Income Verificatiion and Screening

[Cesar Garcia]

I have a quick question. When screening prospective tenants we look for an income at least 3x the rent amount. So for example if we charge 4k for a house that means they have to make at least 12k to qualify. Now my question, 12k income is that gross or net income? Having a hard time calculating how much they can afford from the gross amount.

[Richard F.]

Aloha,

It should always be your muliplier (3X) times Gross income...BUT don't fall for the old "I have an internet business/I drive ride share so no paystubs". In those cases you must look at them as a business...great they have all that income, but they ALSO have a cost to produce/provide whatever they are offering. You need to estimate their business costs, as well as their "living" expenses.

Also, I have seen a lot of posters that hold each individual to the rent multiplier. That is ridiculous. Total household verifiable income (minus the business expenses noted above) is what you look at, whether family members or roommates (in addition to full credit/background on all adults in the group). Roommates would usually require their own co-signer if needed, at least in the case of full time students.