Tips on Using an Apartment Broker to Navigate the NYC Rental Market in 2022

Finding an apartment in New York City has never been easy, but it’s more complicated than ever in 2022. Although lease rates dropped and availability rose during the height of the pandemic, the city’s rental market has emerged more competitive and cutthroat than ever.

If you need to rent a place in NYC in 2022, you’re in for an uphill battle. Working with an apartment broker is one of the best ways to streamline the process. In this handy guide, learn more about why it pays to work with a broker when seeking an apartment in NYC.

Renting an Apartment in NYC is Harder Than Ever

In April 2022, net effective median rents in NYC rose year-over-year to a new high of $3,810. They increased by 38.7% year-over-year from April 2021, when they stood at $2,975 – the fastest rate of increase ever. Rents increased by 6.2% from March when they stood at $3,644.

At the same time, as people flood back into the city post-pandemic, available listings for apartments across all five boroughs have plummeted. NYC experienced its most significant decline in inventory in history from April 2021 to April 2022, dropping by 77.3% during that time. Therefore, if you are just now looking for a place to rent, your options may be limited.

The vacancy rate for NYC rentals has remained below 2% for five months straight. Lease signings were also up by 6.6% in April 2022, exacerbating existing shortages.

If you are looking for luxury apartments in the city, you may have an even more challenging time. Luxury apartment rents stood at $4,600 in April 2022, the second-highest level in history. At least one-third of all luxury apartment listings spur bidding wars – another great reason to have a seasoned real estate broker by your side while you search.

Why Not Find an Apartment Yourself?

In most rental markets, people can secure homes without the help of brokers and other real estate professionals. That’s not the case in New York, where competition for rentals is always high.

You can always start your search on your own by checking online listings for apartments for rent in the borough or neighborhood of your choice. However, the market moves so quickly that listings are often obsolete within hours.

If you have your heart set on renting in a specific building, you can contact the property management company or landlord to inquire about availability. Sometimes, properties maintain “shadow inventories” to generate buzz. However, this strategy typically falls flat in these unprecedented real estate rental market conditions.

Finally, many people find places to rent in NYC via word-of-mouth recommendations. Therefore, always start your search by asking people in your network if they have any leads.

Although it’s technically possible to rent an apartment in NYC without a broker, the going is much more challenging – and you’re less likely to end up with something you really love.

NYC Apartment Broker Basics

A broker is a licensed real estate professional who acts as a middleman between landlords, property management companies and tenants. In New York, brokers must pass an exam and meet strict educational requirements to become licensed.

Unlike property management companies, which only rent units in buildings they own, brokers can help you navigate options across numerous properties. After telling them what you need, they will bring you listings for apartments available to rent within your desired timeframe.

For their services, apartment brokers collect commissions on the leases they secure for their clients. Therefore, you should be prepared to budget accordingly, setting aside 8% to 15% of the annual rent to pass along to the broker at lease signing.

Benefits of Working with an Apartment Broker in NYC

Broker fees are necessary in New York’s highly competitive rental market. Some brokers charge the equivalent of the first month’s rent for their fee while others charge the aforementioned 8% to 15% of the annual rent.

It’s normal to be reluctant about paying even more money to secure a rental in the city. However, a good broker works hard to earn that commission, helping you zero in on viable options with minimal effort on your end.

Some of the top advantages of enlisting the help of a real estate broker when seeking an apartment in NYC include the following:

• Insider Knowledge – NYC is a massive city broken into numerous rental submarkets. Working with a broker in the neighborhood or area you want to live in gives you insider knowledge that helps considerably during your search. Your broker will know popular properties in the area. They’ll have established relationships with many landlords and property management companies. Their in-depth knowledge of the local submarket will increase your odds of finding the perfect option.
• More Options – Since listings are snapped up quickly across New York, they don’t reflect everything that may actually be available at any given time. An NYC apartment broker has the inside track regarding apartments for rent in the areas they cover. They usually know about off-market opportunities, allowing you to cast a wider net to find what you need.
• Negotiating Skills – Nothing is set in stone until the lease is signed. A good broker may be able to help you negotiate better terms for your lease, securing concessions from the landlord or property management firm. They do this kind of thing every day, and their expertise in this area will come in handy for you.

You'll Likely Need an Apartment Broker If…

If you are dead-set against paying a broker’s commission on top of everything else, you may still be thinking about finding an apartment yourself. However, under certain circumstances, working with a broker is a must. Some examples of this include the following:

• You don’t have extra time to focus on your search.
• You’re new to NYC and unfamiliar with the area.
• Your employer is going to cover your broker fees.
• You plan to stay in your apartment for more than one year.
• You prefer to sublet a condo or co-op.

Choosing an Apartment Broker in NYC

Like other professionals, real estate brokers vary in terms of experience, skills and expertise. With that in mind, it pays to take your time selecting one to help you find an apartment for rent in New York.

Some tips to keep in mind when searching for a broker include the following:

• Perform due diligence regarding any broker you consider. Search for online reviews to see what others have to say about their work. Confirm that they have a valid real estate broker’s license.
• Ask plenty of questions before paying or signing anything. Find out about their fee structure; how much will it cost to work with them? What steps do they take to find apartments for clients? How easy will it be to contact them?
• Your broker may charge first month’s rent for their fee, or they may charge a percentage of the annual rent. If you are considering a place that costs $2,500 per month, you may pay $2,500 in commission if it’s for one month’s rent, or you may pay up to $4,500 if it’s based on a percentage of the annual rent. Make sure to get information about commissions and fees in writing before proceeding.
• Be loyal to your broker after signing up with them. Make it clear that you are working with them and them only for the best results. If your broker senses that you’re working with other real estate professionals, they won’t make you and your needs a priority. After all, you might drop them before they can collect their commission.

