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Landlords...what percentage of gross income should go to rent and what is the highest you will take when looking for prospective tenants? What other factors are most important to you for a prospective tenant? Your input is appreciated.
the general rule of thumb is gross annual income should be 40 times the monthly rent.
so if the rent is $1500/month, tenant(s) income should be at least 60K/year.
some one once told me he always charge a little below market so the tenants know they are getting a good deal and not to trash the place and pay their rent on time !
here in nyc lowering rent is not done on most rentals since more than half of all rentals fall under stabilization…once you lower the rent based on our new rental laws , all future increases , percentage wise are off the lower amount and restricted in size
Who comes up with these rules of thumb? It seems they should be situation or location dependent. A person not needing a car. A childless couple. A trust fund kid on a forever vacation. I know it helps to have a starting point in these decisions but I imagine experienced landlords look at specifics not generalities.
some one once told me he always charge a little below market so the tenants know they are getting a good deal and not to trash the place and pay their rent on time !
A bit of a lie in that . By far the majority of tenants have no gratitude about their housing and they feel they are entitled to get low rent and low rent is no reason to take care of the rental. They are entitled to have the landlord take care of them and clean up after them and repair what they break, no matter what rent they are paying and if they have had low rent for decades, they won't be happy for all the years of low rent, they will be furious if rent is raised.
The low rent tenants tend to be the most entitled and if the government is paying some of their rent, they think they deserve the five gold star treatment and deserve more than they are getting, so they tend to be unhappy because they are not receiving good enough free stuff.
My experience is that the low rent tenants are the ones who leave the most damage and dirt when they move out. The high rent tenants are much more likely to clean like they want their deposit back.
I don't qualify tenants based upon their gross rent. I require that rent be no more than 1/3 of their take home income. No matter how high the income is, it doesn't help me much if the tenant can't actually access and spend that income. I want to see available income.
For my rental properties in the Dallas/Fort Worth market, the lowest (not highest) gross income:rent ratio is monthly income must be 3x the rent. Other factors: credit scores 650+, consistent employment, no felonies, no evictions, proof of consistently paying rent for at least 12 months in prior residence. Also, no smokers, no co-signers.
And TBH - I also don’t want roommates or teenagers residing in the house. I don’t like roommates (meaning unattached adults sharing the house but not in a relationship with each other) because that tends to lead to tenant turnover and also each roommate having boyfriends/girlfriends staying over which simply means more wear and tear on the place and more drama (which leads to property damage.) I don’t like teenagers living there because it may mean unsupervised kids hanging out there which can lead to lots of property damage and neighbor complaints and tons of cars around the place.
Landlords...what percentage of gross income should go to rent and what is the highest you will take when looking for prospective tenants? What other factors are most important to you for a prospective tenant? Your input is appreciated.
My rentals are all $2K/mo. I go by a minimum of 3X gross income with a 675+ score. I’ll consider a lower score if there’s multiple people and one party solo has 3.5X income.
some one once told me he always charge a little below market so the tenants know they are getting a good deal and not to trash the place and pay their rent on time !
My father-in-law was one of those LLs, never charged rent that was out of reach and his loyal tenants took excellent care of the property.
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