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| Financial
Requirements |
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Landlords of rental buildings require that a tenant's annual
income meet certain minimums. This minimum is often 40 to
50 times the monthly rent. For example, a landlord may require
a prospective tenant to have an annual income of $80,000 to
$100,000 if the renter is seeking to rent an apartment with
a monthly rent of $2,000. Annual income, as defined by a landlord,
may exclude bonuses that are not guaranteed. In addition,
landlords may require a credit history showing no delinquencies,
defaults, judgments, or bankruptcies. Finally, rental condos
and co-ops may have stricter financial requirements for prospective
tenants. |
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| Typical
Security and Initial Rent Payment |
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Assuming the tenant meets the landlord's minimum financial
requirements and credit check, many landlords will require
the payment of security equal to 1 month's rent, plus the
first month's rent. Landlords may require that both payments
be in the form of certified checks, cashiers checks, or money
orders, and that they be delivered at the execution of the
lease. |
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| Guarantor
or Co-Signer |
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In the event that the applicant does not meet the financial
requirements or credit test, a landlord may require a guarantor
or co-signer on the lease.
A landlord may require the guarantor or co-signer to reside
in the local metropolitan area, and have an annual income
of 80 to 100 times the monthly rent. For example, a landlord
may require the annual income of the guarantor/co-signer to
approximate $240,000 to $300,000, if the tenant is seeking
to rent an apartment with a monthly rent of $3,000.
In addition, the landlord may require the guarantor or co-signer
to submit extensive due-diligence documentation to the landlord,
such as 2 to 3 years of tax returns, net worth statements
from their accountants, bank and brokerage statements.
Finally, the landlord may require the guarantor/co-signer
to have a credit report showing no delinquencies, defaults,
judgments or bankruptcies. |
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| Additional
Security and/or Prepaid Rent Requested by the Landlord |
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In the event that the renter does not have a guarantor or
co-signer who can satisfy the landlord's financial requirements
for a guarantor, the landlord may require additional security
beyond the typical security deposit of 1 month's rent and/or prepaid rent. |
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| Non-U.S.
Residents |
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| Landlords
may have stricter requirements for Non-U.S. residents, who
may have no credit history and no rental history in the United
States. Landlords may require significant additional security
and/or prepayment of rent that may range from 6 to 12 months.
A landlord may require the renter's annual income to be a
minimum of 40 to 50 times the monthly rent. For example, a
landlord may require an annual income approximating $120,000
to $150,000 if the renter is seeking to rent an apartment
with a monthly rent of $3,000. |
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| Self-Employed
Renters |
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| Landlords
may have strict requirements for self-employed persons because
of the variable nature of the self-employed person's annual
income. Accordingly, landlords may require significant additional
security and/or prepayment of rent ranging from 4 to 12 months.
A landlord may require the renter's annual income to be a
minimum of 40 to 50 times the monthly rent, and for the renter's
credit report to be free of delinquencies, defaults, judgments
or bankruptcies. For example, a landlord may require an annual
income approximating $120,000 to $150,000 if the tenant is
seeking to rent an apartment with a monthly rent of $3,000. |
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| Persons No Longer in the Workforce |
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| Landlords
may have strict requirements for retired or other non-salaried
persons. Landlords may require evidence of significant liquid
assets (cash in bank accounts and marketable securities in
brokerage accounts) to offset the lack of an annual salary.
In addition, landlords may require significant additional
security and/or prepayment of rent. |
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