%of income for rent? - Posted by Todd

Posted by Bert G on May 21, 2000 at 17:12:29:

Used to be the reccomendation was no more than 25% of gross income for housing expence. Nowadays its more like 30% and some go as high as 50% in lower income housing. For screening my tenants I figure the gross income should be 3 times the rent, plus the average utility cost.
{ (3XR)+U=I } So if the rent is $300, and average tenant-paid utilities are $100, the applicant needs at least $1000/mo gross. (If they get HUD assistance, “R” is the tenant’s share)

%of income for rent? - Posted by Todd

Posted by Todd on May 21, 2000 at 16:52:40:

what is the formula for figuring out the maximum that someone should be able to afford for rent?

Re: %of income for rent? - Posted by Mark (SDCA)

Posted by Mark (SDCA) on May 22, 2000 at 13:50:46:

Gross?? Why gross?? Gross doesn’t come home!! I work off net… I want 2.5-3x times the rent in TAKE HOME pay. This works out to one paycheck for the rent, one for other stuff (food, utilities etc) and an extra paycheck for more stuff/emergencies… It works for me.


Re: %of income for rent? - Posted by Rob FL

Posted by Rob FL on May 22, 2000 at 08:59:58:

I think Bert’s figures are a little conservative. For owners, FHA allows up to 29% of gross income to be the PITI payment and 41% for total debt payments. They don’t care about utilities and other reoccurring bills at all. And most of your renters would not qualify for an FHA loan.

I generally use the figure 50% of their total “net” income. Now if we figure that 20% of their gross income gets eaten up by tax and other deductions, then my figure would equate to 40% of gross. I like using a net figure because nobody ever really sees any of the money that gets deducted anyway.

a great site mrlandlord.com (nt) - Posted by d.henderson

Posted by d.henderson on May 21, 2000 at 19:20:49: