Income to rental amount ratio

Hey PMs

When selecting a tenant do you follow a specific ratio when deciding if tenant can afford to rent the house?

Like if their income is $1000 pw they can rent a house for $300 per week etc

 

About a third is good in theory.

Depends on the asking rent, overall strength of application, whether they have kids / pets, whether both partners are working and a little discretion as well.

I have a tenant in one of my own personal properties that is closer to half ratio and has never dipped below 14 days in advance once. She just manages her money well, whereas that'd ruin another person. Have to read deeper into applications and actually talk to people at home opens to understand them.

 

As DT said it will depend on many factors. But generally the rent should not be more than 50% of income and 25-30% being a good amount.

 

I've actually considered getting a full fact find and running them through some of my serviceability calculators to ensure they can afford the ongoing commitment. If I had my way we'd do credit and employment checks as well. Do a full financial work up.

Fortuantely for our tenants the property managers do a great job, they tend to follow the 30% rule. It's been rare that we've had a problem with any of our tenants.

 

As a landlord how much do you review a tennant?
From memory I recieve an email with the family composition. Income, employer and that's about it from the agent. With their recommendation.

I know I don't recieve the application.
Mostly it is up the the agent to run the checks.
Admittedly I have only 'higher' socio economic IPs.

Blacky