Renting after ER and Approval Process

[littleb]

We are thinking about renting a house or apartment later this year until we decide where we will land. In reviewing the rental policies at many places the requirements ask for a credit check, employment information and/or tax records for past 2 years if self employed.

How does this work if you ER and you have no job? Of course, we have plenty of money in the bank but really not crazy about showing bank balance or tax records to someone who manages a rental complex or house.

What have others done in this situation? We are thinking about getting a letter from our banker stating we have plenty of funds available and all loans were paid back promptly.

When we rented years and years ago these requirements were not necessary.

Any suggestions?

 

[MooreBonds]

How does this work if you ER and you have no job? Of course, we have plenty of money in the bank but really not crazy about showing bank balance or tax records to someone who manages a rental complex or house.

What have others done in this situation? We are thinking about getting a letter from our banker stating we have plenty of funds available and all loans were paid back promptly.

no experience with it here, but you will likely have easier times with individual land lords vs a corporate setting (i.e. large building complex). Corporate guidelines will be more rigid, compared to asking an individual what they would accept for references in your situation.

When all else fails, money talks. I'm sure if you offered to prepay 1-2 months rent when you started, and always paid on time thereafter (always having that 1-2 months prepaid balance), they'd probably be more than happy to take the chance.

When we rented years and years ago these requirements were not necessary.

And back then, you didn't have as many people taking advantage of the system, renting for 2 months then simply stop paying the rent, forcing landlords to spend months and hundreds of $ to evict them.

 

[candrew]

Are any of the rental properties you are interested in setting forth specific income requirements?

If *yes*, what you may consider doing - if you haven't already - is to set up automatic withdrawals from your investment accounts into regular bank accounts. Demonstrating a regular income stream should help satisfy any concerns. You could always modify and/or cancel the regular withdrawals after the lease is signed.

Not intending to hijack the thread here, however, if reasonable measures fail, one could always make some noise about the Fair Housing Act and and the landlord's refusing to rent to members of certain groups (age discrimination perhaps?).

 

[travelover]

I've rented at an apartment complex and from an individual. In both cases I showed them my pension income statement and my Vanguard summary. When they saw my net worth and 800+ Fico score, there was no issue.

 

[Fedup]

My sister did rent out for an unemployed person, the company that she's hired to manage said the tenant paid a whole year ahead in cash. She said that guy is still there nearly 10 years later. Cash up front is key.

 

[dunkelblau]

Even though I was working I did this at my previous apartment. It was a small family-run place so I didn't want to show them my paystub information. I had an extra checking account with a lower balance (but more than a year's rent) so I showed them two consecutive statements from that account and they were happy with it. I figured they would be seeing that account number every month anyway.

 

[calmloki]

My sister did rent out for an unemployed person, the company that she's hired to manage said the tenant paid a whole year ahead in cash. She said that guy is still there nearly 10 years later. Cash up front is key.

For me a great credit score is a big motivator. Add a healthy Vanguard statement and a clean car and I'd be jumping to rent to you. I've always found people who want to pay bunches in advance to be suspect. Suspicious nature says they can't get a place to rent from anyone else so exactly why should I take the risk?

Someone who makes specious Fair Housing claims before renting or has the faintest scent of a litigious nature? Not likely to be my future tenant.

 

[Fedup]

For me a great credit score is a big motivator. Add a healthy Vanguard statement and a clean car and I'd be jumping to rent to you. I've always found people who want to pay bunches in advance to be suspect. Suspicious nature says they can't get a place to rent from anyone else so exactly why should I take the risk?

Someone who makes specious Fair Housing claims before renting or has the faintest scent of a litigious nature? Not likely to be my future tenant.

You maybe right, but in this case he came recommended from the previous tenant. I think either my sister charges them below market price or something. She is still waiting for him to move out so she can sell the house.

 

[brett]

We rented after not having a permanent address for 10 months.

There was no issue. The owner of the condo was shrewd, sized us up, and gave us what we wanted...a six month rental on a golf course condo. No credit checks. No references required. Four years later we are still here and are preparing to move out in a few weeks. Renting was a great break from home ownership and it proved to be extremely financially advantageous for us.

When we were looking we walked out of a place that had a line up of people waiting to fill out an application/approval process. Could not be bothered with it and our second viewing, the golf course condo, was much better for the same dollar.

 

[MooreBonds]

For me a great credit score is a big motivator. Add a healthy Vanguard statement and a clean car and I'd be jumping to rent to you. I've always found people who want to pay bunches in advance to be suspect. Suspicious nature says they can't get a place to rent from anyone else so exactly why should I take the risk?

If the OP only had a (presumably) good FICO score, but no recent job history, and they didn't want to show their investment account balances, there isn't much left to prove to the landlord that they are a good risk. In fact, I suspect many small landlords wouldn't even report anything to the credit bureaus if they had a deadbeat tenant that was habitually late (Or even had to be evicted) - so as long as the applicant was paying their other bills on-time, it would appear they are a good risk by their FICO score.

If someone was offering to pay me several months rent in advance (and stay 2-3 months ahead in rent for the first year), that would definitely be enough to tell me that they likely would be a worthy risk.

 

[Dash man]

My sister did rent out for an unemployed person, the company that she's hired to manage said the tenant paid a whole year ahead in cash. She said that guy is still there nearly 10 years later. Cash up front is key.

I refused a guy once who offered a full year's rent up front, because, in part, he wrote a two page letter explaining his business startup and how great a tenant he would be. Something just didn't feel right with this guy. Too much of a hard sell. I was worried about after the first year.
Ended up renting to a widow and two of her middle aged kids. They pay early every month and this is the third year.

