How much should my tenant make if Rent is $1,680, in the DFW area?

[Tiia Hyrske]

How much should my tenant make if Rent is $1,680, in the DFW area? 

[Ty Coutts]

Hey Tiia,

In the DFW area, landlords often use a rule of thumb that a tenant's monthly income should be around 3 times the monthly rent to qualify. Here’s how you can calculate the income requirement:

Monthly Rent: $1,680

Income Requirement Calculation:

Multiply the monthly rent by 3 to find the minimum monthly income required:

1,680×3=5,040

Therefore, a tenant should ideally have a monthly income of at least $5,040 to comfortably afford a rent of $1,680 per month in the DFW area. Keep in mind that individual landlords and property management companies may have slightly different criteria or additional requirements, such as credit score, rental history, and debt-to-income ratio. These factors also play a role in determining a tenant's eligibility. Please feel free to reach out to me directly if you need!

[Kevin Sobilo]

@Tiia Hyrske, the common benchmark is GROSS income 3x rent. So, $60,480 in household income per year.

However, I personally go 1 step further as many people have outsized debt obligations. relative to their income.

I also require:

Rent + Monthly Debt <= 45% of GROSS monthly income

Example: So, someone making $6,000 per month ($72,000 per year) meets the initial income requirement BUT if they have a $750 car loan, $250 child support payment, and $250 credit card payment $1250 total then

$1680 (rent) + $1250 (monthly debt) <= 45% x $6000 (monthly income)

$2930 <=$2700 (DENIED)

[Clint Jusino]

Quote from @Kevin Sobilo:

@Tiia Hyrske, the common benchmark is GROSS income 3x rent. So, $60,480 in household income per year.

However, I personally go 1 step further as many people have outsized debt obligations. relative to their income.

I also require:

Rent + Monthly Debt <= 45% of GROSS monthly income

Example: So, someone making $6,000 per month ($72,000 per year) meets the initial income requirement BUT if they have a $750 car loan, $250 child support payment, and $250 credit card payment $1250 total then

$1680 (rent) + $1250 (monthly debt) <= 45% x $6000 (monthly income)

$2930 <=$2700 (DENIED)

I like @Kevin Sobilo method. Very creative. I feel this is the best way to handle this situation. Another question I have is your future tenant going to be a section 8 tenant? I currently have one on my second rental and the strategy above doesn't apply. The government for my tenant is paying the full rent amount due to low income. I did do a background check, credit score, and talked to the previous landlord to ensure they are responsible. Good luck!

[Tiia Hyrske]

Thank you!

[Tiia Hyrske]

Thank you! Yes try to do the due diligence -- thanks again

[Drew Sygit]

@Tiia Hyrske hmmm, have you heard of this thing called Google?

https://www.google.com/search?q=how+much+income+for+rent&...

This is such a basic question and if you can't put the effort into researching the answer - you're highly unlikely to succeed as an investor.

[Tiia Hyrske]

I did Google it and received very varied and sometimes confusing results - most of which I also already knew. It is a basic question with many variables and posting here already yielded insightful helpful comments. Keep spewing your vitriol. I may not succeed as an investor - my happiness or worthiness will never depend on that, however. I measure my success on how I treated other people on a given day. All the Best!

[Kevin Sobilo]

Quote from @Drew Sygit:

@Tiia Hyrske hmmm, have you heard of this thing called Google?

https://www.google.com/search?q=how+much+income+for+rent&...

This is such a basic question and if you can't put the effort into researching the answer - you're highly unlikely to succeed as an investor.

@Drew Sygit, did you find my response on google? Very Unlikely. 

I guess that means YOU are the one likely to fail since you didn't know where to come looking for answers!

[Drew Sygit]

@Kevin Sobilo it's actually on our website, which Google can lead you to.

Anyways, you missed the point of my response.

[Kevin Sobilo]

Quote from @Drew Sygit:

@Kevin Sobilo it's actually on our website, which Google can lead you to.

Anyways, you missed the point of my response.

Since I came up with it on my own that seems dubious at best. Nothing magic just took cues from how mortgages are done.

I think you're the one who missed the point of my response. If you haven't caught on by now, there isn't much hope for you as an investor. Cash-out now or hire someone more competent to handle your affairs.