Why do apartment landlords want your gross income ?
Why do apartment landlords want your gross income to be 3x the monthly rent if your net income is what you actually have to pay rent with?
- 2 months ago
I have no idea
- DKGLv 62 months ago
I don't know. Gross income is the meaningful one, but the 3x rent is IMO excessive as a hard floor.
For decades I have saved money every month, though my gross income is only a little above 2x rent. (Specifically 2.12x)
It might have caused problems when applying to rent originally (because the formula is used to 'guess' whether the rent should be affordable), so I opted to offer a 6 months rent in advance in lieu of income and credit checks.
- StephenWeinsteinLv 72 months ago
Because it's harder for you to fake. You can easily make your net income look like it is more or less by changing your tax withholdings.
- zipperLv 62 months ago
They want to know that you can afford the rent or not. They do not want to rent then fine out you can not pay the rent; that is a major issue!
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- nanuLv 62 months ago
To see if you can pay your rent.
- curtisports2Lv 72 months ago
Because that is the standard formula used. Everybody's net pay after taxes and other deductions will vary, so gross income is the most accurate figure to work with.
- Elaine MLv 72 months ago
Because you'll get a refund on your taxes from it.
- SlumlordLv 72 months ago
A lot of people have trouble proving net income and an easier time manipulating that number (like if you are self employed). Also, whichever you use, gross or net, a landlord knows that a responsible person can probably pay the rent if the formula is ok. Likewise an irresponsible person (or sometimes one with just bad luck) won't pay or be able to pay the rent. Thus it doesn't make so much difference which you use and gross is easier to find, so using that is easy.
- Coffee DrinkerLv 72 months ago
Because net income is subjective.
My net income is what I take home AFTER numerous deductions, but some of those are optional which I could stop if I had to. For example I could cut my contributions to my 401k and Health Savings Account. I also have the choice of whether or not to pay for optional extra insurance plans such as supplemental life insurance.
Taxes also depend on each person's circumstances and what they claim on their W4 forms, which might result in tax withholding rates far higher than actual tax rates.
So basing it on net income would be too subjective. People could temporarily stop optional contributions and change their tax withholding so they'd have a few paystubs with higher net pay, then change back after they sign the lease. Gross income is much harder to manipulate.
- kelvinLv 72 months ago
so they know your able too afford the place