Monthly Income Minimum?

Question

I have a 2 bed/1 bath unit just put up  for $1100/ month. I set a monthly income minimum of 3x the monthly rent. I have interest from college students who qualify, except for the monthly income. They make the bulk of their money in the summer and have a good savings, but they only have part time work now, that doesn’t meet the minimum requirements.

If I accept their application and allow them to rent, would that not be treating applicants differently, which is not allowed?

There are a lot of college students in the area, and I would like to avoid this dilemma in the future. How do other people handle this situation? I don’t ask for the amount of savings people have in my application, but is that something I should be adding on. Or depending on their savings, disregard the monthly income?

Taylor L. · Answer

Get their parents to cosign. Pretty typical strategy with college student tenants. Most college students don't make enough income to qualify for rental housing.

Account Closed · Answer

I don't have any experience in renting to college students, but would it be illegal to ask for how much in student aid/loans they have for the semester?  While it is not income in a traditional way, for rental purposes, it could be considered as a source of income (in a non-traditional way).

Randall Alan · Answer

We have the 3x as a standard as well, but not everyone fits the mold, right?  So what we do is mitigate the income risk.  How, you ask?  We ask for an additional month's rent as a part of their prepaids.  So if you just do security deposit and first month's rent up front, you tell them, "due to not meeting the income requirement we would require last month's rent as well... whatever phrases right for the situation. If you already do first and last month's rent, you just say "an additional month's rent".   I learned this technique from a landlord who actually charged 3 month's advance rent to his tenant because the guy couldn't verify his income etc.   It's all about mitigating the risk.  Look at the tenant, ask yourself what you are concerned about, then ask yourself, "What would I need to rent to this person?"  Cosigner works as well, but extra rent in the bank feels better to me.  If they get to 30 days late, you start the eviction process and still have the extra month's rent to compensate you for the month it will take to get them out of the unit.

Mark H. · Answer

What about taking total annual income and dividing by 12?

Dennis M. · Answer

In some areas 2.5X can work for income also keep in mind the holding costs winter brings with it that can really add up

Nathan Gesner · Answer

If they make great money in the summer and have strong savings, require them to pay in advance.

I have a lot of tenants that work in the service industry. They make great money in the summer and barely squeek by in the winter. I make them pay extra when the money is flowing, which works well.

Ryan Deasy · Answer

@Benjamin Knisely i have a college rental and run into this all the time. someone has to cosign. that is all there is to it. i never have a problem getting a parent to cosign if i need it. i have rented based on savings but it is rare and it needs to be a significant amount. let me know if i can help.

Monthly Income Minimum?

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