Photo via CityRealty
Foreign nationals from around the world are recruited to work in New York City, but when they arrive, they often realize that not everyone is eager to welcome them with open arms nor open doors. Indeed, while many employers from banks and tech companies to museums and universities are eager to recruit top global talent, most of the city’s rental management companies would prefer to rent to a pack of college students than a fully employed foreign national with a six-figure income.
So, what is an adult with a great credit history, full-time job, and in many cases, a family to do when they arrive in New York City? While foreign nationals likely can’t change the perception that renting to foreigners is a bad idea, there are a few ways to troubleshoot the housing market in New York City whether you were born in Toronto, Paris, or Tokyo.
Photo via PXhere
What foreign nationals should expect
First, whether you’re U.S. born or a foreign national, you’ll need to provide proof that you make at least 40 times the monthly rent. For this, you’ll need an employment letter—this is generally obtained from your human resources office at work. But proof that you’ll be making 40x or more the monthly rent is not the only thing you’ll be expected to provide before anyone hands you the keys to an apartment. In addition to your employment letter, New York City owners can ask for many types of documents that are not typically required in other parts of the world. This includes everything from all recent U.S. bank statements with current balances, income tax returns for the past two to three years, and all the identifying information needed to carry out a credit report, including your social security number.
Since you will not be able to provide most or any of the required documents (notably, you’ll need an address to even open a U.S. bank account or get a social security number), expect to be asked to pay anywhere from three months to an entire year of rent upfront. Again, this may sound shocking, but management companies can ask for whatever amount of money they wish to ask for upfront. This may not be the way it works in your home country, but this is how it works in New York City.
While this may seem unfair, it is important to accept the fact that asking foreign nationals for more money upfront is a standard practice, and it doesn’t matter if you’re arriving from London, Montreal, or Nairobi. Moreover, any effort you make to impress your real estate broker or management company with your credentials or foreign rental or ownership history, likely won’t matter. In fact, they won’t care if you have a Ph.D. from Oxford University, just got hired by the Swiss Bank, or own a house in the French countryside. When you arrive in New York, assume you are starting from nothing in terms of your credit and rental histories. To put it bluntly, on the rental market, this makes you about as desirable (and perhaps even less desirable) than a 19-year-old college student.
So, what can you expect to pay upfront as a foreign national? Assuming you will be paying at least $2,500 a month for a one bedroom, this could mean being asked to transfer up to $30,000 to take possession of an apartment and not necessarily an apartment in a luxury building. If you’re moving to New York with a family, expect the figure to be much higher. But there are a few things you can do to mitigate at least some of the costs and hassles associated with renting as a foreign national.
Photo via CityRealty
Negotiate additional housing costs with your new employer
If you haven’t yet signed a contract, try to negotiate some housing cost or support with your employer. If you can, ask your new employer to cover both your moving expenses and your housing start-up cost (e.g., your security deposit and broker fees). In some cases, your new employer may even have access to properties that they rent out to foreign national employees or have an existing arrangement with a management company. If you have already signed a contract and are on your way to New York City, you may not be able to secure housing support from your employer, but there are still a few things you can do to ensure that you don’t end up couch surfing as you start your dream job.
Offer evidence that you are an ideal tenant
While New York City property owners don’t need to take your foreign credit history into account and most will not, evidence of a great credit history in another country may at least help reduce the number of months’ rent an owner asks for upfront. Likewise, it never hurts to be able to offer proof that you have money on hand, so a foreign bank account with a high savings balance may still help. While none of this will erase the fact that you just arrived, this evidence may make a management company more willing to reduce the number of months’ rent required upfront. Notably, if you’re searching for an apartment down market rather than up market, this strategy may have more success. While high-end buildings generally have their choice of tenants, a management company that is trying to move more professionals into a building may be willing to make an exception for a foreign national.
Rent from an individual homeowner
While unusual in Manhattan, in other boroughs, it is sometimes possible to rent directly from a homeowner. In this case, an individual owner may be foreign-national friendly and willing to work out an alternative arrangement. Unfortunately, the majority of listings in New York city go through housing brokers and are connected to large management companies, so finding an appropriate listing can be difficult. If your organization has a relocation office, start by asking them for assistance. Also, reach out to anyone you already know in New York City, since they may know of homeowners who are looking to rent a separate apartment in their home and these owners are often thrilled to rent to working professionals rather than students.
Sublet before you rent
While not ideal, especially not if you have just arrived in New York City with a family, it is often easier to get started by subletting another tenant’s unit, even if it is only for six months. During this window, you’ll be able to establish a U.S. address, set up a bank account, and at least begin to gather some of the evidence you’ll need to more easily rent your own unit. This will also give you time to start exploring the city’s hundreds of distinct neighborhoods and thinking about where you actually want to live.
Get a third-party guarantor
Perhaps, the best option is to go through a third-party guarantor. In New York City, new renters typically need a guarantor (e.g., a parent or guardian who lives in the United States). If you’re a foreign national, you likely won’t have a U.S. guarantor, but there are some third-party insurers who can serve the same role for a small fee. While not all buildings accept third-party guarantors, such as Insurent, many buildings do. To qualify for the services offered by a company like Insurent, you’ll need a strong credit history abroad and evidence that you will indeed be fully employed in the United States.
How long does it take to become a New Yorker?
Over time, your U.S. credit and rental histories will build up, and you’ll eventually be treated like any other New Yorker, even if you never choose to become a U.S. citizen. In most cases, it takes at least two years to begin to have a relevant U.S. credit history, but even a short credit history combined with a demonstrated ability to pay your rent on time will give you the leverage you need to go on the rental market without paying substantial money upfront or relying on a third-party guarantor.
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