An income requirement is fairly standard for most of the landlords and property management firms that rent properties. Some rental seekers who have not run into this requirement before will be surprised that they need to show sufficient income in order to rent. However, it’s legal for a landlord to require this, even though not all of them do.
What to Expect for Income Requirements
For those landlords and property management firms that do ask for proof of income or assets, rental applicants can expect that the required income will be at least 300% of the monthly rent. Put another way, standard real estate and rental recommendations from personal finance experts mark the average income spent on housing at around 28 to 33%.
Rental applicants can also expect the income requirement to be part of a greater “basket” of financial requirements, where a landlord will usually look at the prospective tenant’s entire financial situation. For instance, if the tenant has less than the desired income, but has large assets or lump sums of money sitting in bank accounts, that can provide the basis for meeting the employment/financial requirement, especially if the landlord and rental applicant have a discussion about prompt rent payment.
Expecting Income Requirements: Which Places Check?
not all companies and landlords even ask for proof of income. Many will rely on personal judgment while showing rental applicants a housing space. This kind of “gentlemen’s agreement” can be entirely sufficient, since most renters do not enter a housing contract with the intention of defaulting on rent. However, for some landlords who have experienced problems, the income requirement is a very necessary part of a rental obligation. Often, larger communities or those that are professionally run will check income, where a single property rented by owner may not have this requirement.
Examining Housing and Rental Applications
For those higher rent properties that might require more income verification, those who are looking for a rental space can often identify these communities not only by the application itself and related documents, but by the walk-through that they do with the landlord or property manager. More expensive communities have more income requirements, and some renters are pretty skillful at recognizing the rental spaces that they can afford without asking about income requirements.
Some landlords will also do a credit check on rental applicants. More of those who rent property are using a credit check, just as more lenders are using this standard to sort out those who borrow money. It’s a good idea to maintain a good credit rating. In addition to credit checks, landlords will often go through additional expectations included in the formal lease document, whether it’s a comprehensive non-smoking policy, rules on pets, visitors or cohabitation, rules on signage or outdoor decoration, or anything else about a particular housing contract.
The above information can help renters who are looking for a new home space but wondering about how their income may apply to the average rental application.