Minimum Income

I have a single family home that i want to rent for 550 and have the tenant pay the utilities (water, and heat). I would like to know if there is some formula to determine the minimum amount of income a tenant has to make in order to rent my property.

I don’t do rentals, but I’ve seen property manager say 3x the rent is what their monthly income needs to be, and he’s the guru (I know you like the guru tag Mike). :biggrin

The goal is that the rent should be no more than 25% of the prespective tenant’s monthly income. I have seen people say 1/3, but I don’t know about that.

I use 1/3.

Mike

Is that 3 times their gross monthly income?

jd,

I like the tenant to have an income of at least 3 times the rent. So, if the rent is \$500, I like to see income of at least \$500.

property manager say 3x the rent is what their monthly income needs to be, and he's the guru (I know you like the guru tag

Stevie-o,

What did I ever do to you? I wouldn’t even call a low-life, scumbag, legal aid lawyer a “guru”. That’s just mean!

Mike

LOL…come on man, you got a book and everything! and it’s now available in paperback too!

You’re killing me!

Mike

I’m not following the math, Mike (but I haven’t had a full coffee dose this morning, either!). Did you mean an income of \$1,500?

Keith

I want to see income 3 times the rent. But more than that I want to see enough money to live on after the rent is paid.

If you had a place available for \$100 a month, you would want to see more than \$300 income, because no one can live on \$200 a month.

If a couple has 2 new Lincoln Navagators, they have some serious car payments, so you would want to take that into acount. If they have \$1600 a month in car payments, they can’t afford \$800 a month rent if they have 3 times the rent.

On the other hand, if the rent is \$5,000, the tenant might be able to live on less than 3 times the rent.

Just keep in mind that you aren’t doing anyone any favors to let them move in when they can’t afford to pay the rent. You aren’t doing yourself any favors, either, to accept a tenant who has no hope of paying you.