthy balance in my bank account, so got apartment with no problems.

I had to pay first month rent, deposit, and broker fee which was 10% of annual rent.  All in all, a little over three rents. 

HopefulMustache

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Re: Question for apartment renters
« Reply #17 on: August 11, 2015, 09:25:44 AM »
For me as a renter in a pretty competitive area, the hardest part was finding an apartment in the price range/neighborhood I was seeking. I was certainly looking for a certain combination, but anything that popped up on craigslist in the morning was rented by the time I got off work. The ones I've gotten were the ones I took some time off in the middle of the day to go visit/rent.

Around here I think the norm is that rent shouldn't be more than 30% of your income, so roughly the 3x rule. Sometimes it will be standard to ask for first month's rent, last month's rent, *and* a month's rent in security deposit at the time of signing - I imagine that even if your income situation is unusual if you can provide that up front it will go a long way with the landlord.

There is often a broker's fee of 1/2 of 1 full month as well, but private owners and landlords often handle the renting themselves and don't bother with this. I've never been asked to provide proof of income, but have also never been the sole earner guaranteeing a lease. As others have said, having your GF on the lease shouldn't hurt since the key metric is net income. If her credit is completely shot it might be a wrinkle of some sort though, not sure.

Also, a mustachian side-note - this may not be the case in every state, but here landlords must technically carry your security deposit in an interest bearing account, and return it to you with interest when you leave. So don't forget to ask for your extra pennies :).