Most Expensive Rental Markets

New York rents far surpass all other U.S. markets.
California and New England cities vie for second place.

By Les Christie, CNNMoney.com staff writer
February 7 2007: 3:55 PM EST
NEW YORK (CNNMoney.com) — New York City – and not just Manhattan – has by far the highest rents of any of the 52 major apartment rental markets around the nation, according to a report published Wednesday.
At year’s end, the average estimated monthly rent for all of New York’s five boroughs was $2,553, according to Marcus & Millichap, a real estate investment broker based in California. The average for the second most expensive city, San Francisco, was a comparative fire sale at $1,685.
New Yorkers – and everyone else – shouldn’t expect much better in 2007. Marcus & Millichap forecasts a 6.5 percent rise in the asking price of rents during the year in the New York and a 4.3 percent rise nationally.
In the three years that will end December 31, 2007, the company forecasts that the average rent in the United States will have increased by 14 percent, far faster that the rate of inflation.
Rents are up, in part, because of the slowdown in the housing markets. That has has kept potential home buyers in the rental market
The company also attributes the strength of the rental markets to the strong economy and job growth.
But the housing slowdown also led to the return of condos to the rental pool, according to the report. That has expanded the supply, which helped dampen what would otherwise be even larger rent increases.
Rental market, as measured by vacancy rates were weakest in Texas, where 10.1 percent of Houston’s rental inventory was vacant and 9.3 percent of Dallas/Ft. Worth’s.
New York City (2.7 percent) and Los Angeles (2.8 percent) reported vanishingly small vacancy rates.
Besides New York and San Francisco, other expensive areas include Boston, where rents average $1,632, New Haven ($1,485) and Orange County, Calif. ($1,458).

Bargains abounded in the Southwest and Midwest. In Tucson, the average rental apartment costs just $615. Columbus, Ohio ($642) and Indianapolis ($643) also boast bargains for renters.

NYC Rental Market Ranked Top in the Nation

www.newyorkbusiness.com
By: Julie Satow
Published: January 17, 2007

All signs point skyward for New York City’s booming apartment rental market, according to a new ranking report from brokerage firm Marcus & Millichap.
New York City skipped four positions to claim the top spot as the country’s strongest rental market, according to the National Apartment Index released by the brokerage on Wednesday.The report expects asking rents in the five boroughs to climb 6.5% to $2,719 a month this year, slightly higher than the 6.4% spike in 2006. This rent increase will occur despite an uptick in supply, including an expected 50% jump in inventory in Manhattan.”There is still a huge affordability gap between renting and buying,” says Peter Von Der Ahe, the director of the national multi-housing group for the firm. For the rental market to weaken, “there needs to be two to three years of solid rental growth, and then people will start saying that owning makes more sense.”Not everyone is as bullish on the rental market. Jonathan Miller, the president of the appraisal firm Miller Samuel, says the market will remain relatively strong but the pace of growth in 2006 will not be sustained this year. “Mortgages rates trended down in the second half of 2006 and the condominium market remained strong,” he said. Some New Yorkers who rented last year to wait out a potential housing bubble will be returning to the sales market, he says.

Renting in New York City

Renting in New York is unlike any other city in the country. At times my rental clients feel as if the are actually purchasing instead of renting. The process is somewhat tedious, which is why I have highlighted the steps for you.

Affordability
A simple rule to keep in mind: you can expect to pay 25% of your gross annual salary for rent.

Financial Qualifications
Most landlords require that you annually earn 40 to 50 times the amount of the monthly rent. Oustanding loans and liquid assets are additionally considered.

Lease Guarantors
For the renter that does not meet the Landlords financial qualifications, you may need a guarantor to guarentee the lease. Landlords prefer a family member who lives and owns property in New York, New Jersey or Connecticut. The guarantor must earn ample income.

Expatriates
If you do not have a Social Security number and do not pay taxes in the United States, your eligibility is weighted differently. You will need to work closely with your employer, relocation coordinator and your real estate agent.

When you plan your homefinding trip to New York City, you will need to bring the following items

Personal Documents

• Letter of employment and salary verification
• Names, addresses and phone numbers of previous landlords
• Names, addresses and phone numbers of personal and business references
• Bank account numbers
• Credit card numbers
• Expected bonus (employer to verify)
• Driver’s license or passport

New York Lanlords will not accept personal or out-of-state checks

Required Funds

• Credit Check: $25 to $200
• Two months rent for the security deposit and first month rent (additional funds may be required for security). If you do not have a NYC bank account you may bring Traveler’s Cheques that can be converted.
• The Brokerage Fee: Is paid by the tenant and is typically 12-15% of the annual rent. The landlord does not pay the fee – the tenant is responsible.

Once you have chosen your new apartment an application will be submitted, credit check performed and your references will be verified. Upon approval: leases will be signed and certified checks will be submitted.