On the hunt for a new place? Get ready for what could be a wild — and competitive — ride. The national vacancy rate for apartments is 4.1 percent, and many cities, including those with the strongest economies after the recession, have vacancy rates under 3 percent.
As a result, looking for an apartment can unearth some hard truths. Here are four tips to give potential renters a better chance of finding and landing the right place — even in a hot market.
1. The market favors those who haven’t been savaged by the recession
Real estate is, of course, a business. And like any business, it favors those in strong financial positions. In cities with 97 percent to 98 percent of apartments filled, it’s a landlord’s market, and prospective tenants will have to work hard to stand out. Attend showings or agent meetings with proof that you’re not a financial risk: bring pay stubs, proof of renters’ insurance, and your credit report. Approach financially secure parents or relatives about co-signing your apartment; you’ll need them if you’re young, don’t have adequate savings, or have a salary that’s too low compared with the rent.
All this, of course, places individuals experiencing a financial downturn at a disadvantage. If you’ve had your credit dinged because of a particular event — an illness, a spell of unemployment — you might even want to bring documents proving the rough times are behind you.
2. Listings go “poof”
In this tight market, many new postings will be filled after just a day or two — and in that time, a landlord might receive hundreds of applicants. An apartment open today gets filled tomorrow … by someone else. To minimize that chance, refresh online listings constantly, or sign up for new listing alerts. And then try to stay as flexible as possible about visiting apartments during the business day, rather than waiting for the evening or weekend. And because you might have to agree to an apartment on the spot, research the apartment, neighborhood, landlord, or management company as much as possible before the visit.
3. It’s going to take a lot of work, fees, or both
Clearly, finding an apartment in a hot market may take more effort than just a a few e-mails or phone calls. Experts, in fact, recommend starting an apartment search at least 90 days before your ideal move-in. Besides time, the tight market requires a broad strategy that might involve social media, like asking friends in desirable rental buildings to let you know if an apartment opens up.
If you have the budget, maximize your chances of finding an apartment quickly by hiring a broker, who’ll expect a fee (in some places, up to 15 percent of the annual rent). Remember to ask the broker to show you his exclusives, not just open listings. When checking out an apartment, ask if there are comparable apartments available in the same building or neighborhood.
4. You’re not going to get everything you want
Although the slow pace of the economy’s recovery means rents haven’t risen as high or as fast as they might have considering the demand for apartments, rents are still at a premium in some cities. In those cities with high housing costs, you may have to be prepared to spend more than 30 percent of your annual income on housing and keep other areas of your budget to a minimum. Research your city and neighborhood online for baseline rents and comparables, or ask your broker for that information. Be flexible about the amenities you want, and be honest about the amenities you need. Do you really need a building with a gym and rooftop pool, when the cost of both is surely going to be factored into your rent? On the other hand, don’t overlook unacceptable, unsafe, or illegal conditions.
