Alan Smithee

The latest chapter in my efforts to move to a bigger, better and cleaner living space: I've checked out a few places but my job isn't quite paying enough to rent the sort of nice house I'd been planning on. I have at least found a few duplexes and some larger apartments that are more in my price range.

However, I hit a snag yesterday when I officially applied for my first one- they REQUIRED that I make THREE TIMES the amount of their monthly rent. I've seen several other listings that state that requirement, though doing a Google search it seems at least some of them will work with you a bit on that. These people wouldn't however- telling them that I've NEVER paid my rent late in over 21 years of renting, and that I've lived in the same apartment for 14 years with a perfect payment record meant nothing to them. They would not even accept any relatives to co-sign for me, which I did for at least one of my previous apartments but don't think I had to for the one I'm in now, even though I've never earned three times the rent per month.

The place I applied for wasn't in the greatest area but looked like it would serve my needs quite well (yes, I hear you laughing!) Honestly if I made more money than I do now, I likely would have gone for something more expensive in a better area, but if everyone requires that I make three times the rent every month then that's obviously going to limit my choices. I can't imagine anyone who made that much would want to live in the place I applied for. So of the people here who rent their homes, do you make three times the monthly rent or more?

slop101

I don't rent, but I do earn more than 3x my monthly mortgage which, if I continue paying additional principal like I have been, should be done in less than 4 years.

That is, until you move in.

Sgtsnake

I rent and I make 3 times my monthly rent

Dan

Yes.

tasha99

I usually maintain two places--my home that I own, and a rental room near where I work. After taxes and withholding, I make about 4x what my mortgage + commuter rental room costs. This mostly holds true for different areas since per diem in high cost of living areas is higher (and so is my room--my home stays the same).

VHS?

If I lived anywhere else other than San Diego, yes.

Goat3001

I haven't heard three times the monthly rent. The benchmark my previous apartments have always used is that my salary be 40x the monthly rent. They're pretty strict with that stuff around here. It's annoying because I should be able to decide my budget and I've avoided trying to rent places that are more than the 40x benchmark. Alas, I fully understand why they do it.

Keep searching, you should find a place that will at least accept a guarantor. If not, settling for something that is 3x your rent.

bunkaroo

Answer to OP's question should have been obvious - we're all rich!

kenbuzz

Renting or buying, it's generally a bad idea if your housing cost is 1/3rd (or more) of your income.

Note, monthly salary > 3x monthly rent is the same as annual salary > 36x monthly rent. The 40x (annual) rule is an approximation of the 3x (monthly) rule, but at least it errs on the side of caution. Frankly, I'd be leery of any situation where my housing were more than 25-30% of my salary. And if I had debt, I'd worry if my entire debt ratio (including housing) exceeded 33%.

Josh-da-man

Isn't it a general rule that rent should account for 30% of your income?

I'm not sure how common it is for it to be mandated, though.

ETA: kenbuzz beat me to it. Wasn't sure if the 30% rule was still a thing.

Why So Blu?

Alan, you do know that you'll never move, right? Also, he who OWNS the property makes the rules. As long as they do not discriminate based on race. They can totally disqualify you if you don't make enough.

Hokeyboy

Interesting. I'm curious, 3x gross or net?

Timber

The last time I rented I got it to appear that I made 3x the rent by showing my W2's from the previous year. I wasn't making as much that current year and since part of my pay was commission it's hard to judge for future income.

That said in actuality I wasn't 3x and it does put a serious strain on your expenses.

Edit: plus keep in mind that depending on your local laws rental places can raise your rent I think it's 6% a year. Living there anymore than 2 years that starts to put a serious dent in your expenses if you're barely at or under that 3x number.

kvrdave

Net on both rentals and lending. And here is something super stupid on lending. They don't add back your depreciation. Depreciation on a rental will typically be over 27.5 years on the improvements (not the raw land), and it is on paper only for taxes. I don't actually lose that money each year, in other words, so why the fuck wouldn't a bank add it back in?

3 months is pretty standard for rentals. I don't always hold people to that, but I also take it in the shorts more than most. My advice would be to rent the smaller place that is no more than 1/3 your net, because stability is better than not being able to save for a rainy day. It's around 29-33% that is used for home lending, depending on the type. Seems like VA is the least restrictive.

Alan Smithee

There is NO place I could rent around here for 1/3 of what I make right now. Where I'm at now I pay a little under half what I make each month. That's about how I've lived since 1998, and it hasn't hurt me yet. I hope I'll get a raise eventually, but I can at least live on what I make unless everyone suddenly insists on this income requirement. If I were richer I'd probably be looking more into BUYING a house, but that's still a ways off.

BigPete

Never been more than 25%. Usually closer to 20%.

The Bus

Note the 3x "guideline" is gross rent. If you're paying close to half in rent, then that's a very large part of your overall net income.

Hokeyboy

When we were renting it was around 19% of our combined net monthly income. This was before the rental market in South Florida went all meshuggah.

Alan Smithee

Yep, just calculated that by my NET pay, which really shows lack of thinking on my part. I usually don't even look at how much is taken out for taxes as it's just too depressing. But even using my gross income, being generous I make about 2 1/2 times the rent of the place I applied for, which ought to be "good enough" considering my record. I also have a good amount of money in savings reserved for emergencies and have ZERO credit card debt right now. Found two other places that could be good, each from different owners, so I'll see how those handle me. Seems like I've been underpaid my whole life compared to others here though, and I've always thought people rented instead of buying BECAUSE they were poor!

Added- it would sure be easier if I were married and they paid half the rent, but that ain't likely to happen! Oddly enough my crazy ex-girlfriend emailed me a couple weeks ago asking if I'd consider renting a place with her platonically- I wrote back asking if she REALLY thought that would work, and didn't hear back afterwards!

Dan

Sounds like you need a roommate.

Also, I'm sure your current rent is very low compared to what new tenants are paying in the same building. Just a hunch.

Alan Smithee

I would rather become homeless than live with a roommate- I'm almost serious about that. And yes, my current apartment is FAR below what they'd charge a new tenant now, which is a big reason why I'm betting they want me out as soon as possible and why they were giving me all the crap that spawned that other thread here that you might have heard about. (There's still 2 or so people who've been there longer than I have.)

Why So Blu?

Sell some of your media crap to help pay for a better place.

Alan Smithee

If I did that, I wouldn't NEED a bigger place! I'm going to get all new shelves though instead of the ones I have bolted to the walls, so everything will be nice and pretty. Most places I've looked at also have walk-in closets. When I have time I'll post some pictures of places I've looked at on the other thread so people can have fun with them. If and when I actually DO move there'll be tons of pictures of that as well.

DVD Josh

I represent alot of multi-unit landlords. Three times rent is fairly common, even around here where that approaches $4500 to $6000. The rationalization is that in addition to rent, you have utilities, food, transportation and other costs which must be covered. The practice has never been challenged as unreasonable.

GoldenJCJ

You love all your stuff now, but I think you'll be singing a different tune about halfway through the moving process when you realize just how much crap you actual own and don't need.