 

[pablo]

This issue is one of the greatest concerns that I have. From my experience it all depends where you live. Since I rent/live in NYC, I constantly worry that my lease will not be renewed. Why? Because in this city it will be virtually impossible for me to rent without showing a traditional income. Showing brokerage statements won't work. Paying months of cash up front won't work. The NYC rental market is in such demand that if a prospective tenant fills out an application without traditional income, there are simply too many other 'non-problematic' applicants to take your place.

How do I know this? I have a close friend who went through this very issue last year. No investment account statements or wads of cash to any of the many, many landlords in NYC was accepted and it didn't matter that he had an 800 credit score. What did he do? He got a co-signer. And many of the apartment building he looked at would not even accept a co-signer! A 55-year old single man with a net worth of millions needed a co-signer! The only other choice for him would have been to move to a suburb where the landlord was a homeowner and not a large management company.

I have seen articles online advising prospective tenants how to deal with this issue in NYC. From my perspective, these authors never lived here!

 

[braumeister]

This issue is a great argument for diversification.

Say you have your investments at one institution because you like them (Fidelity, Schwab, Vanguard, whatever). And your checking/savings accounts at one bank because you like them (USAA, PenFed, Chase, BOA, whatever).

You're reluctant to show those account statements to a third party, and rightly so. But the solution is simple. Take a percentage of your assets and transfer them to new accounts at another institution. Once you have a couple of months worth of statements, you can show them easily without revealing that the bulk of your assets are elsewhere.

You can even enhance that scenario by making regular transfers of a fixed amount into those smaller accounts for a couple of months so you can show regular "income" which you can explain any way you like.

ETA: Just saw pablo's post above. Maybe NYC is just weird?

 

[pablo]

Braumeister, that is exactly what I have done for years. I do business with 2 separate entities for: banks, taxable brokers, IRA brokers and credit cards. When I have had a need to show assets (very infrequently these days) I pick a few statements and only show the minimum necessary.

Kind of like the old joke about Milton Berle and Forrest Tucker!

 

[braumeister]

Not sure if this is family friendly enough for the forum, but ...
For those who may not know, Milton Berle and Forrest Tucker, the late comedian and actor, had genitalia of legendary size.

The joke went that when several members of the Friar's Club were in a steam room one day, Jackie Gleason wanted to bet on their respective endowments. His classic line was "Come on Milt, just take out enough to win the bet for me."

Ok, so just exactly how big was Milton Berle's schlong? (Facts, not jokes, please!) - Straight Dope Message Board

 

[Koolau]

Cough! Cough! Yes, well...

Regarding flow of income, we struggled with that when we got a mortgage (that we could have paid cash for - except it would have meant big taxes due to cashing IRAs). ONLY thing the bank accepted was what IRA/401(k) income we had taken on our 1040. EVEN though that meant we now had LESS assets, they were ecstatic with our "income" level. GO figure! My guess is that a big enough rental office would require similar if there is no earned income. Sounds silly, but who said big outfits are totally rational.

With a long-established, reputable rental firm, I don't think I'd be too hesitant to show my 1040s if that became necessary. Misusing the info is a Federal offense with relatively dire consequences (except when the gummint does it, heh, heh.) YMMV

 

[walkinwood]

We after ER from an individual owner through a real-estate agent. We showed them a portion of assets to assure them we had enough money. That and a credit check did the job.

A professionally managed apartment complex may be less flexible.

 

[rodi]

As a landlord I check credit score, look for income and/or asset statements.

I declined to rent to a couple that had just moved to the area, didn't have jobs, and would only agree to credit report on one of them. In CA there are real hardships evicting someone, even if not on the lease, if they are "de facto tenants"... so there was no way I'd rent without checking both parties of the couple. This same couple called me up angry when I continued to advertise - they figured I'd turned them down because I'd rented it already... (I never told them that - I'd been clear that both parties would need a credit check and proof of income or assets.)

For me, as a landlord, I need to set minimum standards that lets me reject folks who set off alarm bells. There are too many people ready to sue here in CA.

 

[brucethebroker]

As a landlord I check credit score, look for income and/or asset statements.

For me, as a landlord, I need to set minimum standards that lets me reject folks who set off alarm bells. There are too many people ready to sue here in CA.

Yep.....one of the few "filters" still allowed by the Feds when checking out future tenants. Where we snowbird, the assn. performs credit and background checks on buyers and renters. President told me I would be amazed at what they found out, and the criminals they kept out of the neighborhood.

 

[Scuba]

Perhaps I am naive, but what is the problem with showing a landlord your assets? You could black out the account number on the statements and at any rate, it would be very difficult for someone who isn't you to withdraw $$ from your accounts as they wouldn't have your password and security question answers.

 

[NYEXPAT]

We will be facing this when we move to the USA fo a few years. I am retired and my wife will be attending University. Most of the big complexes we have looked at only ask for a larger deposit if you can not prove income, along with a good credit score.

 

[ABQ2015]

On a related matter, what do you do about landlord references if you haven't rented in 30 years? Will landlords want personal references in lieu of landlord references?

 

[MooreBonds]

You can even enhance that scenario by making regular transfers of a fixed amount into those smaller accounts for a couple of months so you can show regular "income" which you can explain any way you like.

But what would transferring $X each month from your brokerage account to your checking account prove? Anyone with half of a brain would naturally ask "Well show me your brokerage statement to see what is funding these transfers - is it dividends? Bonds? Or do you just have $35,000 in cash that you are transferring out $4,000/month into your checking account?

 

[audreyh1]

But what would transferring $X each month from your brokerage account to your checking account prove? Anyone with half of a brain would naturally ask "Well show me your brokerage statement to see what is funding these transfers - is it dividends? Bonds? Or do you just have $35,000 in cash that you are transferring out $4,000/month into your checking account?

I think you just need to show that you have a balance that would cover a year's rent or some such?