What is the 40-Times Rule?

This is simple folks!

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BY PROPERTY SOUP twitter @propertysoup

The 40-times rule is done by multiplying your monthly rent by 40, to determine the minimum annual pretax salary for which you qualify.

Some landlords may allow  roommates to use a combined income to qualify, an additional security deposit or a guarantor may surface.

Example

This is the minimum annual pretax salary to qualify for the rent prices listed below:

$1,000 x 40 = $40,000

$1500 x 40 = $60,000

$2000 x 40 = $80,000

$2500 x 40 = $100,000

$3000 x 40 =$120,000

$3500 x 40=$140,000

$4000 x 40 =$160,000

$5000 x 40 = $200,000

$6000 x 40 =$240,000

Guarantors are financially and legally obligated to pay your rent if you default.They must have an annual pretax salary of at least 80 times the monthly rental price.

$1000 x 80= $80,000

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