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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