Posted over 4 years ago

Can your tenants afford RENT + UTILITIES? 30% RENT 6% UTILITIES

This is another revisit to a prior blog where I address the issue of tenants and their ability to pay their utilities.

We always discuss how you should only be paying 30% of your monthly after tax income on Rent/housing.

Let't take some numbers from 2019. Median household income in Worcester is just over $48k. This is $4k a month

Let's even say you don't pay any taxes!!!!!

30% = $1200 for rent

6% for utilities = $240

First off, there are not any $1200 apartments anymore, so let's call it $1500

if you have internet $50, Electricity $100, Heat $150 that is $300/month

so just Rent and utilities has broken your budget. for $1800 or 45% of your GROSS MONTHLY INCOME

IF YOU DON'T THINK THEY CAN MAKE THESE PAYMENTS, YOU SHOULD BE SELLING YOUR RENTAL PROPERTIES AS THINGS WILL NOT GET BETTER.