1. Make Sure You Qualify
The first thing you should do is verify that you have enough income to qualify for the apartment. Every landlord and property manager has different screening requirements, so it's essential to understand the local requirements and be sure you can meet them before you start looking.
In most areas, you'll need to make 3x the rent. So, if the monthly rent is $2,000, you'll need to show that you make at least $6,000 in monthly income or $72,000 a year.
Other places are even stricter, while some may be more lenient, but experts recommend that you not spend more than 33% of your paycheck on rent. So, take stock of your income and confirm that you can afford the apartment.
2. Gather All the Necessary Paperwork
The next step is to gather all the necessary paperwork. Unless you know the landlord personally, they will want to verify that you have enough income and savings to afford the apartment, so you'll need to gather a few financial documents before you begin your search.
Each landlord may have their own application process, but generally, they will want to see a copy of your tax returns, most recent pay stubs, bank statements, and an employment letter. The last item is a letter from a manager or HR representative at your company confirming that you make the amount of money listed on your application.
Some landlords may require more and others less, but it's wise to have as much proof of income documentation as possible ready to go, so that you can get approved for an apartment quickly.
3. Check Your Credit Score
It's also wise to check your credit score before you begin applying so there aren't any sudden surprises. Most landlords require a credit score of 680 or above to approve a potential tenant, although others are stricter.
There are plenty of tools available that you can use to check your credit score. To ensure it's as accurate as possible, you should search for an online tool through one of the three major credit bureaus – Experian, Equifax, or TransUnion.
You may have to pay a small fee to check your score, but it will be more accurate than the free online tools.
Your credit report will show you your FICO score and let you know how much debt you currently owe. So, if a high debt limit affects your score, you may try to pay it down before you apply.
4. Get References from Previous Landlords
Although not always required, you may want to get a reference letter from a former landlord. Occasionally, a landlord will request references to ensure that you are both financially responsible and a good tenant.
Income doesn't always account for character. A tenant could have plenty of money but may make late payments or have loud parties that disturb other neighbors. In that scenario, a landlord might choose a tenant who makes less money but has positive reviews from past landlords (as long as they still otherwise qualify).
References can be especially helpful for those who are right on the cusp of qualifying for the apartment but need something extra to convince their potential landlord that they are not a risk.
If you are concerned about any character issues coming up on your background check, landlord and personal references become even more important.
5. Save Enough for Your Move-In Expenses
Moving can get expensive, so make sure you have ample savings to afford an apartment before you begin looking. You should have at least enough to afford the basic closing costs, including 1 to 2 months' rent and a security deposit.
Also, be sure to budget for any miscellaneous fees – such as an application or credit check fee – and possibly a broker fee.
The landlord pays the broker fee in some places, while it's the tenant's responsibility in others. The broker fee is typically equal to one month's rent but can be as much as 15% of the annual rent in places like New York City.
It's essential to be aware that you may be on the hook to pay this additional expense. Also, account for other expenses like hiring a moving company or paying someone to assemble your furniture. These costs are optional but may be convenient if you have the spare cash.
6. Give Yourself Enough Time to Look
It's also essential to give yourself ample time to search. Moving can be stressful, and you don't want to rush to make a decision.
Depending on the market and your current living situation, you may not have a ton of time to search. But it would help if you started to look at what's out there a few weeks or even months before searching more seriously, so you know what to expect.
The more time you give yourself, the more likely you will find the perfect spot and not just settle for what's available.
Finding an apartment can be challenging if you have bad credit or have not yet built any credit. Many younger people just entering the workforce may not have had time to build their credit. Or, if you are moving from another country and you're not used to the American financial system, it may be more difficult to build credit in time to get an apartment. Luckily there are a few alternatives you may consider.
Get a Guarantor
A guarantor is a third party who agrees that they will help you pay the rent if you can't make the payments yourself. Typically, a guarantor will be a family member or someone you know, but there are also institutional guarantor companies you can hire for a fee.
Landlords typically have additional income requirements for guarantors, but this can be a solution if you don't qualify due to bad or lack of credit.
Agree to Pay the Rent Up Front
Another option is to agree to pay a portion or even all of the rent upfront. Landlords use credit scores to assess how risky you are as a tenant, but if you agree to pay at least a portion of the rent upfront, this guarantees that they will be paid and might be enough to convince them that you're trustworthy.
The amount they'll require depends on how bad your credit is, but this is one way to get around the credit requirement.
If you can find a qualified roommate or roommates with good credit, it may help the landlord overlook your personal credit score. Having more people on the lease dilutes your individual responsibility, and as long as they are willing to vouch for you, the landlord may accept.
This may be a better option for those with no credit than bad credit, but it's an alternative you may consider.