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A friend of mine who is in his late 50s is planning to retire this year. He wants to move to Florida and rent an apartment for a year or two before buying. He flew down there and looked at quite a few places and was handed a rental application. He was told that he needed to make three times the rent in a salary each month to qualify for an apartment. He told the rental agent that he was retiring to Florida and would not be working and was not yet eligible for Social Security or will be get a pension. Instead he will just be pulling money out of his retirement accounts, savings and investments each month for living expenses. The rental agents looked at him like he was crazy. Basically he told my friends, no income no apartment.
So if this is true how do other early retirees get an apartment if they are not getting a pension or Social Security but have significant assets?
It is a little more difficult, since landlords, like lenders, tend to have their little boxes where they look for A, B, and C. Some of the big companies have trouble getting past any application that doesn't fit inside their mold.
Basically, I would avoid the super big companies, or if they are the only option, try going in in person, or contacting a live person via phone or email. Don't just use the application on their website, as it may filter you out with no living person ever even looking at anything.
The retiree needs to be prepared to show proof of assets, instead of proof of income. This may include bank statements, IRA statements, etc.
Personally, I love having retirees with assets as tenants. They typically take great care of the place, and I don't have to worry about them losing their job and not making rent.
I would say it's definitely a question of who you rent from. I am currently living on my IRA, and had no problem finding a place. I did rent a month-to-month until I found one I was ok with signing a lease with, that was ok with my "income" situation. It's a corporation, however the on site management got me approved with no difficulty (apparently - I'm here!), no hassle. I did not plan on this situation, so I know I'm lucky, but I would say you just have to keep looking - there are some out there. I will add that I think the "personal" contact made a big difference. I avoided going through any kind of agent, I personally went out looking for myself. I did consider setting up an automatic monthly payout through my IRA, which could be verified on paper, but I found a place so I didn't go that route.
I was able to successfully rent an apartment without employment income. A few months ago, I moved five hours away to a larger city. I was not employed at the time, so I had no income. The apartment ran a credit check and verified my bank savings account. They required $12,000 in a bank account, if not currently employed. Also, they were very thorough on screening my application:
I had years of solid rental history (no late rent payments, no evictions, no damages, no trouble making) that was easily verifiable through my previous Property Manager. Also, I had years of successful employment prior to leaving. I heard that my current apartment manager contacted both my former Property Manager and my former Human Resource Dept. for references. The manager wanted to make sure the money I had in my bank account came from legitimate employment (rather than illegal activities) and I was capable of obtaining future employment.
If your friend retired early, then he must be financially well-off. If he is trying to get an apartment, I would advise him to open a separate savings account and deposit about $20,000 of his cash. Keep the bulk of the savings in a separate account that is not included in the apt application process. (Don't show how much money he truly has in reserve). After being approved & moving-in, he should transfer most of that $20,000 out of that savings account or close it. That's what I did.
Another option for your friend, if he has spotty references and is desperate for an apartment: Offer to pay three months of rent in advance as a credit to his account, and then keep making each monthly rent payment 90 days in advance for the first year.
I don't care if tenants have a job. What I care about is whether I will get my rent and have my property taken care of.
No income? Show me where the (legal) money is going to come from to make the rent payment, and if I can see that there is money to pay the rent, then I'm happy.
Perhaps if he rented in one of the 55+ apartment complexes he'd have a better chance of qualifying as most will not require that the tenant have income that is 3x the monthly rent.
I've always wondered about this. In my mind, I figured I would offer up a few months of rent in advance, and if I knew for sure the place was good (friends living there) maybe even an entire year.
All you need to do is tell them to call your bank or CPA, I have rented and told them I do not give out income statements, they look at your net worth,
All you need to do is tell them to call your bank or CPA, I have rented and told them I do not give out income statements, they look at your net worth,
It is called a letter of credit.
I don't think this is accurate. A letter of credit guarantees payment. Here, the bank can not really make any guarantees. All they could do is state how much you have in assets with them, but I don't think this is a service banks generally provide.
(Do correct me if I'm wrong, but I don't think I am)
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