Rental Basics in Miami>Question Details

Trulia Miami, Home Buyer in Miami, FL

Traditionally speaking, what % of your salary SHOULD go towards rent?

Asked by Trulia Miami, Miami, FL Tue Mar 5, 2013

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Excellent question. I look for the tenant to have have a gross salary of at least three times the monthly rent. If a property is rented for $2000 per month I expect for the Tenant to make at least $6,000 per month or $72,000 per year. However, sometimes we have to be flexible to move the inventory and I apply the 2.5 times the monthly rent. I expect for Landlords to be more flexible than lenders.
2 votes Thank Flag Link Wed Mar 6, 2013
It all depends on which side you are. If you are the one renting a property, I personally think that a 25 % limit on your gross income would be a good number. It allows you to have more money left for other projects in your life, including possibly some savings.If you are the one who own a property for rent, you will see all the brackets my colleagues described in here, from 30 to even 50 %, depending on how liberal and risk- taker the landlord is.
1 vote Thank Flag Link Wed Mar 6, 2013
In recently having spoken to two lenders, they typically expect tenants to be able to pay 30-31% of their gross income towards their rent.
1 vote Thank Flag Link Tue Mar 5, 2013
Conservatively speaking, you are advised not to exceed 33% of your income towards rent. However; statistically, most tenants in Miami exceed this rule by putting 50% of their salaries towards rent.
1 vote Thank Flag Link Tue Mar 5, 2013
Usually I look 31% from Net and 36% from the Gross and them works.
0 votes Thank Flag Link Wed Mar 6, 2013
I manage over 40 units and typically I look for the tenant to have have a gross salary of at least three times the monthly rent. However, this can be overcome with advanced rental payments held in escrow if the tenant has cash in the bank versus income. This happens often with students for example.
0 votes Thank Flag Link Tue Mar 5, 2013
No more than a third of your gross annual income should go towards housing. As for rent, you should not spent anymore than 25% of your gross income.

Housing - This expense should include mortgage, insurance, gas, electricity, maintenance, and phone. Rent or your monthly mortgage payment plus each of the above should never exceed 36%. 1/3 is generally a good rule just as with the 1st answer, but don' t forget that the number includes the other housing expenses.
0 votes Thank Flag Link Tue Mar 5, 2013
Landlords generally look for 30% to 50% of your gross income. It also depends on how much your income is. Your goal should be to still be able to save some money every month after your expenses.
0 votes Thank Flag Link Tue Mar 5, 2013
This is a great question, always wondered...fair to say I am likely way over what is "normal"...sigh.
0 votes Thank Flag Link Tue Mar 5, 2013
Traditionally not more than 35% of your salary should go towards the payment of your rent or mortgage (PITI).
0 votes Thank Flag Link Tue Mar 5, 2013
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