Author Topic: Renting in ER without Proof of Income  (Read 3900 times)

wwweb

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Renting in ER without Proof of Income
« on: January 31, 2017, 08:23:44 PM »
Something has been on my mind lately...

If I wanted to rent an apartment in early retirement (age <35), how would I get past proof of income requirements? Renting appeals to me, but I'm unsure how I could get a lease without divulging much more financial information than I might want to share. Many people on this forum advocate renting in ER and I'm curious how the logistics worked out? How did you convince your landlord to rent to you?

less4success

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Re: Renting in ER without Proof of Income
« Reply #1 on: January 31, 2017, 08:46:08 PM »
From https://livingafi.com/2015/12/18/home-ownership-a-retrospective-and-beyond/:

Quote
Renting Without a Job

Most renting agencies require ‘proof of employment’ in order to accept you as a tenant.

...

So I said:  Since I’m not working, I can’t show a paystub.  However, my financial footing is extremely solid.   Can you work with me on this?

...

They initially asked for proof-of-assets.  I asked what they were looking for and the first response was “everything.”  I took this to mean checking account balances, retirement accounts, and any other investment income or properties we owned.

But there was no way that I was going to simply disclose my full asset sheet. This is a safety/security/privacy issue in my book.

So I turned it around and just asked point-blank: What’s the minimum requirement?  I’ll show you I can meet whatever that is.

They said:  Our policy is you must have 40K in a checking account.

...

My wife and I agreed that we didn’t want to share any more details of our financial holdings than absolutely necessary.  So we found ourselves simply transferring that 40K into a checking account, and getting the balances printed out by our bank.

Problem solved.

Point of this is:  If you’ve retired, you can, in most cases, secure an apartment without a current pay-stub.  When apartment complexes say that a pay-stub is a requirement, they’re really just stating their preference.  In truth, alternate paths to acceptance exist.

So engage your prospective landlord head-on, give them some skeletal details about your situation and ask what they need to see.  In most cases you’ll be able to work something out.

wwweb

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Re: Renting in ER without Proof of Income
« Reply #2 on: January 31, 2017, 08:48:20 PM »
Thanks, I don't know how I missed that. I was a regular livingafi reader while the blog was still active and I did some googling before I posted this question.

less4success

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Re: Renting in ER without Proof of Income
« Reply #3 on: January 31, 2017, 08:50:25 PM »
Thanks, I don't know how I missed that.

He does have a reputation for writing very... very... long posts ;)

Axecleaver

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Re: Renting in ER without Proof of Income
« Reply #4 on: February 01, 2017, 02:51:22 PM »
You can also prepay a year's rent. We've done this in my line of work before for apartments near the worksite, landlords tend to appreciate that quite a bit, can even negotiate some nice discounts that way.

GizmoTX

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Re: Renting in ER without Proof of Income
« Reply #5 on: February 01, 2017, 03:56:21 PM »
DS is a graduate student & needed to rent an apartment on his own. In the past, we signed a guarantee, but we're now retired/unemployed, & DS is now responsible for all his own bills. DS showed the management an account statement that has about $30K -- done.

wwweb

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Re: Renting in ER without Proof of Income
« Reply #6 on: February 02, 2017, 06:02:16 AM »
DS showed the management an account statement that has about $30K -- done.

This is very interesting. I was imagining that the landlord would want to see >$100K. A non-mustachian person can burn through $30K pretty quickly.

Has anyone here had a bad experience trying to rent without proof of income while FI (or close)?

Retire-Canada

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Re: Renting in ER without Proof of Income
« Reply #7 on: February 02, 2017, 09:56:13 AM »
Start laying out $1000 bills on the desk of the rental manager. Get a year's worth of rent on the table then ask "Are we good?"

pablo

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Re: Renting in ER without Proof of Income
« Reply #8 on: February 02, 2017, 06:25:53 PM »
I don't know about other locations, but in NYC, if you have been FIRED for several years, you are likely screwed. Landlords will want tax returns, W2, pay stubs, and a credit report. If you have been FIRED > 1 year what do you show? All of the employment and tax items will be too old! And if you offer to prepay rent or give them cash upfront you will simply seem shady. The rental market in NYC is so hot, landlords don't need to bother with any 'unusual' situations. They just go to the next 'normal' applicant.

