What rent to income ratio should I be looking for in San Diego?

[Jamie Powers]

What rent to income ratio should I be looking for in San Diego?

[Dan H.]

Income to rent ratio:

We use 2.5X in our C areas and 3X in our B areas.  So far we have not had a tenant, that is established - more than a couple months in the unit, not be able to meet their rent commitment using this criteria.

We have some tenants in our C area that would not have qualified if we used 3X.  For example, we have a tenant where one gets a small disability check and the other is a short haul truck driver.  Between both they made at move-in (3.5 years ago) upper $40s (forget the exact amount but like $47K) but 3X their rent is over 52K.  They have been a great tenants for 3.5 years so we have only raised their rent $50 in that time (so they may be over 3x today).

The median household income for a family of 4 in San Diego is $63.4K.  In class C areas, there are many families that make noticeably less than the median.  The median family of 4 income where most of our class C properties are is $42.5K city wide.  If our rents were set so that the median house hold in that area could qualify, our rent would be $1180/month.  All of our rents are above $1180/month and therefore if we used 3X in that area, we would have a fairly small pool of potential tenants.  2.5X has worked fine in that area.

Good luck