In New York City, Tenants Have to Prove They’re Worthy

By E-Renter Tenant Screening
Posted on July 16, 2011 under General | Be the First to Comment

New York City is known as a tough place to be a landlord, with tight rent controls; it’s also a tough place to be a tenant, with tiny apartments at sky-high rents and plenty of competition for even an eighth-floor walkup with a nice view of a brick wall.

The vacancy rate in Manhattan is near zero, so landlords can be as choosy as they want. If you’re a landlord in the rest of America, you might be surprised to see the typical paperwork a prospective tenant in Manhattan must produce in order to be taken seriously.

While most landlords like to see pay stubs and references, and will run a tenant credit check and background screening, New York landlords require a gross income between 40 and 50 times the monthly rent. In addition, they will likely ask prospective tenants for bank statements, tax returns and proof of employment.

What else should the tenant be expected to produce on the day they view an apartment? A check for the first month’s rent, the security deposit, and a broker’s fee of 8 – 15% of an entire year’s rent.

Without all the paperwork and high enough income, would-be tenants can kiss an apartment goodbye. Of course, paying several months’ rent up front can ease that situation, as well as help tenants relocating from overseas secure an apartment without an established credit history in the U.S.

Another option for tenants is to contact a lease insurance company. For a fee of between 75 – 85% of a month’s rent, the firm will cover a tenant’s rent if they stop paying and the landlord obtains a judgment.

As for the rest of America, the landlords we know require each prospective tenant to provide:

Proof of income (pay stubs, income tax returns, etc.)
Last two rental residences and landlord contact information
Place of employment and reference contact information
Personal references and contact information
Co-signer information, if applicable
Permission to run credit and background checks

No matter where you own rental property, why not be as careful as Manhattan landlords, and ask tenants for more paperwork than you think you need? You could end up with better tenants than you expected!