Rent in New York City is officially the highest in the world. In the past, this was so established that Numbeo, which calculates and compares the cost of living in cities throughout the world, used NYC as the basis for all comparisons. NYC got a score of 100, and every other city in the world got a score in that range.
Over the past few years, various other cities have held the title for most expensive rent. San Francisco in particular became far more expensive than NYC. However, mid-2022, NYC was back at the top.
This won’t surprise most people looking to rent in NYC. You will find tiny studio apartments at rates that you would expect to pay for three-bedroom houses. While incomes in NYC are generally higher than in most other US cities, the cost of rent still puts a strain on most residents.
Unfortunately, the cost of rent itself is not the only expense you have to deal with when choosing to rent in NYC. Here are other hidden costs you will encounter.
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Renters insurance is something you should get no matter where you’re renting, but it is particularly important in NYC, considering the crime rates. A Renters insurance will cover you for theft or destruction of your possessions.
The good news is it is not the biggest expense, even though it will put some strain on your budget. On average, renters insurance in New York costs $14.60 per month. This includes personal liability insurance, which will pay out claims brought against you in case you accidentally damage someone or their property.
In a strict legal sense, you do not need to use a broker to find an apartment in NYC. You can go about your search yourself and may manage to rent without using an expensive broker. However, most landlords or investment firms use brokers to rent out their apartments, and you will have to deal with them if you’re to secure a rental.
Since you will pay the same broker fees whether or not you use a broker to help you in your search (they will split it with the broker representing the landlord), it may be worthwhile to find a broker to represent you.
Broker fees are, unfortunately, not something to scoff at. They range from one month’s rent to a full 15% of the annual rent (which amounts to almost two months’ rent). This significantly increases the cost of signing a lease for an apartment.
Most people know they will need to pay a security deposit when renting in NYC. However, many new renters assume that the extra month’s rent they pay at the start of their lease goes towards this purpose. Unfortunately, that is inaccurate. The extra month’s rent is typically considered your final month’s rent and you are charged a separate security deposit.
The cost of a security deposit is usually one month’s rent. If you are renting an apartment with rent regulation, it cannot legally be more than this. If not, landlords can charge more.
It is important to understand that this is not supposed to be an expense but rather a deposit. You should get it back at the end of your lease, unless you have caused significant damage. Not only that, but your landlord is responsible for investing it and returning it with interest at the end of the lease. If they spend it, they have to pay you an amount equivalent to what you would have received with interest.
The above costs all make renting in NYC even more expensive. The reality is that the cost of rent is not as bad as it seems when you take income into account. Nonetheless, it is currently higher than anywhere else in the world, which affects people no matter how much they earn.