How to deny applicant due to low income

[Rebecca Coxson]

We are first time landlords. Our first application came in for our rental, but after taxes their total income is barely 2x the rent, where we require 3x rent. What is the proper way to deny them? Do I have to send an adverse action letter? 

[Matt Devincenzo]

First the 2X or 3X rent is typically gross not net income, so you should update your listing of criteria to specifically identify 3X net if that is your standard. Absent that info I would always read a 3X rent as a gross number since that is pretty typical.

As far as denial, "hi XXX, we reviewed your application and you didn't meet the qualification for rental income so we won't be proceeding. Thanks Rebecca". That's it, it doesn't need to be anything more than that. The only time you need an adverse action letter is if it is due to something in the credit report.