When the overall economy experiences volatile times, the rental market follows the same patterns. The prices for rental apartments have been skyrocketing nationwide in recent months, and salaries cannot keep up with rising costs of living.
So, many people right now find themselves in a situation where they have to move to a new place but aren’t able to meet the standard 40x rent requirement. This unwritten rule has been around for some time and is most popular in larger cities, such as NYC or Los Angeles. Landlords prefer to use it to weed out potential renters who cannot afford the apartment and might have problems making their payments down the road.
However, this standard poses a difficulty for many average tenants. Just imagine, to be able to rent an apartment for $2,500 per month, you have to make at least $100,000! Here, we will give you a few practical tips on how to rent an apartment without having an annual income of 40x rent.
How to Get an Apartment Without 40x Rent?
Offer a Larger Security Deposit
Let’s start with a scenario where you feel pretty comfortable financially and even have some savings but do not make the required amount. If that’s the case, one of the best solutions would be to offer a higher security deposit. Say, two months’ rent instead of the one the landlord or the property management company requires.
As we mentioned before, one of the main reasons landlords want to see a significant income is to protect themselves against insolvent tenants. With a higher security deposit, you address this concern and minimize the chances they will incur losses if you fail to pay rent. It’s peace of mind for them. On certain platforms, such as Rentberry, you can customize your rental application and offer a higher security deposit if you have pets or slightly lower rent if you have a perfect credit score.
Put Emphasis on Your Credit Score
Have you been the most responsible person for the past 5 or 10 years and have the credit score to prove it? Use it to your advantage as well! Making a lot of money does not necessarily mean you’re financially healthy; instead, it’s important how you manage your income. Sometimes, your credit score can reflect the actual state of your finances much better than your monthly paycheck.
Of course, to be able to counterweight your low income with the credit score, it truly has to be excellent: aim for at least 740. Also, we recommend you prepare to look for an apartment in advance and try your best to boost your credit score even more. Sometimes, easy fixes, such as checking for errors in your credit reports or paying off an insignificant amount on one of your credit cards, can make a world of difference.
Find a Guarantor
Can you boast neither an excellent credit score nor a large pile of money in savings? There are still solid options for scoring your desired apartment without sufficient income. One of the most common alternatives is to seek the help of a guarantor.
In a nutshell, a guarantor is a person who is responsible for covering any debt if the tenant fails to pay rent but who does not live in the rental property themselves. You can ask your family member or a friend to be a guarantor: your relations are not usually important as long as this person is ready to vouch for you. Usually, a landlord would have certain requirements for a guarantor as well.
For example, they might ask for a credit score higher than 700 and have at least 80x rent in annual income, so it might be best to consult a well-off older aunt, for example.
Search for a Rental With a Roommate
One of the best things about having a partner is the ability to split all the expenses in two. For example, if you rent an apartment, it is much easier to achieve the threshold of having 40x rent by combining two incomes. So, if you don’t have a significant other to rent an apartment with, try to get a roommate, and the cost of renting will become more bearable.
Luckily, in our times, it is fairly easy to find roommates. First, try to see if someone from your closer circle, such as friends or coworkers, is looking for an apartment now or in the near future. It can be helpful to write a post on social media, and maybe, you’ll discover that a friend of a friend is in need of a roommate as well. And, of course, there are plenty of apps and websites that let you connect with people who might be renting out a room.
Just remember to do some due diligence: after all, you will be sharing your home with this person, so make sure you have similar views on cleanliness and noise levels.
Conclusion
To sum up, having a low income does not necessarily mean you cannot afford the rental property of your dreams. Approach the situation from various angles, and try to find your strengths that can compensate for the lack of 40x rent income.
Also, remember that it pays off to make an effort. Spend some time writing a compelling rental application, collecting references from your past landlords, and explaining to your potential landlord why you would make an excellent tenant, despite having a not-so-perfect annual income. Good luck in your search for a new rental!
Author Bio: Mariia Kislitsyna serves as editor-in-chief and writer for the Rentberry and Landlord Tips blogs. She covers topics such as landlord-tenant laws, tips and advice for renters, investment opportunities in various cities, and more. She holds a master’s degree in strategic management, and you can find her articles in such publications as Yahoo! Finance, Forbes, Benzinga, and RealEstateAgent.
