New York City landlords often require applicants to earn 40 times the monthly rent in order to qualify for an apartment in Manhattan. This may present a challenge as not every applicant can meet this income requirement. The use of a Guarantor is an alternative that landlords and tenants agree upon. Also, first time property renters are usually asked to provide a Lease Guarantor by the Landlords or Property Managers.
A Guarantor is a person, usually a parent or a family member, who will co-sign the rental or lease agreement with an
But like all things related to getting an apartment in NYC, signing a lease with a guarantor is not a simple process. Here’s how it works:
In most cases, landlords will require a Guarantor to make 80 times the cost of the monthly rent. Given the
Whomever you ask, here is an outline of the paperwork they will have to submit:
- At least four recent pay stubs
- Two years of tax returns
- Most recent bank statements
- Social security number, state ID, or passport
- Documentation of liquid assets like stocks, securities, and bonds
If you are uncomfortable handling your guarantor’s financial paperwork and personal information, you can opt to have them submit the information directly to the landlord or rental agency.
What If You Can’t Get a Guarantor?
In the event that there are no family members or close relatives who may act as Guarantors and undertake Guarantors’ obligations, there are different options available.
Companies like Insurent and the Guarantors have built an entire business on assisting apartment-seekers in meeting the Guarantor’s requirement. . For a small fee, they’ll act as your Guarantor if you meet certain qualifications.
The Guarantors requires a FICO score of at least 630, and an income requirement of 27 times the monthly rent annually.
If you don’t meet these exact guidelines, these agencies still may be able to approve you on a case-by-case basis if you contact them directly.
It’s important to note that the terms for both agencies differ slightly for non-U.S. citizens. Neither, however, require a U.S. credit history.
- U.S. Citizens: 60-90 percent of one month’s rent
- Non-U.S. Citizens: 95-110 percent of one month’s rent
The Guarantors Fees
- U.S. citizens: 4.75 to 7.7 percent of the annual rent for U.S. citizens
- Non-U.S. citizens: 7-11 percent of annual rent
Other Strategies If You Can’t Land a Guarantor
Offer to pay more money upfront: If you can’t find a Guarantor, one solution is to offer the Landlord or the Property Manager more cash up front, by either paying extra security deposit or a full year of rent. Laying out more money up front will certainly expose you to more risk, but it could make your application more appealing to landlords. Before making this offer, inquire with your Broker if the Landlord has a good reputation and also be sure your budget can handle the outlay of cash.