The only solution that might work in NYC would be a second person guarantee.

Ironically, an unemployed person or a recent graduate has an easier time getting a rental in NYC - because they will be working soon.

respond2u

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Re: Renting in ER without Proof of Income
« Reply #9 on: February 03, 2017, 10:38:45 AM »
Something has been on my mind lately...

If I wanted to rent an apartment in early retirement (age <35), how would I get past proof of income requirements? Renting appeals to me, but I'm unsure how I could get a lease without divulging much more financial information than I might want to share. Many people on this forum advocate renting in ER and I'm curious how the logistics worked out? How did you convince your landlord to rent to you?


I showed my bank balance one time to get around the "recent paycheck" thing. Worked well. I was already living there and just re-signing a lease, but cash works wonders.

Schaefer Light

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Re: Renting in ER without Proof of Income
« Reply #10 on: February 03, 2017, 02:30:51 PM »
DS showed the management an account statement that has about $30K -- done.

This is very interesting. I was imagining that the landlord would want to see >$100K. A non-mustachian person can burn through $30K pretty quickly.

That's true, but I'm guessing that a very small percentage of the population has $30k in a savings account.

Retire-Canada

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Re: Renting in ER without Proof of Income
« Reply #11 on: February 03, 2017, 02:40:27 PM »
I currently own but if I was renting I'd offer cash up front for several months (but not a whole year) and/or a larger security deposit.

You could just sit a roll of $30 x $1000 bills on the table and say "How about I give you six months rent in cash right now?" ;)

Ann

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Re: Renting in ER without Proof of Income
« Reply #12 on: February 03, 2017, 06:08:13 PM »
I currently own but if I was renting I'd offer cash up front for several months (but not a whole year) and/or a larger security deposit.

You could just sit a roll of $30 x $1000 bills on the table and say "How about I give you six months rent in cash right now?" ;)

Actually, I don't think this would get you into a respectable rental place.  I think they would assume you would be dealing drugs or guns or some part of illegal activity on their property.  Right?

Retire-Canada

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Re: Renting in ER without Proof of Income
« Reply #13 on: February 03, 2017, 06:33:26 PM »
Actually, I don't think this would get you into a respectable rental place.  I think they would assume you would be dealing drugs or guns or some part of illegal activity on their property.  Right?

I think it would depend on if you look like a drug dealer or gun runner. Show up in a older model Honda FIT with a DIY roof rack, well worn clothes and a peace sticker on the bumper - I suspect you won't be  mistaken for a criminal.

Ann

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Re: Renting in ER without Proof of Income
« Reply #14 on: February 03, 2017, 07:05:39 PM »
My apartment complex doesn't accept cash payments.  I tried once.  I totally understood, though: too high a risk for a "he-said-she-said" situation.  And it would increase the risk of being targeted for robbery if people knew there might be thousands of dollars in cash at the office.

Retire-Canada

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Re: Renting in ER without Proof of Income
« Reply #15 on: February 03, 2017, 07:34:46 PM »
My apartment complex doesn't accept cash payments.  I tried once.  I totally understood, though: too high a risk for a "he-said-she-said" situation.  And it would increase the risk of being targeted for robbery if people knew there might be thousands of dollars in cash at the office.

They don't have to take the cash. The cash serves to demonstrate your ability to pay the rent. If they then say we'll accept you, but we require payment by cheque your income testing problem is solved.

chasesfish

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Re: Renting in ER without Proof of Income
« Reply #16 on: February 04, 2017, 10:39:04 AM »
I've just disclosed my brokerage account in a competitive rental situation.  Did the trick

wwweb

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Re: Renting in ER without Proof of Income
« Reply #17 on: February 04, 2017, 08:19:57 PM »
I've just disclosed my brokerage account in a competitive rental situation.  Did the trick

Did you feel uncomfortable disclosing that information?

