When roommates want to rent from me is requiring each to make 3Xs the monthly rent asking too much?

12 Replies

I have some how gotten by with renting to mostly individuals who earn 3Xs the monthly rent, but for roommate rental situations I have been requiring each individual to earn 3Xs the monthly rent. Is it asking too much when 3 or 4 roommates want to split the rent for this requirement? If one of the group of roommates does not earn 3Xs the rent I require a co-signor for that individual, so incase a roomamte leaves, I know there should not be a payment issue from my viewpoint with my requirement but sure feels like many applicants who want to do this, dont seem to grasp my viewpoint. How do others of you handle roommate situations. I do also require each to complete a seperate application along with seperate background and credit checks, for again the misfortune of one leaving the group. Am I being to cautious?

People tend to have roommates, because they can't afford the place by themselves, so, they won't likely qualify for 3 times the whole rent.

Or am I misunderstanding what you're trying to say? The way I read you, you're saying, if it's a 3 bedroom house with $ 1200 rent and 3 roommates apply - do you require each to make at least $ 3600/month? Or are you saying that each only needs to make $ 1200/month, which is 3 x their share of $ 400?

If it's the former, then it'd likely be difficult for you to find tenants, because for most people having roommates is an economical decision and expecting them to make 9 x their share of the rent is likely not going to go over well.

3X rent doesnt always work depending on what area of the country you live in, your market, and market rents. Where I live I have to rent to 2X rent tenants or I would have a high vacancy rate. It also depends on the marketability of your property. If you feel its a safe multitenant situation then 2x rent would work for me in this situation b/c thats just more people to help pay the rent.

I have found that the best way to do the lease, or at least for me in my area, is to have all 3 tenants on one lease, not 3 separate leases. Reason being is if one skips out it is up to the other tenants to come up with the rent and them go after the one that skipped out in court instead of you being in control of the situation and being able to go after the one that skipped out. I have had this problem in the past so I just write a new lease if one tenant leaves and a new person is added. 

I agree with @Michaela G.  

Most folks get roommates, because they can't afford the rent on their own. 

I would probably give them a pass on the 3x's the monthly rent requirement, as long as together they met that requirement.  Now what I would do would be to require each of them to post a security/damage deposit equal to one month's rent, plus the first and last month's rent (their portion).  That way, if they move out before the end of the lease term, you have the security deposit and the last month's rent to fall back on, until the remaining roommates can find a replacement.  If they don't get a roommate by that time, they are responsible for the full rent each month.  Just make you run it by an attorney to ensure that's all legal in your state and your lease documents clearly disclose the requirements.

@Kenneth Davis  We rent our units with minimum criteria at 3x the monthly rent, but will consider 2.5x with an additional security deposit. We factor the 3x on the total household income, not individual income. 

Like you, all adults (age 18 and up) must fill out a separate rental application with application fee. We do thorough tenant screening on all. When they sign the rental agreement, they are jointly and severally liable. The security deposit is deposited into our security deposit trust account and remains there in its entirety until a future point in time when we regain possession of our unit. 

If a person wants to leave or a person wants to join into the rental agreement, we have a procedure for making that happen. It requires the household income to remain at 3x (or 2.5 with extra security deposit) and outgoing tenants and incoming tenants need to work out their share of the security deposit with one another. Be prepared for changes in household makeup, as it is fairly common in the residential rental industry.

Originally posted by @Marcia Maynard:

If a person wants to leave or a person wants to join into the rental agreement, we have a procedure for making that happen.

Marcia, do you write a lease addendum or amendment or draw up a new lease?  What is the wording of any amendment? 

In my area (DC) that wouldn't be practical. Rent is so much that few people make more than 3x the rent of an entire house on their own.  In fact, by those standards, my wife and I individually wouldn't be able to afford to rent our house or our rental house.

If I have three roomates who cannot afford the 3Xs requirement of this rental which happens to be $595.00 monthly individually, but jointly, then would it be OK if I require each to afford 1.5Xs the monthly income, should one of the three not faithfully pay their share of rent. The reason for the concern in ability for at least two to cover the rent is that I heard that 3 roommates could end up being 3 seperate evictions at 3Xs the cost. If they are all on the same lease and eviction must occur, then would it be just one eviction. I will also require each to pay a seperate security deposit of $500.00 or is that asking too much. I rent to every tenant on mine Month to Month leases and am sure I can be more flexible but dont want to press my luck either if things go South with a bad tenant.

Since from my experience I see that one roommate can always leave in short notice (gets married, job location changes), I like to see that the weakest members in a group of roommates can still pay the rent when the strongest person decides to leave. So I take away the strongest and expect the remaining ones to have total gross income of 3 times the rent.  Like others have already stated, people share housing because it is more affordable for them.

All individual roommates have to fill out an application and pay the application fee that I use to pay for screening services.

Thanks and yes I do use a service for tenant screening that requires the applicant to pay for a credit and background check; now so the only concern may be what the background check reveals like evictions or one applicant chooses to lie on their application. Thanks again!

It does also seem that at least from my experience in Florida, that most tenants intentionally lie on their applications or when inquiring about a rental as I had an individual text to me that 3 roomates this evening  would be renting, but now said the 3rd would be joining later on. This is kind of a red flag to me to hear that another party will move in or has that intention after the rental is first secured by his or her buddies.

Originally posted by @Steve Might:
Originally posted by @Marcia Maynard:

If a person wants to leave or a person wants to join into the rental agreement, we have a procedure for making that happen.

Marcia, do you write a lease addendum or amendment or draw up a new lease?  What is the wording of any amendment? 

When someone leaves, we write an addendum. We also have a form we use to release the departing tenant from future liability to the rental agreement, signed by all parties. We do a property inspection at that time and charge the original tenants for any damages we find. They work out how damages will be paid. Damages charged while the unit is still occupied do not come out of the security deposit, since we will not touch the security deposit until the final accounting after all parties have moved out and returned possession of the unit back to us.

When someone joins, we write an addendum. If we want to change other terms at the same time, we terminate the old rental agreement and write a new one. This often works best. A new agreement makes it more of a fresh start. We have, however, added a new family member with only an addendum. All new tenants must fill out an application, pay the application fee, and be screened. We use month-to-month contracts, so it is fairly simple process for us.

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