How Much Money do I Need Up-Front to Rent in NYC?
Rent in NYC can be quite expensive. More often than not, you probably will need more money than what you expected to pay up-front. And you almost always have to pay this up-front money in cash or with a certified check. So if you want to lease apartments in NYC, it’s important to know how much money up-front is needed.
What You Need to Pay Up-Front
1. Rental Application Fee
Cost: $0 to $250
Your landlord will want to run a background check to make sure that you’re financially capable of paying rent, as well as process the rest of your “paperwork”. The application fee covers the screening process, and usually includes a credit check. Note that this fee is usually NOT refundable, even if you are not approved for the apartment.
You will usually pay this up-front first, before any other money is due.
2. First Month of Rent
Cost: Varies based on Monthly Rent
Expect to pay for one month’s worth of rent up-front when signing the lease. Although you might need to pay for more if you’re not starting on the first day of the month. For example, if you are starting on the 20th of September, the landlord may ask you to pay for the first month of rent for October, as well as 10 days of rent from the 20th to 30th of September.
Of course the amount you pay will depend on what your rent is. Monthly rental costs are extremely varied. But you can use rental websites like Frele.com to search for affordable NYC apartments within your budget.
Note that the first month of rent is usually paid up-front at the lease signing.
3. Security Deposit
Cost: Usually 1 month, but could be more
A security deposit is the amount a landlord will hold during the lease term in case there are any damages beyond normal wear and tear at the end of the lease term. They can also use the security deposit if the tenant skips out on rent. The standard security deposit in New York City is one month. A landlord may ask more from renters with low income or a bad credit history. If you have less than stellar qualifications, a landlord could ask for an extra month of security. But if it’s really questionable, the landlord may request 3 to 6 months of security money up-front. In NYC apartments that allow pets, the landlord could ask for an additional security deposit of $500 to $1000.
The security deposit is usually paid up-front at the lease signing.
4. Brokerage fee
Cost: Up to 15 percent of annual rent
If you’re leasing through a broker, as the renter you will often be asked to pay the brokerage fee. The brokerage fee typically costs between 1 and 1.8 months of rent. Note that 1.8 months is equivalent to 15% of the annual rent, which is the standard brokerage fee in New York City. Don’t fret. While it certainly depends on the circumstances, this amount is often negotiable.
Note that the security deposit is also usually paid up-front at the lease signing.
Calculating the Needed Money Up-Front
Add these fees up described above and you get the total amount needed up-front to rent an apartment in New York City. Let’s look at an example.
As an example, let’s say you want to rent a $3000 apartment. At minimum, you need to prepare $6,000 up-front. This includes the first month of rent and one month of security deposit. If you have a broker, then your total cash up-front should be anywhere between $9000 and $11400 (depending if brokerage fee is one month (low end of range) or 1.8 months (high end of range). Note that if you’re taking a pet with you ($500-$1000 extra) AND your landlord requires an additional month of security (i.e. two months of security), you will need $12500 to $15400 up-front with a broker (or $9000 without a broker).
So, it really can add up!
Before you start hunting for apartments in NYC, you should be one step ahead and know the required money up-front. This way if you find an apartment you like, you won’t be shell shocked by the up-front costs.
For more NYC rental tips, please go to frele.com/learn.
This article was written by:
Phil Horigan, NYC Real Estate Veteran
Founder, Frēlē, the free and honest NYC rental marketplace
Producer, Phil’s NYC Rental Tips [YouTube Channel]
Phil has been a licensed NYC real estate agent since 2004 working for some of the top real estate brokerage firms in the industry. He founded Leasebreak.com in 2013, and Frēlē in 2017. Frēlē and Leasebreak are free and transparent rental marketplaces to search for or post apartments for rent in NYC
Go to frele.com to search for NYC apartments (free service).