Are All of the Roommates’ Income Combined When Considering Income Qualifications for Apartments?
Having a roommate doesn’t just make it cheaper to pay the rent; it can also simplify the process of qualifying for an apartment. Landlords can usually combine every applicant’s income into one total number and use that sum to determine if there’s enough money coming in to pay the rent.
Calculating Rental Income
Two important factors are considered when reviewing a potential renter’s applications — the likeliness you will pay your rent and keep the unit in good shape. To ensure that tenants can afford rent, most landlords establish an income standard. For instance, a landlord may want to see that the occupants of an apartment have a monthly gross income that is three times the monthly rent. For a $1,000-per-month apartment, you’d need at least $3,000 in income. If you only make $2,000, but can find a roommate who makes the same, your combined income of $4,000 per month should be more than enough to qualify to pay the rent.
Other Roommate Considerations
When landlords look at roommates, they don’t only consider their incomes. Some landlords also look at employment verification, rental history, criminal records and credit reports. If your background is stellar, but your roommate’s isn’t, he or she could hinder your chance at getting a rental. Before submitting your application, consider reviewing your credit report to see if there are any issues that could harm your ability to rent a unit.
Solving Income Issues
While roommates are one way to solve an issue with your income, they aren’t the only way. If you have significant savings, share the account statements with your landlord. Being able to show that you have other ways of making your rent payment may get you approved. Walking the landlord through your tax return may also be helpful if you’re self-employed. Finally, you can offer to pay a larger security deposit which might be enough to get the landlord to work with a lower income.
Guarantors and Co-Signers
You can also get the benefit of a roommate without having to live with anyone if you can find a guarantor or co-signer on your lease. These are people who don’t live with you, but who agree to step in and pay your rent if you don’t. Their incomes get added to yours, and their credit history can help defray any issues you may have in terms of qualifying. Frequently, parents or other relatives serve as guarantors or co-signers.
The role your credit plays when you move isn’t done when you sign the lease. Don’t let your credit go packing by setting a budget for your new pad and taking steps to protect your identity.
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About the Author
Solomon Poretsky has been a writer since 1996, with experience in the fields of financial services, real estate and technology. Poretsky holds a Bachelor of Arts in political science from Columbia University.
This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.
Published by permission from ConsumerInfo.com, Inc. © 2014 ConsumerInfo.com, Inc. All rights reserved.