What Do Landlords Look For in Income?
When you purchase a house, the mortgage lender takes a close look at your income when evaluating the transaction. Landlords have the same reservations as mortgage lenders when it comes to granting you the use of their property. It's helpful to get an idea of what landlords will look for in terms of income before you go apartment hunting.
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Tenant Screening Procedures
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Before a landlord decides to approve a rental application, he will most likely perform a few key screening checks on the applicant. One check involves the applicant's credit report -- the landlord determines if the applicant has consistently paid his bills. Another check is for a history of evictions, which would most likely disqualify the applicant. Finally, the landlord checks the applicant's income and employment situation to make sure he can afford to rent the apartment for the term of the lease.
Required Income
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The rule of thumb that many landlords go by is that an applicant's gross monthly income should be at least 300 percent of the proposed monthly rental fee. In other words, the rent should be no more than about 33 percent of the applicant's income. So if the proposed rental fee is $495 per month, the applicant should make at least $1,500 per month. The exact rules and requirements vary according to the landlord's rules.
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Solid Income Source
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Finding out the applicant's current income as related to the rental cost isn't the only thing that a landlord looks at when evaluating the potential renter's application. The landlord also wants to make sure that the applicant's employment situation is solid before renting the space. For instance, if the potential renter was just hired for her current job, or has a spotty employment history, that could send up red flags for the landlord. An applicant who has been working for the same company for at least five years has a better chance of getting the apartment over someone who was just recently hired.
Suggestions
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If you're thinking about renting an apartment in the near future, plan ahead. Stay at your job for at least one year and clear up your credit history before you attempt to apply for a new apartment. If you have additional income sources, such as alimony or self-employment income, in addition to your regular job, make sure you inform the landlord of that fact to boost your chances of approval.
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