The COVID-19 global outbreak and its duration caught everyone by surprise, and one of the most challenging processes with the new normal is finding a new apartment for rent, especially with a new reduced salary, which is the case of many people.
The rule of thumb used to be having an annual household income of at least 40 times the monthly rent. Today, many landlords are being more open-minded and flexible when it comes to checking the requirements to potentially sign a lease with a new tenant. So, if your salary has been reduced but you still need to rent an apartment, you could try to emphasize some of the following points that might help your application:
- Credit Score: demonstrating a great credit score will show your landlord that you really care to pay your obligations on time, which will also be a good indicator that you are very much likely to never miss a rent payment.
- Personal or third-party guarantor service: if you are lucky enough to have parents, friends, or relatives that are willing to serve as your guarantor, this can be a great option since many landlords are open to this. Just keep in mind that your guarantor should make at least 80 times your monthly rent and in some cases, the landlord might request your guarantors to live in the same state. Another alternative is to check the companies that offer third-party guarantor services. These usually cover you even if you have a lower annual income:
- Demonstrate past annual income through previous contracts and tax returns: if you have been working at the same company for over a year, you might be able to demonstrate with your previous contract that you had a higher annual income before COVID-19. This might indicate that once the economy is fully reactivated, there is a good chance that your salary will go up again. An alternative in case you are new to the company you work for is to present your tax returns as well.
- Certificate of employment: to prove that you are currently working for a company, which means that you currently have a monthly income to cover your expenses.
- References: if your previous lease ended up in good terms, you could ask your landlord for a letter of reference, stating you paid rent on time throughout the duration of the lease and that you took care and left the property in good condition. Professional and personal references will also help!
- Savings: providing bank statements showing your savings accounts is also a good back-up to demonstrate you have enough savings in case of unemployment or financial emergencies. You can also show proof of assets you might have invested in stocks or other types of financial assets.
- Move-in with others: Landlords usually look at the combined household income. So renting an apartment with roommates or a significant other means you will be able to combine both of your financials at the time of the application.
Finally, you might want to consider more affordable and simpler options, such as taking over someone else's lease, subletting, becoming a roommate, or trying to find potential roommates to find accommodation and sign a lease together.
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