Legal or Illegal: High income requirements for multiple tenants.

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Legal or Illegal: High income requirements for multiple tenants.

Josh Dillingham
Rental Property Investor · Brattleboro, VT · Member since 2015 · 204 posts · 174 votes

In order to show a unit I require that a prospective tenant has a monthly income of 3x rent.  But that leaves more room for error for a single tenant than for a family of 4. would it be discrimination based on familial status if I required a monthly income of 3x rent + $200 per additional tenant?

also, for all of you that have a similar minimum monthly income requirement do you use net or gross income?

Thanks!

Josh

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Kim Meredith HamptonBusiness Member
Real Estate Broker · St Petersburg · Member since 2014 · 2k+ posts · 2k+ votes
9y

@Josh Dillingham I have a set resident selection criteria, please feel free to use if off my website. You want to make sure that you are firm, fair and consistent across the board of whatever you do in your business. 

[email protected]407-448-6679Podcast Guest on Show The Key to Scoring Discounted Deals in One of America’s Hottest Markets
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  • David Zheng
    Investor · Saint Louis, MO · Member since 2016 · 970 posts · 1k+ votes
    9y

    I use gross income, because that is all you can really use for rent anyways.

    also it depends on the kind of property you are marketing. I mean if its a 1 or 2 bedroom place, I'm pretty sure you can deny a family of four due to occupancy laws anyways.

    If its a 4 bedroom house, even if they have 3x GROSS rent, you should check for credit. If they have crappy credit, it obviously means they cant budget well. if its good with no evictions, I don't see why they couldn't handle the extra kids and your rent.

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  • Kim Meredith HamptonBusiness Member
    Real Estate Broker · St Petersburg · Member since 2014 · 2k+ posts · 2k+ votes
    9y

    @Josh Dillingham I have a set resident selection criteria, please feel free to use if off my website. You want to make sure that you are firm, fair and consistent across the board of whatever you do in your business. 

    [email protected]407-448-6679Podcast Guest on Show The Key to Scoring Discounted Deals in One of America’s Hottest Markets
    Compass | St. Pete514 Reviews
    WebsiteView Page
    1Reply
  • Anthony Hurlburt
    Salt Lake City, UT · Member since 2016 · 199 posts · 190 votes
    9y

    HUD allows two occupants per bedroom. I do not believe you can deny a two bedroom apartment to a family of four based on occupancy laws. I also believe that if you have a 3X rent requirement for your rentals and then have an additional amount required per occupant this could be discriminatory towards families.

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  • Clay Scott
    Real Estate Investor · Oklahoma City, OK · Member since 2008 · 3 posts · 1 vote
    9y

    @Kim Meredith Hampton your applicant guidelines are great! In fact the entire FAQs are excellent. I'm going to model mine after them.

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  • Kim Meredith HamptonBusiness Member
    Real Estate Broker · St Petersburg · Member since 2014 · 2k+ posts · 2k+ votes
    9y

    @Clay Scott no problem, it will help alleviate a lot of issues

    Good luck 

    [email protected]407-448-6679Podcast Guest on Show The Key to Scoring Discounted Deals in One of America’s Hottest Markets
    Compass | St. Pete514 Reviews
    WebsiteView Page
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  • Paul Ronto
    Investor · Fort Collins, CO · Member since 2017 · 169 posts · 119 votes
    9y

    I agree with @Anthony Hurlburt , I would tread carefully here as it could be twisted to appear as an unfair practice by Fair Housing laws. You're safer bet is to go with household total income as a 3x of the rent, which can include income producing people on the lease but not add additional provisions for non-income producing occupants. 

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