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Talk » Rentals » Discussing '40x income rule for rentals - renewals'

40x income rule for rentals - renewals

56 comments

My husband and I originally rented our place 4 years ago when rents were a lot cheaper. We only provided our collective salaries not our bonuses because it wasn't necessary to be qualified and it was kind of none of their business. Now our overall income had increased since then but salaries remain steady which is consistent with the industries we are in. On renewal we've never been asked to requalify but I wonder other people's experiences.
If renewal brings you over 40 or 45 and you want to move and the market has moved similarly, do you have to downsize or can you show that you handled a higher rent elsewhere and had good payment and otherwise have a good credit score without having to reveal bonuses and the like if that applies to you.

"Now our overall income had increased since then but salaries remain steady which is consistent with the industries we are in."

Now there's an example with the problem in today's economy. Base salaries in most industries have not increased during the past 7 years. I get a kick out of some of these companies complaining they can't find skilled workers.
The reason they can't find skilled workers is that they to too cheap to raise salaries to a competitive level. Pay more money and you won't have trouble finding these so called skilled workers.

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"cant find skilled woekers" reinforces the H1B visa program, which companies enjoy, as they can/do treat/pay H1B employees like slaves.

Such a load of shlt.

"without having to reveal bonuses and the like if that applies to you".
Who gives a rat's ass? You're comfortable revealing you have a base of, say, $200k, but not comfortable saying you have an income of $300k including bonus? I don't get it.

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hoodia won the NYC HPD luxury condo lottery?

i know a person who won the same thing, got a high-end 2bdrm unit on 42 street, paying just $300/month

hiding your bonus is illegal though

If you have to apply for a new apartment you may have to show tax returns anyway which would show your bonus. And besides, why would you withhold your bonus income, who cares?

What selyanow said. I've worked at various Wall Street type positions over the years where bonus was as much as half of my total comp, so I definitely had to show official documents demonstrating my pay, often going back a ways.

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The bonuses are in aggregate between the two of us greater than the aggregate of our base salaries. And the level of income is something between us and our employers and accountants and the IRS . Since we didn't need it to qualify it doesn't need to be the business of our landlord or rental agents or building staff and sitting in some file cabinet of the landlord. This is all a private building nothing to do with government in any way.
Sealynow we have not been asked to provide tax returns and would reject that anyway. These are rentals I'm talking about, not a coop or the bank for a mortgage loan.

I don't understand then. Are you moving? If not you have wasted all of our times. if you are you will need to show proof of your income. End of story.

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how many times have you said jason the retard?

50?

100?

500?

why?

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it should be self evident.

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i have no point of view on jason.

we were discussing the fact that you are excited about posting 500 times that he is a retard.

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but why do you get so excited about this?

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non responsive.

as usual.

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wow.

you really are excited.

take it easy.

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you are gross.

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super man.

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why did you post as greensdale and then stop?

By the way I can't imagine our approach to limited disclosure is unique. I know others who feel similarly to us especially if you've really thought about the people who can have access to your information through the rental process and the lack of legal standards for privacy on the industry.

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We have a similar view on life and would prefer to disclose as little as possible to people who have no business knowing our income.
We also had the same issues where income gets larger but base doesn't really.
We got away once by adding base investment income.
When that wasn't enough, we just showed one of the bonuses.
Essentially, since you really need to live somewhere, you have to reveal some information. Try to increase the entropy as much as possible by revealing the minimal number of sources of income to show that you qualify.

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As a small landlord, I ask potential tenants for their tax returns. My feeling is that I'm risking a lot more (allowing them access to a substantial asset of mine) than they are (risking a potentially bad fit of a housing experience for a year).

It sounds odd to me that you would feel this strongly about privacy if you're not a boldfaced name (my Hollywood clients want to protect their tax returns, but that's because a lot of gawkers would like to see them). If you are, though, you might want to stick with larger landlords.

Curious to hear from other LLs what their reactions are.

ali r.
DG Neary Realty

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I don't understand the point of her original post. If she is NOT moving, no landlord will ask for her financials, end of story. If she IS moving, they will, unless she is willing to a much larger deposit.

