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I would want to know how much they receive in monthly SS. If they plan to supplement that with retirement withdrawals then I want to make sure the amount they plan to withdraw is reasonable (below 4%).
$4k seems high for a retiree on SS only. They should be getting $12K per month in SS and retirement. It seems unlikely they can afford this place. I wouldn't want them taking so much from retirement savings to pay rent.
I'm just a mom-and-pop landlord, but we do own SFRs that we rent out for $4k/month and up, and just rented one of them out pretty recently. If I had received an application with those numbers, I would have passed... especially since it hasn't been too difficult to find applicants with less financial risk.
4000x12 months is 48k per year. A “young” tenant with $150K salary would qualify but might lose his job in a couple of years. How old is the retiree? How long does he expect to stay? He looks good for at least 3 yrs, more if the markets don’t take a dive. Don’t be an ageist. Just be willing to evict anyone who doesn’t pay the rent.
Also, he might be getting as much as 40k a year in SS to start with.
4000x12 months is 48k per year. A “young” tenant with $150K salary would qualify but might lose his job in a couple of years. How old is the retiree? How long does he expect to stay? He looks good for at least 3 yrs, more if the markets don’t take a dive. Don’t be an ageist. Just be willing to evict anyone who doesn’t pay the rent.
Also, he might be getting as much as 40k a year in SS to start with.
$48k a year in SS + $40k draw down is still only $88k/year in income. Even if that $88k wasn't market-dependent, it's still WAY too low for $48k/year in rent. In addition, evictions are a pain, and in some markets, especially so.
60x the monthly rent? My requirements are 3x the monthly rent.
I believe the 60x is for annual income, not monthly. (Ex. An applicant should be making $60k/year in order to afford a $1k/month unit.) In that context, your requirement would be that their annual income should be 36x 1 month's rent.
Personally, we use 40x. So for a $4k/month rental, we would want to see a minimum of $160k annual income.
I believe the 60x is for annual income, not monthly. (Ex. An applicant should be making $60k/year in order to afford a $1k/month unit.) In that context, your requirement would be that their annual income should be 36x 1 month's rent.
Personally, we use 40x. So for a $4k/month rental, we would want to see a minimum of $160k annual income.
I know the rule of thumb is that the requirement for a lease is income of like 60x the monthly rent.
what if its a retired person though and only "income"is only SS , but they have assets at a brokerage firm
this person has a million dollars at 70% stock 30% bonds in liquid assets and the monthly rent is $4000 or 48K per year.
They 60x rent is income requirement of $240,000
so they dont have income of 240K....
would a management company consider the size of the account as sizable enough?
thx
Unless the assets are kicking off a lot of income, they can't afford it.
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