Skip to main content
The New York Times

Ask Real Estate: Trust Fund Tenant

By: Ronda Kaysen
Published: 4/27/2014Source: The New York Times

Q. I am a 20-something New Yorker who has been living in the city for just over two years. While my landlord does not have minimum income requirements for tenants, I am aware that most landlords look for tenants with a salary that is at least 40 times their monthly rent. I’m hoping to move soon and am concerned about finding a new place because my income does not meet that standard. But thanks to the generosity of my grandparents, I have significant financial assets in the six-figure range. I also have zero debt and excellent credit. My parents do not meet the income requirements to be guarantors because they also have moderate incomes, but substantial assets. How likely am I to find a landlord willing to accept a tenant with such an unusual (but stable) financial situation?

A. Congratulations on your enviable financial arrangement. One would think that a sizable savings account and impeccable credit would all but guarantee an apartment of your choice. Unfortunately, that isn’t always the case. While some landlords are willing to entertain the idea of a tenant with a trust fund, others are less flexible, especially because your guarantor does not meet traditional income requirements either.

Take the recent experience of Victoria Vinokur, a broker at Halstead Property who ran into trouble helping the daughter of a wealthy foreign client find a rental. “What we went through, I felt, was the most humiliating experience, and I deal with co-op boards,” Ms. Vinokur said of the financial scrutiny the client endured because her father did not have domestic income, although he did have domestic assets. “The requirements were just above and beyond reason.”

If you happen upon an apartment with a skittish landlord, you could consider paying an outside company to act as your guarantor.

“Think of me as the institutional mommy and daddy,” said Jeffrey Geller, the founder of the Insurent Agency Corporation, which guarantees leases in New York City. “The difference is I have a billion dollar balance sheet.”

Insurent charges a one-time fee of 80 percent of a month’s rent, which would come to $2,400 for a $3,000-a-month rental. If you are also stuck paying a broker’s fee, which can be as high as 15 percent of the annual rent, you are looking at a hefty bill for the privilege of signing a lease.

Before you panic, remember that many landlords (including your current one) have no problem with an arrangement like yours. “I find most landlords are not quite so rigid and are willing to consider the entire financial picture when considering a new tenant,” said Dennis R. Hughes, a broker with the Corcoran Group.

To avoid unnecessary stress, build extra time into your search. Discuss your financial situation with a broker (if you have one) or the property management company, so you don’t waste time courting unwilling landlords. And, because you have the luxury of cash on hand, you are in a better position than many of your peers to offer a handsome security deposit or pay extra rent upfront, which will certainly help calm a landlord’s delicate nerves.

Copyright © 2014 The New York Times Company. Reprinted with Permission.

Please click here to read the article on nytimes.com

 

RETURN TO PRESS PAGE