Wednesday, May 2, 2012

Ask Yourself: What Can I Afford?

JRealty has credit and income requirements to lease any of our properties. We require that our lessees have a minimum FICO score of 650 and that their rent to income ratio be no more than 33%. We feel that this is a good standard to weigh out applicants to minimize risk with potential tenants.

A person with a good credit score indicates that they understand the importance of paying their bills on time. When searching for a potential tenant it is important to assess 1) if they will pay their rent on time and 2) if they capable of paying rent on time. Realistically speaking, for a tenant to be able to pay rent and live a comfortable life style they should earn at least three times their monthly rent.

We frequently receive calls from potential tenants who love one of our current vacancies and would like to lease it out, but unfortunately do not meet our requirements. They sometimes earn enough income, but have poor credit or have great credit, but earn too little income. In an effort to reduce the risk of problems in the future, we would like the tenant’s rent to income ratio to be as low as possible.

If you are looking for a new place live and keep asking yourself, “What can I afford?” we recommend searching for properties that are priced for about a third of what you earn monthly. Of course there are other expenses to consider such as: insurance, utilities, debts, and other monetary obligations.

Happy searching potential tenants!

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