Finding an NYC Apartment With a Broker

The first step when seeking an apartment for rent in New York City is deciding whether or not to work with a broker. As you can see from the information provided, enlisting the help of a real estate broker is the best way to navigate the NYC rental market.

Your broker should be ready to hit the ground running as soon as you sign up with them. However, it also helps if you’re ready to go too.

Before starting your search, sit down and write a list of what you’re looking for in an apartment. In a highly competitive market like NYC’s, it’s essential to be somewhat flexible. With that in mind, come up with must-have characteristics and nice-to-have ones. That way, you can choose from a more comprehensive array of options.

What are your top priorities when seeking an apartment to rent in the city? Keep these considerations in mind to help your broker understand what you absolutely need:

• Budget – Needless to say, you should have a clear idea about what you can afford. In NYC, landlords follow the 40X rule, meaning that you must earn at least 40 times the monthly rent to qualify. Come up with a realistic range of what you can afford, remembering to account for utilities and other fees.
• Location – From the Upper East Side to Tribeca, NYC is split into a dizzying array of neighborhoods and submarkets. Pinpoint the area you want to live to simplify your search. Choose a broker based in that part of the city for the best results.
• Square Footage and Layout – How many bedrooms will you need? About how much space do you want?
• Amenities – Are you looking for a doorman building with high-end amenities like a premium fitness center and rooftop lounge or a simpler place with more basic amenities?
• Public Transportation Access – If you don’t have a vehicle, you’ll also want to prioritize buildings with decent proximity to public transit.

Get Everything Ready Before You Start

If you are lucky enough to find a suitable place to rent, you’ll need to act quickly. Therefore, get everything ready before you start your search to ensure that you can jump on any opportunities that arise.

Your broker can help you ensure that you have all your ducks in a row before searching in earnest.

For example, you’ll need to gather important paperwork to qualify for your lease. Examples of documents you’ll need include the following:

• government-issued photo ID
• tax returns
• bank statements
• two recent paystubs or a letter of employment
• landlord reference letter
• if you have pets, a letter from the veterinarian confirming vaccination status
• signed agency and fair housing disclosures

Will You Need a Guarantor?

If you are unlikely to qualify for a lease based on your income, you should line up a guarantor, or cosigner, beforehand. If you are self-employed, retired, not working with assets, or an internationally employed person, you will also need one.

Note that your guarantor must earn at least 80 times the monthly rent for the apartment you are trying to get. They must also live in New York, New Jersey or Connecticut.

What if You Don’t Qualify?

As noted above, if you don’t make at least 40 to 45 times the monthly rent of the place you want, you probably won’t qualify. The same applies if you have bad credit, a marred rental history or other issues. If you have someone in NY, CT or NJ who earns enough to qualify, you can enlist them as a guarantor. Have their information ready to go when checking out apartments with your broker so you can act quickly.

Alternatively, some landlords waive requirements for tenants who can pay at least six months of rent upfront. If you are unlikely to qualify and don’t have anyone to cosign for you, this may be the only option.

When to Start Searching for an NYC Apartment

Since so many steps are involved in securing an apartment in New York, starting early is crucial.

You should set aside three weeks for your search. Ideally, you should start during the last week of the month before your current lease ends and continue through the first two weeks of the month before move-in day.

Plan to secure a broker for your search before you begin. That way, they can help you coordinate everything to ensure that you have a new place lined up when you need it.

Your broker will likely recommend that you look at places in person on Thursdays and Fridays when inventory is typically replenished. Therefore, you may want to take some time off work to devote to your search.

What to Expect After Finding an Apartment to Rent

Another perk of working with an apartment broker is that they can schedule multiple visits to multiple apartments in a single day, making it easier to coordinate your search. Be sure to have everything you’ll need when you head out to look at places with your broker.

Fees

When checking out apartments in NYC, be prepared to pay the various fees that go along with leasing a place in the city. By law, landlords can’t charge more than $20 for the application fee. You may have to pay two to four months’ rent in advance; part of that will be used for the security deposit. At closing, you will pay last month’s rent, your broker’s fees and any other miscellaneous fees that apply.

Make an Offer on the Spot

If you visit an apartment with your broker and believe it’s right for you, make an offer on the spot. Your broker should already know how likely you are to qualify and land the place, so listen to their advice to increase your odds of success.

Negotiate

After submitting your application and making your offer, you may be tentatively approved for an apartment. However, don’t be surprised if your broker tells you that some negotiations are in order to secure the right option.

In today’s white-hot rental market in NYC, bidding wars are all too common. With that in mind, you may have to offer above asking price to get into the place you want. Another tactic may be paying the broker’s fee if you’re looking at a “no fee” apartment. Again, your broker will know which strategy is right under the circumstances.

Sign the Lease

Your broker will stay by your side through lease signing. They can help look over the lease and its elements, but it’s crucial that you do so yourself too. Pay attention to things like rent price, terms, escalations, utilities, maintenance, pets and garbage to ensure that everything is up to speed.

How BCP Real Estate Group Can Help

Working with a broker is the best way to secure the right place if you need to rent an apartment in New York City. To find a broker that will go the distance for you, connect with BCP Real Estate Group. From our offices at Rockefeller Center, we offer an array of resources for people seeking apartments for rent across NYC. You can search our online listings to check current availability, and we can refer you to skilled and experienced real estate brokers across the city who can assist you further. For more information, contact BCP Real Estate Group today.