Let's start with the basics. What is the cheapest apartment in Manhattan, right now? It's a studio on 1st avenue in east Harlem, and it's currently going for $925 dollars a month. Now let's think about this. How did the landlord get to this price?
Firstly, you all should be aware that I AM NOT AN APPRAISER. It is not my job to give an expert opinion on the value of an apartment; however, I can guess as to how this apartment got to this price. There are several factors to consider when determining how much you might pay for an apartment in a single area:
1. Location
2. Apartment Size
3. Views
4. Customer Service (doorman or not)
5. Access (elevator or walk up)
6. Apartment Quality
These items are listed in order of most important to least important. Surprising isn't it? You might figure that the quality of the apartment itself might be the most or 2nd most important thing under normal circumstances. But this is not a normal city. This is New York.
Now, anyone who has heard, read, or learned anything about real estate will know the first three rules of real estate investment: Location, location, location. Tedious, yes; however, this is a fact of life. Costs are going to change depending on what area you want, especially in this city. Lets say you take that same exact studio, lift it up, and smack it straight down in the center of Central Park South. How much do you think the cost went up? 200? 400? 800 dollars? I'd say something more like $1500, and I'm being conservative. That would bring the price of this studio to around $2500, just by changing locations.
Now let's say that this studio also has a view of the park in it's new location, and it's on the 10th floor now in a building with a doorman and an elevator. The price just went to $3250.
The cheapest apartment on Central Park South right now is going for 2400 dollars. The price was just cut down from $2600. It's been on the market for almost 3 months. The average amount of time a rental is on the market is about 2 weeks. Why is this apartment not renting? Well firstly, I'm betting, is that it has no view. It states that it has a southern exposure. And if it's on Central Park South, with the Park on the North side, then it's easy to assume there is no view. Second, it's in a co-op which usually has other costs associated with the apartment having to do with common areas; therefore, you will be paying more than the listed price of 2400 dollars a month. Third, the other downside of living in a co-op is the board approval which is notoriously difficult to get approval for. Finally, if you had 2400 dollars, why would you want to live in a pre-war building with no view in a small studio, when you could get an apartment on the Upper East Side, in a modern building, in a large studio with brand new appliances and a great view for the same price?
I have said it before and I will say it again, Manhattan, if you are renting on a budget, is a borough of compromise. Don't be stubborn about what neighborhood you want to live in. Listen to your broker, they have seen things that are much better that might not be on the Upper West Side but they are great apartments.
At the end of November, my lease is up. I will be searching for apartments on a budget. I am an agent so I have all the listings in Manhattan available at my fingertips. What will I do when I conduct a search? I will select every neighborhood in New York. I will give my price range, and I will go to each of these neighborhoods and see what's available. My new apartment might be a combination of great location and good apartment, or good location and great apartment, or terrible location and exquisite apartment.
The overall point that I am trying to make, is that when many of my potential clients come to Manhattan from out of town, and they are upset that New York prices are so high, they try and ignore this fact and ask for things that simply do not exist. If your broker tells you that you cannot live in an area for a certain price, do not be offended. They're not trying to squeeze more money out of you (if they're a good broker), they are trying to help! Ask what neighborhoods they would suggest! Let them conduct a search and see what they can find! Agents are professionals in their field and will know the market better than you do!
This is why it is so important to find an agent that you like working with, and that you trust. Agents have the inside lines to great apartments, and you are going to want their help.
"What is the best neighborhood for the cheapest price?" My money is on the Upper East Side, they have some great apartments for low prices. But that's just my advice! Ask your agent what they think!
More to come...
Friday, September 16, 2011
Thursday, September 8, 2011
Closing on a Rental
So, you've found the apartment you want. Excellent! After all the exhaustive searching, dealing with different brokers, etc., you've found a great apartment! So what happens next?
The first step to renting this apartment is putting down an application. What's an application? An application is a form filled out by the potential tenant, making your personal financial information available to the management company and/or landlord so they can make a decision as to whether or not you are financially viable to rent their apartment. You will usually be asked for your yearly salary, what your current occupation is, and how your credit is. They may even ask to view your bank statements if you are not currently employed, or if you are a foreign national. An application can cost anywhere from 50 dollars to 300 dollars.
Once you have put down an application and it has been accepted by the management company and/or landlord, there will be a small waiting period, usually around a week, sometimes less, and the apartment you are interested in will be held until your application is approved or denied. If it is approved, you can decide whether or not to go through with the lease signing, or decide to look elsewhere. You are not bound to the rental until you sign your lease!
