Tenant Financial Requirements
Most landlords require that your guaranteed income be between 40 to 50 times the monthly rent. For example, if the monthly rent were $3,000 a month, you would need to show a guaranteed income of at least $120,000 per year. ($3,000 x 40 = $120,000)
An estimated bonus may be considered if a documented history of bonuses can be provided.
Discuss your financials and potential credit problems with your agent in advance. Being on the same page with your PROMRE agent in regards to your financial situation can save an enormous amount of time and energy.
If your guaranteed yearly income falls below the landlord’s requirement, there are other factors that may make a lease possible: income from other sources, housing allowances, or the use of a ‘guarantor’ (see explanation below), for example. Landlords may accept roommates’ combined incomes to determine financial qualification for an apartment.
In other words, if the rent for an apartment is $2,500, the landlord would want to see a total income of about $100,000. If both roommates make at least $50,000 annually, they could “combine” their incomes in order to qualify for the apartment. If the landlord does not allow for combined incomes, or if the combined total is not enough, they will require a guarantor or lease co-signer, a person who accepts financial liability in the event you or your roommate fail to pay the rent.
Criteria for Guarantors
Landlords require that guarantors make between 80 to 100 times the monthly rent in annual income. This means that for a $2,000 apartment a guarantor must show a guaranteed income of at least $160,000. ($2,000 x 80 = $160,000)
Most landlords prefer that you use a guarantor from the local area. Some landlords are more flexible and will accept guarantors from anywhere in the U.S. If you intend to use a guarantor from outside the local area, please notify your agent before you start your search.
The guarantor will be required to produce the exact same paperwork as the potential tenants.
