Don’t measure up to 3x the rent

5 Replies

so in my case I live in an area where the cost of living relatively cheap yet I’m able to afford my rent which 975 however I do not make three times my rent in monthly income my question is what are people who are similar situations do when everyone is asking for 3x the rent and you don’t make the cut but you have a family that needs a place to stay

Some landlords/property managers only require that you earn 2x or 2.5x the monthly rent. You could also get a cosigner to help make up the difference between your income and the landlord's income requirement.

First step is realize your need for a home for your family doesn't negate what land lords/PMs require to rent to you.

Second step and a possible solution is to the problem is put yourself in the LL/PMs shoes so you can understand why they have that requirement.  It's not just an arbitrary number we pull out of thin air.  It's based on past experience of having tenants fail to have a successful lease.

Yes, today you are making your $975/month rent payment with no problem, and my assumption is your month income is below $2,925/month since that would be 3x the rent, and your post is all about not making 3x the rent.

So life if going fine today, but tomorrow your transmission may fall out of your car and need $2000 worth of work.  Uh oh.  It's going to hard to choose if you want to eat, pay your rent, or fix your car...because adding all three up means you go over budget.

LLs/PMs are looking for STABLE tenants, period.  We don't like drama.  There's always "something" that comes up:  Life happens.  Bad luck.  Unexpected emergencies (aren't all emergencies unexpected?).  It all creates the opposite of stability.

Evictions cost a lot more than many tenants realize.  Not only do we get no rent for a month or two, we also have to pay legal fees, and frequently there are damages to the property as no one likes getting kicked out of a house and sometimes folks take revenge on the property owner/manager.  This amount can quickly eat up the deposit and start digging deeply into our pockets.  We don't want evictions regardless of the reason, and our experience teaches us that people who make less than 3x the monthly rent are the most likely to get into trouble when "something" happens.

So what you need to do is provide something to reassure the land lord.  How about a double security deposit or two months rent paid in advance?  Some states allow that: others do not.  Perhaps you need to increase your income to more than 3x the rent or look for a less expensive unit where your income meets the 3x the rent test.  I don't know the answer, but the goal here is not to complain online about LL requirements: the goal is to find a home for your family.  I've given you a few thoughts.  There are others.

@Erik W. gave a great and detailed answer.

Not paying more than 3x a person's gross income for housing isn't just off a LL requirement.  That is an across the board recommendation to consumers from economists, financial planners, banks.  Everyone.

When people start inching past that, whether it's rent or a mortgage, it starts becoming increasingly more difficult for those individuals to live comfortably within their budgets.

Like anything else, it can vary by individual.  I have certainly had tenants who should have easily been able to afford the rent based on their income.  But managed their money so poorly, it was usually excuses and late payments until finally they either crashed and burned.  Or I gave them a 30-Day Notice to Vacate because I was tired of having to nag and babysit grown adults, especially when there are so many great tenants out there.

That's another example of the risk LL's take with tenants, even with people who "on paper" shouldn't have trouble.  So it's that much more risk when it's someone who "on paper" looks like they might be getting themselves under water.  Though you do sound like the other side of the coin from my example.  Someone who manages your finances quite well, despite being a bit house-burdened with your expenses.

To give potential landlords some additional reassurance in renting to you if they require 3x income, I'd also suggest you offer them a qualified co-signer and/or first and last month's rent along with the security deposit.  Or double the security deposit.  If you have a pretty decent credit score, like over 700 or so, I'd also bring that up as a show of how responsible you are with all of your bills.

@Quinton Stacy

It’s based off of banks numbers also . There’s a reason for it . It’s to mitigate risk . I’d either find a job in the area that pays higher , find an understanding landlord , a cheaper class neighborhood ,or move to a different location