Tenant screening: Debt-to-Income or Rent-to-Income?

[Jacob Hanson]

It seems like it's most common to use a 33% rent-to-income ratio to screen tenants, but debt-to-income seems like a smarter way to screen tenants to me. A tenant may have a good RTI, while having a poor DTI. Isn't it smarter to use DTI?

What debt-to-income ratio should be used?  I expect it can be a little higher than the typical 33% debt to income ratio.  What is everybody using?

[Jacob Hanson]

Credit reports should include reported debts, including credit and loans, I believe.  I can't imagine there's a way to get unreported debts and that would have to be left out of the equation probably.

But yes, someone could have a high paying job, but have a pile of student loans, a new pickup and boat to match that were both bought with loans. Any number of things could make someone with a good RTI have a bad DTI, which I think should be more important to landlords.