At the top of most Landlord's applicant criteria is determining what amount of monthly income is sufficient to support the monthly rent. Each landlord is different and varies, but a general rule of thumb is that your rental income must be 3x the rent to qualify. However, depending on the applicant’s circumstances, Landlord's may bend the rules a little, but not by much.
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The reason for this strict income requirement is that Landlord's want to be paid their monthly rent. Contrary to popular belief, Landlord's put up a significant amount of money, at least 20%, to acquire a rental property. Accordingly, Landlords are seeking opportunities to protect themselves from sudden unexpected events that may affect the tenant, such as loss of a job, someone getting sick, disability or even death. In other words, all Landlords are trying to do is mitigate their risk that a tenant won't be able to pay their rent.
For student housing, it’s really a different ball game. In this case, Landlord's generally understand that students don't have a full-time income. Therefore, student housing Landlords, like us, Lehigh Student Housing Rentals, Inc. (“LSHR”), may require other forms of "income," such as student loans, scholarships and financial aid packages to satisfy this requirement. Colleges and universities can provide a confirmation letter to this extent, which Landlord can then verify. Another requirement might be a guarantor, to guarantee that the tenant's rent will get paid, usually a parent or grandparent. If relying on a guarantor, most Landlord's will require a completely separate application to determine the credit and income of the guarantor.
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Finally, Landlords may require additional security or an extra month’s rent if there is no guarantor, or other circumstances that require it, such as low credit, no income, or a bankruptcy. However, every student's application is different and there are always rare exceptions to the general rules.
Nonetheless, it is important to be candid with the property management company and explain to them your financial condition so you’re not in a home you can't afford. The last thing Landlords want are to put tenants in a difficult financial position. So next time you're looking for a place to live, ask yourself if your income is 3x the monthly rent. If not, consider looking at other houses more in your price range. If you do meet the 3x monthly income requirement, apply right away.
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Plastiq charges 2.5% to charge your credit card for bills that require you paying your bill on time, and sometimes runs promotion offering a reduced interest rate. Specifically, Plastiq was offering only 1.75% to pay your rent with a MasterCard. All you have to do it sign up, enter the service providers mailing address and viola, your bill is paid! Plastiq accepts all major credit cards, including Visa, Mastercard, American Express, and now Discover cards. Plastiq also allows you to set repeat payments for recurring bills, which is a huge time saver and avoids late charges.
Currently, Plastiq has a special offer for Lehigh Student Housing Rentals web visitors!
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For students who may have signed up for a new credit card, after reading our last two blog post, Credit score education 101 and What's your credit score?, were approved, and as a result, are trying to meet the minimum spending requirement - usually around $3,000 - $5,000 on a new account, paying your bills with Plastiq is generally a no-brainer. The reason is because a bonus of 50,000 - 100,000 miles could be worth more than $1,000, whereas the Plastiq service fees are relatively small (only 2.5% of your bill).
For example, if you have to spend $5,000 on your new Chase Reserve Card or Chase Marriott Rewards credit card, which is currently offering a 100,000 and 80,000 point bonus, respectively, in order to satisfy the minimum spending threshold, the service fee on paying $5,000 worth of bills, such as your college tuition or your rent, is only $137.50. Numerous web sites, like The Points Guy, value the perks of the Chase Reserve credit card and the bonus points to be well over $1,700, which includes the 100,000 points, $300 travel statement credit, Priority Pass and more! The Chase Marriott Rewards card could easily be worth $1,000, including Silver Elite status, 2 free nights at a Category 8 property, and a free anniversary night at a Category 1-5 property. Therefore, paying the $137.50 is well worth both of these Chase credit cards.
So, what are you waiting for? Sign up for Plastiq today! Pay your bills without the hassle, pay on time, and earn major credit cards on all your purchases!
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#LSHR is a blog about off-campus student housing, financial education, networking, travel and helping you build your career.