Do You Have to Make 40 Times the Rent in NYC?

New York City’s rental market is known for its competitive nature and high costs. Securing an apartment in this bustling environment often involves meeting specific financial criteria set by landlords. Understanding these requirements is an important first step for prospective tenants navigating the unique landscape of urban housing.

The 40x Income Guideline in NYC

The “40 times the rent” guideline is a common financial benchmark in New York City’s rental market. It suggests a prospective tenant’s annual income should be at least 40 times the monthly rent. For example, an apartment costing $2,000 per month would ideally require an $80,000 annual income. This figure can apply to the combined income of all individuals on a lease.

This 40x income rule is an industry standard or preference among landlords, not a legal mandate. Landlords use this guideline as a risk mitigation strategy to ensure tenants can consistently meet rent obligations. Given the high demand, landlords often impose such stringent financial requirements. The guideline also aims to maintain a reasonable rent-to-income ratio, helping ensure tenants are not overly burdened by housing costs, which could lead to payment defaults.

Alternatives to Meeting the 40x Income Guideline

Individuals who do not independently meet the 40x income guideline have several alternatives to qualify for a rental. One solution is securing a guarantor, an individual or entity who agrees to assume financial responsibility for the lease if the tenant fails to pay. A personal guarantor needs to demonstrate a significantly higher income, earning 80 to 100 times the monthly rent, and possess a strong credit score, often above 700 or 750. Many landlords prefer guarantors residing in the tri-state area of New York, New Jersey, or Connecticut, though some accept those from other U.S. states.

Institutional guarantor services are increasingly prevalent in the New York City market. Companies like Insurent and The Guarantors offer their services for a fee, acting as third-party guarantors for tenants. These services have their own income and credit score criteria for the tenant, which can be lower than a landlord’s direct requirements, such as needing the tenant to earn 27 to 27.5 times the monthly rent with a credit score of at least 630. The cost for these services ranges from 65% to 100% of one month’s rent, depending on the tenant’s credit history.

Another consideration for tenants unable to meet income guidelines is offering a larger upfront payment. However, New York State law significantly limits the amount a landlord can request at lease signing. A security deposit cannot exceed one month’s rent, and landlords are prohibited from collecting the last month’s rent in advance. This means the total upfront payment is capped at the first month’s rent plus one month’s security deposit.

Required Financial Documentation for Renting

When applying for an apartment in New York City, prospective tenants must provide financial documentation to substantiate their ability to pay rent. Landlords request proof of identity, such as a government-issued photo ID. Income verification includes recent pay stubs, an employment verification letter from an employer, and federal tax returns for the past one or two years.

For self-employed individuals, a letter from a Certified Public Accountant (CPA) or Profit & Loss (P&L) statements may be required to verify income. Bank statements for the last two to three months are also requested to demonstrate financial stability and sufficient funds.

Applicants need to authorize credit and background checks. If a guarantor is involved, they also need to provide similar comprehensive financial documentation.

Additional Costs of Renting in NYC

Beyond the monthly rent, other significant costs are associated with renting an apartment in New York City, both upfront and ongoing. A security deposit is required, but New York State law caps this amount at one month’s rent. This deposit must be returned to the tenant within 14 days of vacating the property, with an itemized statement for any deductions. In buildings with six or more units, the security deposit must be held in an interest-bearing account, with the tenant entitled to the interest earned, minus a small administrative fee.

Historically, broker fees were an upfront cost, ranging from 12% to 15% of the annual rent. However, as of June 11, 2025, the Fairness in Apartment Rental Expenses (FARE) Act prohibits brokers representing landlords from charging these fees to tenants. Tenants are now only responsible for a broker fee if they explicitly hire a broker to represent them in their apartment search.

Application fees are another expense, legally capped at $20 per prospective tenant in New York. This fee covers the cost of credit and background checks. The first month’s rent is always due at lease signing, alongside the security deposit.

Other potential expenses include utility setup fees, with average monthly basic utilities (electricity, water, gas) ranging from $190 to $250, and internet around $96 per month. Some buildings, particularly co-ops or condos, may charge move-in fees, which can range from $500 to $1,000. Renter’s insurance may also be a requirement for some leases. Pet fees may apply, often as a monthly premium, though the total security deposit (including any pet deposit) cannot exceed one month’s rent.