40X rent rule

[babo111]

Originally Posted by indravayu

Man, forget the 40x rule - I am apt hunting now and got an even crazier request (this was for a $1450/mo. 1br in Manhattan, which I am only $8k shy of qualifying for according to the 40x rule)...the landlord also wanted me to have $30-40k in SAVINGS!! I had to laugh at that; I'm in my 40's and, despite making a decent amount of money (though I am apparently a member of the working poor by NYC standards; only made $50k last year) have never had more than a few grand in my checking account for any extended period of time.

Reason for this is because NYC is very tenant friendly and if you don't pay rent, it takes a while for the landlord to evict you legally which means thousands of dollars he or she will lose. Because of that landlord wants some form of assurance that you can actually pay the rent.

For example, should you lose your job (god forbid) and cannot make income, have no savings. But decide to squat and get landlord to evict you because you have no place to go. It can takes months, not talking weeks for LL to get you out. If landlord was also aggressive on his financial plans and really needed monthly income from rent to help cover his mortgage and rest. He or she will now be screwed and be in bad situation. Hell if you had some circumstance like eldlery, pregnant, etc. then LL cannot evict you during times like winter. There are cases where it took years to get someone out...

I think majority of people have knee jerk reaction to omg 40x rule, and all this blah blah... But don't take the extra step to understand where and why these things are in place. People overlook the downside of having very tenant friendly laws in NYC. LL wanting stuff like 40x, good credit, lot of money in bank is because of all these stuff. You don't see things like 40x if it's easier on LL to evict someone...

That said we need a good balance between the two but NYC is eschewed too much to tenants.

Edit: I never owned a home personally or was ever a landlord. However I spent some time looking into it to help my parents and ultimately advised against it due to their situation.

[indravayu]

Originally Posted by urbanlife78

I am a strong believer that one should have enough money in their bank accounts to cover 6 months worth of bills and rent just in case, which in NYC would be around $20-25K.

I'm a strong believer in that too - but it's a pipe dream for many of us (I'll never save that kind of cash in my life - I've hit the pay ceiling in my industry and though I make a decent living by national standards, it just keeps me at survival level in NYC without any real savings).

[indravayu]

Originally Posted by babo111

Reason for this is because NYC is very tenant friendly and if you don't pay rent, it takes a while for the landlord to evict you legally which means thousands of dollars he or she will lose. Because of that landlord wants some form of assurance that you can actually pay the rent.

I understand all that, but I've been renting in NYC since 1999 (first 8 years in Manhattan, the rest in Brooklyn) and never once has a landlord wanted to know how much I had in savings, no less required me to have $30-40k's worth! This is a first for me.

[hilltopjay]

Originally Posted by babo111

Reason for this is because NYC is very tenant friendly and if you don't pay rent, it takes a while for the landlord to evict you legally which means thousands of dollars he or she will lose. Because of that landlord wants some form of assurance that you can actually pay the rent.

For example, should you lose your job (god forbid) and cannot make income, have no savings. But decide to squat and get landlord to evict you because you have no place to go. It can takes months, not talking weeks for LL to get you out. If landlord was also aggressive on his financial plans and really needed monthly income from rent to help cover his mortgage and rest. He or she will now be screwed and be in bad situation. Hell if you had some circumstance like eldlery, pregnant, etc. then LL cannot evict you during times like winter. There are cases where it took years to get someone out...

I think majority of people have knee jerk reaction to omg 40x rule, and all this blah blah... But don't take the extra step to understand where and why these things are in place. People overlook the downside of having very tenant friendly laws in NYC. LL wanting stuff like 40x, good credit, lot of money in bank is because of all these stuff. You don't see things like 40x if it's easier on LL to evict someone...

That said we need a good balance between the two but NYC is eschewed too much to tenants.

Edit: I never owned a home personally or was ever a landlord. However I spent some time looking into it to help my parents and ultimately advised against it due to their situation.

Very true.

[urbanlife78]

Originally Posted by indravayu

I understand all that, but I've been renting in NYC since 1999 (first 8 years in Manhattan, the rest in Brooklyn) and never once has a landlord wanted to know how much I had in savings, no less required me to have $30-40k's worth! This is a first for me.

Not all landlords are like that, there are some out there that have insane requirements that are near impossible to meet. I am confident that you can find something for yourself without having to have that much in your savings.