Tenant Screening- 3x gross income but no money in bank

[Jacob Haskins]

Hello BP Community!  I am looking for some insight.

We are getting ready to rent out our first unit to long term tenants! We have listed a 2/2 home for $1200, and today we set a physical appointment with some interested tenants and they filled out an application.  They seemed to be a great fit and they were very interested and want to move in next week.  Well, when I saw the application come through (we have the application set up online through Apartments.com), something stood out to me like a red flag.  For all applicants to be considered, we were up front with them about the requirements. The requirements are:  3x the monthly rent in gross income, 620+ credit score, and clean background check.  Also, to get the keys they would have to pay 1st months rent and security deposit.

So, on their application, they had great credit (near 720) and passed the background check.  However, I am a little concerned on the income.  If you add the couples income together, they barely scrape by the 3x rule.  However, they shared bank statements to prove their income and cash balance, and that is what alarms me -- the applicants have almost no available cash!  They shared screenshots of bank statements since Jan 2022 and they typically have less than $200 at the end of each statement.  The most recent statement (April) has barely enough money to cover 1 month of rent. They also do not even rent currently, they actually "split" a mortgage with a family member which is less than $300 per month for their part.

Do you all have any advice or feedback?  If I had not seen their bank statements, and only seen or been given their paystubs, then they would technically pass the "3x rule". 

[Theresa Harris]

just because they make 3x the rent, doesn't mean they are saving any of it.  I'd pass.  If they are currently paying $300 a month for 'rent', how are they going to afford $1200. Go with your gut.