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Wow. So the fine line you're walking between maintaining privacy from people who already have your SS#, age, address, bank statements, place and name of employment, children's names and ages IS A FUCKING BONUS NUMBER? That's what puts it over the edge? Truly amazing!

Hoodia, Just enjoy being newly married. With two incomes, you will be just fine even if you want to upgrade to 2 bed room. Assume your joint base is over 300k.

Just propose holding your lease monies in escrow for them to draw on during the year (effectively prepaying your rent).

Having means to retrieve information and having information available is different. The scope of tax returns is likely to be larger than the information provided otherwise. Hoodia is doing a prudent thing - the less information you volunteer the better chance someone will NOT misuse it.

Ali, you do it for any tenant or for the one who states that he is self-employed? If former - that's an invasive practice. Do you ask for it before the applicant qualifies otherwise? Because it's not a prevailing practice ( even in NY ), I wonder if you expose yourself to liability issues. Do you have secure-data procedures in place? Are you going to notify me when you lose your phone with my unencrypted tax returns on it?

Ali, you state, "My feeling is that I'm risking a lot more (allowing them access to a substantial asset of mine) than they are (risking a potentially bad fit of a housing experience for a year)."

OK, but once you get my tax returns and other information, my risk is no longer limited to a bad fit. Risk to my credit ( which is the most powerful financial tool at my disposal ) is no longer limited at all. Who is to guarantee that at ANY point after I move out ( or before ), some assistant of yours will not go rogue?

The invasiveness of landlords (and coops) in the city makes a decision to buy a condo an easy one.

Hoodia, in most of the cases, you will be fine just by reasonably increasing security deposit ( as others suggest ) if needed. If the landlord insists on taxes and such and does not accept your privacy concerns/security deposit tradeoff - walk away. The landlord is just as interested in a good tenant as you are in the apartment. If they misplace their focus and are not willing to listen to your concerns - not worth it.

Speaking generically, there are industries in NY where you can have a $200K base and total compensation a multiple of that equaling up to a million or more into the millions. If you can qualify for a place for $5000 per month based on a base salary, why would you want more people than necessary to know your full income and financial picture. 300_Mercer gets it.
Also the idea of sharing tax returns for a rental is excessive of you have a good credit score, verified job and income and a good and verified prior residential history. This is a rental not ownership. When we buy we'll upgrade and expect more scrutiny but also be dealing with a higher level of professionalism and expectations.

"Just propose holding your lease monies in escrow for them to draw on during the year (effectively prepaying your rent)."

In other words what I said - give them a bigger deposit. But in today's markets most landlords, even in big buildings, won't put up with this sort of thing.

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"Speaking generically, there are industries in NY where you can have a $200K base and total compensation a multiple of that equaling up to a million or more into the millions."

Which industries would those be other than finance?

hoodia, contrary to your hopes, no one cares what you make, not even the landlord who will throw your paperwork into the filing cabinet.

Sorry. I am a little confused. So you are NOT moving, but your landlord is requesting you to show your updated income just to qualify for a renewal?? I've never been ask to re-qualify for a renewal before. As long as your payment history is on time, I don't see how any landlord would request to see that. Is it even legal to ask to see updated income?

this is a really weird question. if ur bonus is large enough, just pay annual rent in one lump sum and don't tell them anything about your extra income...quite honestly no one in manhattan as a landlord is going to care much if u show more income. so what if u make $4m annually per yr as a couple, u r still middle class, right?

leecube - her current landlord is not asking for the updated income. She's asking what happens if she moved and wh didn't want to show the new landlord her bonus but just salary and is over the 40x amount. She's asking if the new landlord will be ok with it if she shows that she's been able to handle the higher payments in the building she's currently in.

With a lot of editorializing.

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""Speaking generically, there are industries in NY where you can have a $200K base and total compensation a multiple of that equaling up to a million or more into the millions."

Which industries would those be other than finance?"

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Media.

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