Formula For Tenant Qualification?

[Jeff Ryers]

Is there a formula for determining if an applicant is qualified financially?

Thanks!!!!!

[Kevin Sobilo]

@Jeff Ryers

There is a basic rule of thumb for income qualification but I use an additional one as well.

1. GROSS Monthly Income >= 3 x Monthly Rent.

So, if the rent is $1000/month the tenant must have GROSS monthly income of $3,000 minimum.

2. Monthly Rent + Monthly Debt Payments <= GROSS Monthly Income * 45%

This accounts for some people who have outsized obligations such as car payments, child support, credit cards, student loans etc.

Gross income is easier to establish and this mirrors how lenders qualify buyers for mortgages.