I tend to keep my financial details (esp. net worth numbers) private. There is only one person who knows my rough net worth, and only a few friends know that I have significant savings. I'd be fine showing a potential landlord a checking account with $40,000 but I would feel weird disclosing my brokerage balance to a complete stranger.

lhamo

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Re: Renting in ER without Proof of Income
« Reply #18 on: February 04, 2017, 09:01:05 PM »
I have gone through two rental searches in the last two years in Seattle.    I did not find it to be a problem, but it may have helped that:

1)  I had good local personal references (my professors from the local university, who I have known for 30 years

2)   The reason I moved back was because my son was admitted to a highly competitive early entrance program at the same university

3)  Almost all the landlords I met were private owners, and I took the time to explain my situation to them and came prepared with printouts of my credit score and copies of our latest account statements -- I was not nervous sharing those details at the balance levels we had at the time (substantial retirement accounts,  less but still a significant amount in liquid savings.

I was also ready and willing to pay the rent up front if they had asked me to, but none did.

I think you need to accept that if you aren't willing to be open about your numbers, some landlords/management companies may reject you.  If you are in a tight market, that may become an issue.   Up to you to decide how to deal with it.   Would you rather get a job so you have a paystub to show them instead?   That is always an option, at least while you are looking for a new place. 

daverobev

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Re: Renting in ER without Proof of Income
« Reply #19 on: February 05, 2017, 11:26:34 AM »
I've just disclosed my brokerage account in a competitive rental situation.  Did the trick

Did you feel uncomfortable disclosing that information?

I tend to keep my financial details (esp. net worth numbers) private. There is only one person who knows my rough net worth, and only a few friends know that I have significant savings. I'd be fine showing a potential landlord a checking account with $40,000 but I would feel weird disclosing my brokerage balance to a complete stranger.

What does it matter if someone you have no emotional relationship with knows that a person they do business with has $x in the bank? Unless you think they are going to steal from you, or discriminate against you.

I wouldn't disclose on here because I don't want "the internet" - which could be anyone - knowing. But disclosing in confidence for the purposes of a business transaction? Is it different than a bank getting your credit report?

wwweb

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Re: Renting in ER without Proof of Income
« Reply #20 on: February 05, 2017, 11:50:05 AM »
What does it matter if someone you have no emotional relationship with knows that a person they do business with has $x in the bank? Unless you think they are going to steal from you, or discriminate against you.

My biggest concern would be that an unscrupulous landlord might see a high account balance as an invitation to sue or make unreasonable demands regarding repairs when the lease ends.

However, I think most landlords are scrupulous so my overall level of rational concern is pretty small. Really, I'm just trying to figure out how different options for living arrangements work in FIRE. If I wanted to rent and needed to share my brokerage account balance to do so, I would share the information.

daverobev

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Re: Renting in ER without Proof of Income
« Reply #21 on: February 05, 2017, 02:30:12 PM »
What does it matter if someone you have no emotional relationship with knows that a person they do business with has $x in the bank? Unless you think they are going to steal from you, or discriminate against you.

My biggest concern would be that an unscrupulous landlord might see a high account balance as an invitation to sue or make unreasonable demands regarding repairs when the lease ends.

However, I think most landlords are scrupulous so my overall level of rational concern is pretty small. Really, I'm just trying to figure out how different options for living arrangements work in FIRE. If I wanted to rent and needed to share my brokerage account balance to do so, I would share the information.

Oh, I get that, absolutely. You'd want to do your research on the landlord in just the same way they do their research on you!

Ideally somewhere that is managed by a company.. but of course just renting half a house, or whatever, is likely cheaper due to less overhead.

2Birds1Stone

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Re: Renting in ER without Proof of Income
« Reply #22 on: February 05, 2017, 09:18:10 PM »
I don't see this being a problem.

As someone else said, show the minimum required, pay upfront, etc etc.

I give my landlord 6 post dated checks for rent at a time, as a result...in 4 years he has never raised our rent.