View Full Version : Assessing prospective tenant's ability to afford rent?
15-11-2005, 13:15 PM
I've just shown a prospective tenant round a property, and she's keen; from my point of view she seems a good bet except that I'm wondering whether she will be able to afford the rent bearing in mind she has what I know must be a fairly low-paid job.
I need to get back to her in the next couple of days; obviously if I invite her to apply for the tenancy I'll get full details of her income. But I just wondered whether other LLs work using an income threshold (eg income multiples, like the mortgage companies?) below which they won't consider a potential tenant?
Obviously income isn't the only financial yardstick - eg a high-earning prospect may have massive outgoings which they wouldn't own up about; nevertheless it's a good starting point.
Thanks for any thoughts.
15-11-2005, 16:09 PM
Obviously income isn't the only financial yardstick - eg a high-earning prospect may have massive outgoings which they wouldn't own up about; nevertheless it's a good starting point. Equally, as has happened to me, a low earning prospect turned out to have a partner in the wings who paid the full rent direct from his account.
15-11-2005, 18:57 PM
Tell her you're not sure, but could be swayed if she provides a guarantor.
15-11-2005, 22:30 PM
If you want it in terms of cold hard cash, I would say it would be difficult to sustain a tenancy off your own back if you earn below around £13000 gross. Of course, this entirely depends what your rent is! I'm kind of loosly(sic) basing it on £550-600 pcm. For every £1000 debt they are in, I would increase this by around £250 - but again this depends upon the type of debt.
This is PURELY my opinion, and based upon not living totally on the breadline....kind of figures I've been working with when considering whether I can rent again :p
16-11-2005, 08:06 AM
Thanks for the above replies.
In fact I've just spent some time googling, and come up with the following link which contains some useful stuff - it's actually a letting agent's FAQ - which might be useful for others who are in this situation:
According to their criteria, a tenant needs to be earning 1.5x the annual rent to be considered at all; 2.5x the annual rent to be considered without a guarantor; and any guarantor should be earning 3x the rent.
The 2.5x is not far off MrShed's criteria, as it happens.
(The PS is that I contacted this prospect 6 hours after viewing to offer her the property, during which time she's signed up for somewhere else and I've missed the deadline for re-advertising in this week's local rag... :mad: )
16-11-2005, 15:55 PM
Just to follow on from bayoo's point....while I agree it is important to look at these things, do not let them be the be all and end all, ask the reasons. In particular look to see if they are going further into the red each month, or staying about the same. I personally am constantly in the red at the moment, due to not long being out of university, however I always pay my bills in full each month, and my red amount is decreasing slowly but surely. This is just one example of where a circumstance can cause a permanant negative bank balance.
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