Well maybe.....if they are not chasing the latest and greatest tech, cell phone plan and flashy car. But without knowing what that ratio is, it is tough saying. A retiree knows how to stretch money easier than a door dash munching younger person. If that ratio was less than 2.5, I probably wouldn't. If it is 2.9, I would consider them. There isn't a magic switch that flips from 2.9 to 3.

The 3x rent rule is just a rule of thumb, not to be taken as the rock solid golden standard in every scenario.

Example 1: In Springfield- MO, my town.

Rent = $800

Minimum income = $2400

This leaves the renter with $1600 for utilities, food, clothing, transportation, medical, etc. VERY tight, but possible. Below that amount ... nope. Disaster waiting to happen.

Example 2: In Los Angeles - CA.

Rent = $3000

Minimum income = $9000

This leaves the renter with $6000 for utilities, food, clothing, transportation, medical, etc. There is room there. Even if their income is only $8000 or $7000...there's still $4000 - $5000 per month left. Perfectly doable.

Sometimes it's not enough just to know "the rule". Gotta know WHY the rule exists, what purpose it serves and when it can be broken, or when you just need a totally different rule.

The 3x rent for me exists as the BARE MINIMUM standard below which I won't go for any reason whatsoever. Not even a co-signer or double deposit makes up for the fact that once life happens, someone making less than 3x is going to struggle severely and probably end up breaking the lease. So it's a quick DQ tool for me, but I still have to do the work to assess the income situation overall.

Example:

Rent - $800

Income - $3200 (4 x the income.... wow!)

Then I seen the credit report with 5 high balance credit cards and a total of $1000 in minimum monthly payments on various other loans and accounts. All of a sudden, "wow" became "Nope".

Sounds like you got a keeper.

We screen for stability. If they're stable in the rest of their life, then they'll be less likely to be unstable in their dealings with us.

That said, a key element would be whether their previous place charged more, less, or the same as what I charge for rent. If someone is used to paying $x/month and I'm 2x/month, then it's not a good predictor. But if I'm in the same general ballpark, or less, then I would expect their stability to continue. That's also with the presumption that relocating isn't giving them a new set of disrupting variables, like significantly increasing their commute timing so that their two jobs are no longer feasible, or that their travel expenses increase significantly. And it's also presuming there isn't another disruptor to their balance, whose timing overlaps with their building's sale, like child support, or needing to be a caregiver to a parent, or, or, or...

Me, (actually YOU!)

Depends.

We do bend the rule for singles as much as 50%.

How much rent were they paying? Never raised from 1999 rents?

Did they actually pay?

or any chance they were family, paying $0 or $100?

or a LL who never evicted?

There is more to the story.

BRAD