What is the general rule of thumb for approving a tenant on income? Say the rental rate for an annual is $1150 per month. How much would be the minimum income you look for to feel comfortable the tenant could pay the rent? Thanks!
Monthly income has to equal 3x rent. Thats the standard.
I've been using 3 x. The lowest I have heard of being accepts is 40 % which is 2.5 times rent but if you go any lower then that they can't afford it because they can't pay the rest of their bills.
The exception is college student rentals where we use a co-signer without income qualification criteria.
The three times rent is probably the limit for me. Otherwise if they ever run into a small emergency they will suddenly have no money to cover all of the rent. Once a renter falls behind they will rarely catch up. Do yourself a favor and stick with the guideline of 3 times rent.
3 times minimum, 4 times preferred unless they are a student, like mentioned above.
3x rent but I look at their income sources.
Their income must be three times the rent rate. We let tenants combine income to meet that requirement. Income can come from many sources. Child support, for example.
You should check out BP's Ultimate Guide to Screening Tenants:
Verifiable income (or income equivalents) 3x the rent or 2.5x with extra security deposit.
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