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I now require an in-home visit of their current residence before giving final approval as well. Sticking to these requirements has never failed to serve me well and is the reason I have great tenants.
How would you handle someone who is currently living out of state, or maybe someone who relocated for a job and is temporarily living in a extended stay motel? Reject them out of hand? (I’m not trying to bust your chops, just curious).
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,356 posts, read 8,588,422 times
Reputation: 16698
Quote:
Originally Posted by NJ Brazen_3133
My small LL operation employer does 60X monthly for annual income minimum. It has been as high as 80x in the past. Must have over 700 credit. Plus the employment has to be practically white collar. If not then need guarantor. This is for Manhattan in NYC (not Kansas).
So if rent is 5000 a month in Manhattan, income must 300k a year? WOW!
Good points Beachbum.....I generally agree, except that as a Licensed Contr, using handymen is a recipe for disaster. There are good reasons that people are licensed (In the states where they are).
Licensed Contr just pull permits and sign papers. It is the handymen working for them that actually do the work especially if this is a large operation. The licensed guy just makes sure everything is done right.
Licensed Contr just pull permits and sign papers. It is the handymen working for them that actually do the work especially if this is a large operation. The licensed guy just makes sure everything is done right.
Handymen don't (generally) work for GCs. They are sole proprietors with their own businesses, licensing and insurance...
What are LLs currently using as criteria? Still 650 min credit score? 3x rent for income? No BKs or evictions?
I use 640 minimum credit score, 3.5 times the rent and no evictions. I own rental property in Az and it's farily easy to remove tenants who break the lease agreemen.
Recently I accepted a renter who filed for bankruptcy several years ago, so her credit score wasn't good. However, she earns 75k a year and the income was verified. She was renting from an owner who is selling the home. He told me there were no problems with the woman, but you can never be sure.
This woman paid a pro-rated rent for June along with one month deposit. She asked if she could pay July rent on the 1st instead of with the pro-rated June rent. I said O.K. Again her verified income showed she could afford the rent. No evictions and nothing out of the ordinary outside credit card debt and a car loan.
On July 1st she didn't pay the rent, nor did she contact me. This set off a red flag.
I texted her, Can you please check your banking? I haven't received the rent. Thanks John
She didn't respond until the next day and said moving expenses and recent car trouble left her short and could she pay this Thursday?
I responded, O.k., but I have sent you a five-day notice for non-payment. Per our lease agreement overdue rent must be paid by certified check or money order. The late fee is $25 per day. No partial payment will be accepted. Unfortunately, I am under financial pressure and need the rent to be paid on time. Please let me know when you want me to come by and pick up the certified check or money order. Thank you.
She replied, "My son is in the ER and I'm under a lot of stress. Am I being evicted?
I said, no, I just need to be sure the rent is promptly paid each month. I'm under a lot of financial pressure. The July rent needs to be paid within five days after receiving notice being sent by certified mail.
She said, I will pay it Thursday for sure.
I said, Thank you.
Again this is a new tenant. If she was going to be a week late in paying the rent, she should have contacted me. The fact she didn't makes me nervous which is why spelled out the terms of our agreement. No partial payment and I will come by to pick up a certified check or money order. If the late fees haven't been included I will not accept the check or money order.
I would prefer not to evict the woman, but we have a one-year lease agreement and don't want to chase down the rent every month.
I like things simple: I make sure my rentals are in very good condition before move-in. And if there is a problem I will be over within an hour.
In turn I want the rent to be paid on time. She has bills but...so do I.
Each landlord has his very own rental criteria. There is no universal criteria for selecting tenants.
But basically, landlords are trying to find a tenant who will pay the rent on time, not damage the building, and is at least halfway reasonable to work with.
So if rent is 5000 a month in Manhattan, income must 300k a year? WOW!
Standard is 40x. Some places are 40x among all tenants on lease combined, others are at least one tenant has to do 40x alone. Guarantor (if used) is normally 80x. 60x isn't unheard of but also very much not the norm.
5000 a month rent in Manhattan would be either someone very wealthy (Wall Street, family money), upper middle class DINKs, or being split by 20-30 something roommates. The last is the least desirable for landlords (turn over more frequently, tend to put more wear and tear on units) but are a large chunk of the market and places that turns them away tends to be a bit cheaper relative to those that accepts them all else held equal. Anyway that was the case when I was one of those 20-30 somethings renting in Manhattan.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,356 posts, read 8,588,422 times
Reputation: 16698
Quote:
Originally Posted by ALackOfCreativity
Standard is 40x. Some places are 40x among all tenants on lease combined, others are at least one tenant has to do 40x alone. Guarantor (if used) is normally 80x. 60x isn't unheard of but also very much not the norm.
5000 a month rent in Manhattan would be either someone very wealthy (Wall Street, family money), upper middle class DINKs, or being split by 20-30 something roommates. The last is the least desirable for landlords (turn over more frequently, tend to put more wear and tear on units) but are a large chunk of the market and places that turns them away tends to be a bit cheaper relative to those that accepts them all else held equal. Anyway that was the case when I was one of those 20-30 somethings renting in Manhattan.
I was just picking 5k, but what is a rent range for the 40x tenant?
I was just picking 5k, but what is a rent range for the 40x tenant?
There isn't really a standard, NYC has a huge range based on precise location. $5K would be a one bedroom in the fanciest parts of Manhattan, or a small three bedroom in a good but not top-tier part of Manhattan / north Brooklyn split among friends. Meanwhile go out to the ethnic areas further out on the subway system and you're talking under $2K for a 1 bed.
Back when I lived there about $1.5K per working adult was closest thing to average people actually paid in the circles I ran in (young professionals, keeping in mind that's per person paying in, not per apartment), but it's probably higher now with inflation. Seeing the handful of buildings priced below market with de facto no roommate rules by not allowing combined qualification to hit 40x was always frustrating but most listings allowed it.
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