What if I don’t make 40 times the rent? Rent rule explained.

If you’re looking for an apartment in a big city, especially New York,  it is most likely that you’ve heard about the “40 times the rent” rule landlords use in order to find a tenant. This rule implies your annual income should be 40 times the monthly rent to be eligible. While it is true that not all landlords use it, especially now that the rent prices are particularly high, a lot of them still do. 

What does this rule work for?

The “40x the rent” rule allows landlords to make sure their tenants will be able to pay rent which can avoid unpleasant situations for both parties. 

What if I have roommates?

While some landlords request every tenant makes 40 times the rent to make sure rent will still be paid for even if one of the roommates decides to move out, this is quite uncommon meaning that all of the roommates can combine their gross annual income in order to meet this requirement. 

How can I know how much I can afford?

To know how much rent you can afford all you have to do is do a simple divison, just divide your annual income by 40. For example, if you make $50,000, you just need to divide it by 40, meaning you can afford $1250 of rent.

What if I don’t meet this requirement?

There are a few ways to still rent your dreamed apartment even if you don’t make the requested amount of money. 

  • Offer a bigger deposit. A lot of landlords are willing to take you in if you increase your deposit, even if you don’t make 40x times the rent. 
  • If you’re planning on living alone, find a roommate. This will not only make rent more affordable, it will also give you a nice company.
  • Have a good credit score. If you’re a few dollars short on the requested amount, having a good credit will make you look good in the landlord’s eyes making it most likely to be picked.
  • Hire a guarantor. While it is true that not every landlord accepts this, a lot of them do. Hiring a guarantor means you don’t have to make 40 times the rent since a lot of them require you to make around 27x the rent. We’ve put together a list of the most accepted guarantors to make apartment hunting easier for you. Each company asks for a single payment per lease. 
CompanyGuarantee feeCredit Score requiredAnnual income required
Insurent70% to 90% the monthly rent for citizens with US based credit history
98% to 110% the monthly rent for those without US based credit history
Decent to good27,5 times the rent or 50 times the rent if the assets are liquid.
The guarantors35% to 85% the monthly rent.Good27 times the rent
Leap easy55% to 95% the monthly rent.Decent to goodNot mentioned.

The property market is currently crazy with prices constantly going up, however there’s still always a way to get around that craziness and find your dream apartment. 

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