How much time do I have to decide whether or not to put down an application on the apartment I really liked? It depends. But to be truthful, not long at all. I cannot tell you how many times I have had a client who absolutely loved an apartment, but waited to long to act. In New York City, great apartments go fast. Low budget, high budget, whatever your budget may be, great apartments go fast! If you find something you really like, act now. Forget about the cost of the application, and chalk it up to the cost of doing business, because all that hard work that went into finding that apartment, could be wasted very soon. I have taken clients out to see apartments they really like, and are ready to put down an application on, and while we were viewing the apartment, discussing whether or not the apartment is good or not, an application was being put down by someone else in the rental office. You don't have weeks to decide, or days for that matter. You have hours, or even minutes. Now this does not mean you should run around town, wasting money, putting down applications on everything you see; however, if you do find that one apartment, that as soon as you walk into a big smile comes across your face, and it just feels "right," act on that feeling. Don't sleep on it, that apartment will probably be gone by tomorrow.
Last, but not least, do not jeopardize losing the apartment that you like so much because your L-shaped couch won't fit in the living room. If you like the apartment, put down an application, and sell the couch. You are severely handicapping yourself by making it a requirement that all of your current furniture fits in your new apartment. It is difficult enough trying to find something you like, so don't add more struggle to your search by adding a living room that has to be big enough to accommodate ridiculously over-sized furniture to your criteria.
As I have stated before, Manhattan is a market of compromise. This is not Springfield, (add state here). Whether you believe it or not, Manhattan is the center of the real estate Universe. Everybody in the world wants to live here. It is on the list of the top 3 cities to live in, in the world. The point I am trying to make is that, there is always someone that is going to be hungrier, more excited, and more willing to take that great apartment for a reasonable price, than you are. The question is, are you ready to act sooner than them? Real Estate professionals have a saying in this city: "Apartments always sell." What this phrase means is that clients may come and go, but no matter what, an available apartment in New York will always rent or sell. So the next time you decide to sleep on it, instead of putting down that application immediately, take a step back, and ask yourself if you really want this apartment, because while your sleeping, someone else is acting.
More to come... Next Chapter... Renting on a budget...
The first step to renting this apartment is putting down an application. What's an application? An application is a form filled out by the potential tenant, making your personal financial information available to the management company and/or landlord so they can make a decision as to whether or not you are financially viable to rent their apartment. You will usually be asked for your yearly salary, what your current occupation is, and how your credit is. They may even ask to view your bank statements if you are not currently employed, or if you are a foreign national. An application can cost anywhere from 50 dollars to 300 dollars.
Once you have put down an application and it has been accepted by the management company and/or landlord, there will be a small waiting period, usually around a week, sometimes less, and the apartment you are interested in will be held until your application is approved or denied. If it is approved, you can decide whether or not to go through with the lease signing, or decide to look elsewhere. You are not bound to the rental until you sign your lease!
How much time do I have to decide whether or not to put down an application on the apartment I really liked? It depends. But to be truthful, not long at all. I cannot tell you how many times I have had a client who absolutely loved an apartment, but waited to long to act. In New York City, great apartments go fast. Low budget, high budget, whatever your budget may be, great apartments go fast! If you find something you really like, act now. Forget about the cost of the application, and chalk it up to the cost of doing business, because all that hard work that went into finding that apartment, could be wasted very soon. I have taken clients out to see apartments they really like, and are ready to put down an application on, and while we were viewing the apartment, discussing whether or not the apartment is good or not, an application was being put down by someone else in the rental office. You don't have weeks to decide, or days for that matter. You have hours, or even minutes. Now this does not mean you should run around town, wasting money, putting down applications on everything you see; however, if you do find that one apartment, that as soon as you walk into a big smile comes across your face, and it just feels "right," act on that feeling. Don't sleep on it, that apartment will probably be gone by tomorrow.
Last, but not least, do not jeopardize losing the apartment that you like so much because your L-shaped couch won't fit in the living room. If you like the apartment, put down an application, and sell the couch. You are severely handicapping yourself by making it a requirement that all of your current furniture fits in your new apartment. It is difficult enough trying to find something you like, so don't add more struggle to your search by adding a living room that has to be big enough to accommodate ridiculously over-sized furniture to your criteria.
As I have stated before, Manhattan is a market of compromise. This is not Springfield, (add state here). Whether you believe it or not, Manhattan is the center of the real estate Universe. Everybody in the world wants to live here. It is on the list of the top 3 cities to live in, in the world. The point I am trying to make is that, there is always someone that is going to be hungrier, more excited, and more willing to take that great apartment for a reasonable price, than you are. The question is, are you ready to act sooner than them? Real Estate professionals have a saying in this city: "Apartments always sell." What this phrase means is that clients may come and go, but no matter what, an available apartment in New York will always rent or sell. So the next time you decide to sleep on it, instead of putting down that application immediately, take a step back, and ask yourself if you really want this apartment, because while your sleeping, someone else is acting.
More to come... Next Chapter... Renting on a budget...
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