3 times the rent "rule"

[George Pan]

Hello,

I just read the ultimate guide sticky post about screening and renting.

I have a question about tenant income.
They suggest that a tenant should have at least 3 times the rent in monthly (gross) income.
If we were to use an example of a 3 bedroom apartment for say $1,200 per month. So, each tenant is responsible for $400 each month. That means that each tenant should gross at least $1,200 per month or $14,400 per year!

I think that is cutting it a little too close?

What are your thoughts on that?

Which approach do you use when looking at income?

[Steven J.]

I think that with college students you'd have to adjust that rule. Many students aren't going to be making that much money a month - I didn't when I was employed in college - but I still had all my rents paid on time. Although I could be wrong I'm still working on my first deal.

I anticipate I'd be renting to college students. What you could put in place is making sure you have the parents number and information in case their kid can't pay up. Or if you're really cautious have them co-sign on the lease.