A possible tenant makes close but not above our minimum x3 monthly rent income. But receives extra in child support, would you accept that as a income?
The short answer is no. Child support is not reliable in most cases.
I could be wrong but I believe most banks wouldn’t count it either, so I wouldn’t either
I am still in the research phase of my first purchase and this is also a question I had too. You mentioned that the applicant is “close”. Depending on how close they are to the minimum, you’ll have to make that a personal choice I think. I wouldn’t count CS as a definitive income. I have 2 exes and went through about a 2 year period where neither paid and managed to go under the radar. State collection services are much better than they were 15 years ago but there are still ways to work under the table to avoid paying support.
It might also depend on how much debt the tenant has. If they are very close to your income requirements I may still rent to them if they do not have a lot of debts with the idea being that they could still afford the rent if the child support stopped coming. But if they have a lot of debt payments and their own income is not close to the income requirements, I would not want to risk the tenant not being able to pay the rent if the child support is not paid. Having a good rental history would be crucial in this decision too.
@Peter Kim No, I would not. It’s not verifiable/dependable income. That money is for the needs of the child(ren), not to pay rent.
@Caleb Heimsoth I work for a mortgage company and we do accept child support as income if the borrower wishes it to count towards their monthly income.
@Jack Bobeck if the child resides in the home, then child support would be supporting the child.
@Amy Herzing Agreed. Child support includes anything considered to be a need for the child. Housing, clothing, food, running water, etc. There is a lot of misconception over it. Even so, I wouldn’t count CS as a firm source.
Child support is counted by mortgage companies and credit card companies. Some states and counties actually prohibit discriminating based on source of income, like child support, alimony, veteran’s benefits, etc.
Personally, as a landlord, I would count it as long as it was documented (i.e. court ordered), verifiable and consistently paid. However, I would not count it if it was just an informal agreement between the parties and/or wasn’t consistently paid.
Originally posted by @Jack Bobeck :
Peter Kim No, I would not. It’s not verifiable/dependable income. That money is for the needs of the child(ren), not to pay rent.
Wouldn't the idea be a person needs "more" space due to the additional family member (child). Sounds like a valid "need" to me...
@Matt K. Child support is meant to provide support for the child. The roof over the adults head is the same roof that provides for the child, but what about food, clothing and items children need, but cannot get easily on their own. Hence the name Child Support. I see too many people abusing Child Support, not giving it and the parents struggle when there is only 1, with the roof over their head and the 25-33% of income for rent balloons to over 50% and then the single parent only pays for food and supplies and the rent is then last. Parents should put the kids first, that money should go toward the kids, not the rent. No matter if the CS would help pay for the roof. The parent has a responsibility to themselves and the kids to maintain the roof.
No do not count child support.
Income wise stick to your existing screening standards if you wish them to hold up in court in the future. A standard once compromised is no longer a valid standard.