Surviving the Rental Crunch: How to find a place to live when pickings are slim
A tighter-than-usual market this spring is making it extra difficult for renters to find new digs, experts said.
“Prices are escalating and demand is high and we don’t have a lot of new product coming right now, so it’s definitely going to be competitive,” Citi Habitats President Gary Malin said, adding that the rental market is at about a 1% vacancy rate.
Lawrence Zhou and Lee Lin, co-founders of RentHop.com, which sorts rental listings according to their quality, said that real estate developers put their projects on hold during the economic crisis because it was harder to get loans from banks to finish them.
Developers were also nervous to take out loans because rents were so low during the recession that they worried about paying them off, Zhou and Lin said.
“And now I can actually say that rents are higher even than the 2006, 2007 highs,” Lin said. “It’s a sign of a lot of economic recovery.”
So with rising rents, limited inventory and many renters looking to move, the challenge of finding a place can seem overwhelming.
Our experts, however, offered tips to help you get what you want this season.
“Timing is everything,” Malin advised. He said to look within the month before your move date — i.e., now, if you want a new place for July 1.
“If you come in too far in advance, you’re going to see there’s not much to look at,” he said.
Also, bring your bank and income statements, money and other paperwork with you when you view apartments.
“You’re not going to be given much time to do this,” Malin said, “so if you have to scramble to get these things accomplished, it’s very unlikely you’re going to get the apartment you want.”
He added that if you’re working with a broker, be upfront about everything — such as if you have a car to park, a dog or bad credit.
“The more information you can provide the person you’re working with, the easier it will be for that person to make your search process very easy and effective,” Malin said. Mark Menendez, head of Manhattan rentals at Douglas Elliman, said to go about the process with a flexible attitude.
“People tend to compromise a lot more on what they’re wanting than what they need,” he said. “There’s a big separation between where they start out and where they end up.
“A sense of urgency out there and hustle are the two most important things to find a deal.”
Where to look
Studios and one-bedrooms are in the highest demand this time of year, experts said.
“You get people sharing a one-bedroom,” Menendez said, “anything to carve out an affordable niche in the city.”
In Manhattan, he said, Union Square and Gramercy are hot right now. Prices are a bit more manageable in Hell’s Kitchen, the Financial District and on the Upper East Side.
Malin said that what ends up working for your budget may not be your original location choice.
He cited Long Island City, specifically the Queens Plaza area, and Brooklyn as places where the vacancy rate is not as much of an obstacle.
When it comes to Manhattan, Lin and Zhou agreed on the Financial District and suggested considering Murray Hill, Kips Bay and Midtown East.
Although the latter places are traditionally dominated by owners, Lin said many condos and co-ops there are owned by investors looking to rent them out.
“They just want someone who’s not going to cause any problems,” he said.
Sweeten the deal
Once you know where and when to look, and what to bring with you, it’s important to figure out how to become a more attractive candidate than other renters who are gunning for the same apartment.
“A piece of advice to be competitive is potentially ... offer a year’s rent up front or offer more than the list price,” Malin said.
Lin and Zhou agreed that, above all, landlords want tenants who can pay rent.
“The best indicator of that is someone whose income requirements meet and satisfy the 40-times-the-rent requirement,” Lin said. “No one should spend more than a third of their gross income on their rent.” Lin added that a guarantor is another way to appeal to a landlord, or use a service such as Insurent (insurent.com), which acts as a guarantor or co-signer for a small fee.
Current rental prices
-- Rents in Manhattan increased from $3,657 to $3,832 overall, from May 2012 to a year later
-- Rents in Battery Park City increased 4.28%
-- Rents in Chelsea increased 2.79 %
-- Rents in the East Village increased 3.04%
-- Studios in Greenwich Village, Midtown East and the Upper East Side decreased as much as 2.4%, roughly $60 a month
-- Rents in Brooklyn increased overall from $2,486 in April to $2,503 in May
-- Rents in Brooklyn increased from $2,407 to $2,503 between May 2012 and a year later
-- Rents for studios in Greenpoint dropped 10% from April to May, to an average of $2,416.
-- Rents for studios in Bushwick dropped 8.69% in May
SOURCE: MNS MAY RENTAL MARKET REPORTS