As a property owner, you bring a lot to the table. However, that still doesn’t mean you will be able to find a dream tenant easily. Not only is financial profile important, but lifestyle and rental history are key factors to make sure they qualify for approval. We recommend asking some key questions to tenants before renting your luxury apartment.
In New York City, location and price are usually the top reasons that tenants change apartments. Understanding these key factors will let you know what the experience with your tenant might be like. These questions will quickly eliminate unqualified renters. Why someone is leaving their current apartment is definitely the top question to ask before renting out your luxury apartment.
Anyone searching for a luxury apartment in the city will most likely have a high salary. The overall lifestyle of your tenant plays a huge role in how they will care for your property. Consider the differences between renting to a student whose parents are the guarantors, and a single business manager focused on a career. Both can pay the rent without a problem but the wear and tear over time may be drastically different.
Personal questions are not out of line when renting out your apartment. Feel free to ask anything about your tenant’s lifestyle and future plans. As the owner, you need to protect the quality of your property and its value.
Landlords need to be very clear on what their Airbnb and subletting policies are. Be explicit with tenants about your expectations when friends and family come for long-term visits. Subletting the place is another story. Most luxury buildings do not allow tenants to sublet apartments at all. Even though you are the owner of a unit, the board will have the right to set some ground rules between you and your tenants.
When a tenant gets married or starts a family this can drastically change some of the ground rules and the cost of the rent. Most landlords have explicit guidelines in their lease when another person enters the apartment full time or if a room is converted from general living space to an additional bedroom. Try to get the tenant to be upfront about their plans. Get an idea of the next one to two years so that the sound of wedding bells or a baby shower invitation doesn't surprise you.
Though they may sound tough, these should be easy questions for a prospective tenant to answer. Hopefully, the answers will be No. No. No. Yes.
Financial difficulties and bad blood with current landlords are huge red flags. These will be the dealbreakers when deciding who you will choose to sign the lease. If you believe that their past troubles will become your future struggles, it is a sign to move on to a new applicant.
When people budget for their lifestyle, rent is always at the top of the list. A luxury apartment tenant may not think of rent as the ultimate expense. However, it's still an important factor for you to feel secure in your lease. You may have heard the standard “30 times the rent” for renting in New York City. For younger applicants, it may be “40 times the rent” and for some luxury buildings, it may be even higher. Consider the total cost of living (outside of the rent) for your tenant before setting an income threshold. Between living essentials, food, entertainment, travel, and technology how much should your tenant be earning to make the rent a secure part of their budget? Requiring information about their total earnings including salary and other sources of income are standard. Still, take the time to include more specific financial savvy questions before renting a luxury apartment.
These questions may seem driven towards attracting the tenant to sign a lease but they also help tell the story of who your tenant is. Your building may provide Wi-Fi for all your tenants. If the reception is not that great on the 30th or 40th floor though, you should be upfront with the prospective renter about this.
If your building provides amenities like parking and storage, check to see if your tenant will take advantage of these services. Not all questions will be targeted towards whether or not the tenant will be a good fit for you. It is also to show them that what you are offering and validating the rental price you charge.
Alternatively, you can work with a company like Blueground. They find and screen prospective tenants so you don't have to. They sign the lease for long-term rentals, so you can feel completely secure. No matter what, you will always get your rent on time!