Tip #55: Run the Numbers
When screening your tenants, along with a credit history, be sure to verify your applicant’s current income and consider their overall budget in light of their new rent payment.
The basic rule of thumb is that rent should take up about 35% of a tenant’s take-home pay.
However, that ratio will be higher for low-income earners who often can’t find housing for 35% of income. A tenant can pay more if you offer amenities like easy bus or train access, free parking or a fitness room. Another reason to go higher: you offer energy-efficient upgrades. With the money a tenant saves on utilities, they can afford a higher rent payment.
See last week’s Landlord Quick Tip.
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