A common problem that renters face when looking for an apartment is meeting the income requirement. Most of the time, in cities with high cost of living such as Los Angeles, New York and Chicago, there is a “3 times the rent rule” that requires renters to earn at least 3 times of what the apartment cost per month, no wonder why a common question among renters is what if I don’t make 3 times the rent?
While this requirement seems exaggerated, on the landlord side there is a logical reason to ask for this, such as making sure that the tenant can afford the place and avoid a future eviction. However, it is true that a frugal lifestyle can lower your expenses enough to be able to pay a bigger rent without earning a fortune.
If you are trying to understand the logic behind the 3 times the rent rule and how to get a rental without meeting the income requirement, we have put together this article that explains everything about it and how you can overcome this obstacle in order to find your next great apartment and start furnishing it right away.
The “3 times the rent rule” or income requirement explained
Why do apartments ask for 3 times the rent?
While there is not a law that states that renters should make at least 3 times the price of its rent, this requirement is a common practice among America, especially in cities with high living standards such as New York, Chicago, Los Angeles, Boston, to name a few.
The reason behind the 3 times the rent rule expects renters to earn at least three times the cost of the apartment that they are trying to rent, and not 2, 4 or 6, is based on section 8 of the Housing Act of 1937 (often referred to as Section 8), a government-subsidized housing program that provides assistance to families with low or moderate incomes to rent housing in the private market.
According to the Section 8 program, the tenants must pay at least 30% of their monthly income towards housing, which implies that those tenants should at least earn three times the rent of the apartment that they are trying to rent. Landlords usually take this number and ask renters proof of income for 3 times the rent because they need to have proof that the renter can afford the place and won’t stop paying for the rent, which could lead into an eviction.
If you are trying to move to an apartment with a roommate you will notice that even when you make three times your share of the rent, the landlord often expects both of you to make three times the total cost of the rent. This happens because the landlord wants to make sure that if things go wrong and one of you moves out the other one can still afford the place.
How to Get a Rental Without Meeting the Income Requirement
If you are just out of college or are living with a low income, this income requirement can be a hefty sum for you. However, there are other ways to show your landlord that you can afford the apartment and that is what we are going to cover next.
It is important to mention that this rule exists for a reason, and most of the time if you can’t meet the 3 times the rent rule is because you really won’t be able to afford the apartment in the long term. So before reading any of this advice sit down for a minute, organize your budget and your expenses, and ask yourself if looking for something smaller or in a cheaper area could be a better idea.
If you worked your budget and consider that you are able to afford the apartment, here are some things that you could do to show your landlord that you have the ability to pay for it on the term
Tips for getting a rental without meeting the income requirement:
- Check for apartments that include utilities: if you don’t make 3 times the rent of an apartment but it comes with utilities paid by your landlord, you can talk with him and show him how not paying for these bills means that you need less income to get by.
- Show your landlord your current apartment contract: if you are already renting a place that cost the same that the home you are trying to rent, this can be a proof that you are capable of paying this amount in time. Besides, providing the documents that showcase this, put your new landlord in contact with the new one so he can evacuate his doubts about you.
- Look for a room in an already occupied apartment: if the lease for an apartment is already signed that means that the roommates that are living there have already proved to be earning 3 times the rent. Most of the time this rule is required to the primary leaseholder, which means that you only have to show proof of income for your share of the rent and no the total.
- Show your bank statement: a large sum of savings in your bank account will show that you have a backup plan in case things go wrong and you are not able to pay your rent in time. Simply get a statement from your bank and add it to your rental application. If you have any concerns about showing your bank statements to your landlord we have made a guide that you might want to check out.
- Offer a higher secure deposit: similar to showing your bank statement, having savings can easily earn you the apartment that you want. Simply offer the landlord to pay a deposit that is above what he is asking for to make your application more attractive and show that you are committed to the rental.
- If you are debt-free take advantage of it: if you don’t earn three times the rent but you are debt-free you can talk your landlord into taking in consideration that you don’t have any debt bills to pay, which means that you have to use less money of your income to get by.
- Look for smaller landlords: an individual renting their one and only property or a management company can often be more flexible than large companies, consider looking for properties with this kind of management and talk to them about your situation.
- Get a guarantor: a lease guarantor or co-signer -often your parents when you are just out of college- serve as a proof that you have someone who will be your backup if something goes wrong. This is the most common way to rent an apartment without meeting the income requirement, however, we recommend you to try first all the tips above because your guarantor will be responsible for you if you can’t pay your rent, and we know that is a lot to ask.
Hunting for an apartment is not easy and we know it but if you make sure you have a good credit score and try your best to impress your landlord you will find out that overcoming the three times the rent rule can be easier than you thought.