Do you rent to someone without a job but with money in the bank?

32 Replies

"I'm moving to the area and I have plenty of money in the bank but I have not secured a job yet. Will you rent to me?"

I seem to get this question every so often and I was curious what other landlords and property managers do... is there a magic number in their bank account at which you will rent to someone with no current income?  

Yes, i have done this many times and each time it has worked out perfectly.  Just screen them as usual and ask for a copy of the ending balance on their account, get a good deposit etc 

If they say they have a new job ask for copy of their offer letter, etc. 

Also, i dont have a magic number. But maybe 5x rent? 

I am in this situation a lot. I dont have a “job” and i am moving around seeing where I want to move permanantly.   So i can understand it from both sides :)

My current landlord rented to me without a job, but with money in the bank. I moved here from out of state for retirement after selling my house there, so I had no job or rental history. My story was consistent (out-of-state driver license and car registration).

I needed to show a savings account statement that had a year's worth of rent on deposit. I also had to undergo credit and background checks, for which I paid the regular application fee with my out-of-state checks (the landlord wanted to make sure they didn't bounce).

@Matt J. It depends on the circumstances. If they are moving and have consistent, high paying, employment history in a field that has opportunities where my property is, and they pass credit and background, I probably would. Other than that scenario, probably not, without a very good story.

@Jason DiClemente  that seems to be discriminatory against the self employed/retired/independntly wealthy. 

Screen as per your normal standards, ask for proof of x $ in bank.  Seems like a win win 

@Mary Mitchell as far as I know they arent a protected class, so I can refuse based on income or wealth

@Jason DiClemente you absolutely can! I was just trying to point out that someone without a job might be a better tenant due to not relying on an employer  .  

I hope folks DO rent to the folks that dont rely on jobs as I am in that “class” as are retired folks, trust fund folks, etc ;)

As far as I know, you can always refuse to do business with a person solely on grounds they have too much money. The risk to the landlord is that the wealth might come from illegal activities (such as drug dealing or money laundering). Banks have a "know thy customer" requirement, however, which means they have to report large cash transactions and other suspicious activities to the government. For example, former New York State Governor Elliott Spitzer was turned in by his bank for dealing with a shell corporation that didn't seem to have any legitimate commercial purpose (it wasn't selling a product or service). My landlord only accepts checks and money orders (or ACH transfers from a bank account for a fee). It won't accept cash.

I read where some landlords have to document a prospective tenant's income as a requirement of the landlord's lender. If the landlord is mortgaged to the hilt (high LTV), the lender wants to make sure the tenants are able to handle the rent payments comfortably. Too many evictions for non-payment of rent would put the landlord at risk of default.

@Mary Mitchell by the way the question was presented, the person has no income, which of course is different than no W2 income. Of course I would rent to someone that is retired or self employed, so long as they can verify their income. Like I said, there could be other circumstances where i would accept someone with no income, but it would have to be a very logical explanation.

Yes, I would accept them if they pay a higher deposit and a certain number of months in advance. The last one I did paid a double deposit and three months rent before occupancy, total of $6,000.

Thanks to all for the replies.  Yes, I was referring to someone who had no current income - usually they are relocating into the area and haven’t gotten a job yet.  I’m glad to count rental income or whatever income is allowing a retired person to be retired but in this instance the person has no job but has money to move, start school and find employment comfortably without needing to get a job right away.

We rented to a woman in the 'entertainment' business. No W2. Best tenant ever. 

@Matt J. Yes I have done this. The family was relocating from another state and temporarily living in a hotel until they found a home to rent. They had great credit score, good payment history, husband had a job at Lowe’s and wife was still looking for work and child care. They did not have any excessive debts and no criminal history. They owned there house where they lived prior and had sold it so not references but the credit report showed good payment history. These tenants take better care of the house then I did when I lived there! Definitely run credit check and criminal check though.

One option that has worked for me in the past is to have them prepay a certain number of months.  After that, they can switch to a month to month agreement.  This allows for you to guarantee a number of months being paid, followed by the ability to quickly have them leave if they stop paying.  Depending on what state you invest in, it might be fine to give them a year lease in the normal fashion (as long as they won’t take 6 months to evict if they stop paying).

My screening standards require that a applicant have a minimum 2 years with the same employer or be receiving a pension. 

No I would not rent to some one without a job but with money in the bank. There is no certainty that they will not go out tomorrow and spend it all on toys.

Originally posted by @Thomas S. :

My screening standards require that a applicant have a minimum 2 years with the same employer or be receiving a pension. 

No I would not rent to some one without a job but with money in the bank. There is no certainty that they will not go out tomorrow and spend it all on toys.

 Will you not rent to folks say that have no w2 job but get income from elsewhere? Or what about someone with a monthly trust stipend or other folks that have funds not from a W2 source? 

I would imagine with the gig economy in full force there are many such individuals. 

And fwiw, i feel there is never any guarantee that anyone will pay rent - including those with jobs ( i dont know what type of rentals others have but mine are higher end so self select to a large degree) 

It is so interesting reading what others do :)

I look for tenants that will hopefully stay along time. I never do a lease shorter than 24 months and the prospective tenant needs some kind of income.  Having lots offish is great but they will probably move and to buy house sooner than I'd like. Unpaid rent, tenant damages and turnover are three areas I try to avoid.

  

@Matt J. I’ve done it but only because the tenant had the full 12 months worth of rent in savings. Like others say, just vet them thoroughly. Especially speak to last employers and make sure they’ve always worked. People that work hard don’t stop, and people that go unemployed for prolonged periods and mooch or work the system also don’t stop.

@Matt J. We encounter this situation from time to time and we just explain to the potential tenant that we will more heavily weight their credit when considering their application and that we will need to see bank statements from wherever their money will be coming from to pay for their expenses. 

Without any proof of income this bank account is essentially their income stream.

@Matt J. Nope. But, I have modified my criteria for somebody relocating (but already with a job), and with another tenants credit score, both accepted due to money in the bank. 1 of my tenants was in the same industry as his prior job, but only had his job here for one month. Made great money and had money in bank. 1 of my tenants had a credit score of 590 (I like 600), but had $20,000 in Bank. Credit score happened when her ex ran up credit cards in their name (verified he now owes the debt and not her).

I want to see bank statements that shows (1) how much money there is in the bank and (2) the flow of their money. If the money is moving slooooooowly out then maybe. If they have money but there's a quick outflow and no inflow then forget it.

I have and will do it again. You have to look at the whole picture whether it is a renter or you are buying a property; it is never 'one thing'.

If they have money in the bank, first + last + security might possibly work. As has been mentioned, there is a difference  between "the Dude" from The Big L. and a person who is in between jobs, MIght take a little Q&A and research to determine who you're dealing with, but.... Also asking what they are going to be spending their money on is important. Finally I would just note that sometimes with things such as this you get a vibe about someone, and the vibe can indicate that they are a wild card. Money + no job probably equals wild card you want to stay away from because they are a flaky type, or it means you're dealing with someone who isn't living paycheck to paycheck - obviously a good thing!

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