Ability to pay Rent??

[Explorer 1]

What would you do in this scenario:

Potential tenant wants to rent one of my flats, good employer references, newly promoted to job in another city, sold her flat to re-locate, hence wanting to rent. however rent of flat is equal to net salary. insist that ability to pay rent is not an issue, as has equity from flat sale. Everything else seems fine aside from this.

What do you think, and how would you play the tenancy?

[Melboy]

2 years ago I was faced with exactly the same problem as you have.

The Tenant offered to pay 6 Months up front which I accepted and 2 years on he is still there.

I guess you have to go with your gut feeling on this one and you have obviously done your homework regarding Tenant references and a face to face meeting (?) etc.

I think I would go for it..........................There will always be an element of risk when taking on any new Tenant imo.

Mel.

[GPEL]

General rule of thumb for affordability is permanent annual income of 2 and a 1/2 times the annual rent. Cash in the bank one day could be spent the next so wouldn't place great store on that. If income criteria not met, either ask for a guarantor with income of 3 times annual rent or rent in advance for fixed period, repeated 6 months later if circumstances don't change. This usually tests commitment and willingness to pay.

[Simon Dewsberry]

Completely agree with Melboy and GPEL

6/12 months upfront and review in 6 months -repeat if no change in circumstances or guarantor on basis GPEL has outlined !

Had girl in exactly same position after divorce just signed her up for 3rd 12 mth ast !

although she now pays monthly as she has proved to be an excellent tenant

Simon