5 Ways to Get Around That Pesky 40X-the-Rent Requirement

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In certain cities (especially New York), property management companies require you to have an annual salary of 40 times the rent in order to be approved as a new tenant. That may be way more than your pay stub will ever show. So, if you’re in those shoes, are you forever doomed to be a subletter? Not necessarily. Though a salary of 40 times the rent is ideal budgeting advice, it’s not the end of the world if it’s not possible in your situation.

Here’s How to Get Around The 40x Rule

Here are five ways you can still get that apartment (even if you don’t look so good on paper).

1. Pay an extra security deposit

“Those who don’t happen to make 40 times the rent of an apartment certainly have other options when it comes to renting,” says Adam Frisch, managing principal at Lee & Associates Residential in New York City. “For example, I often advise the landlords I work with to allow tenants to pay an extra security deposit. This is the same course of action I would advise if a potential tenant has been in their job for less than six months.”

2. Have a stellar credit score

Ultimately, the experts I asked agree that a far better marker of your tenant ‘worthiness’ is your credit score. Make sure your credit report is in the best shape possible as you begin your apartment search.

“Credit shows how people pay their bills which will likely be a forecast of how they will pay their rent,” Frisch says. “Unfortunately, numerous people have high incomes but are not financially responsible with their bills.”

3. Get a guarantor

Another way to boost your viability as a potential renter? Find a guarantor—and this doesn’t have to be your parents. But remember that, in general, your guarantor must have an income in excess of 80 times the rent.

“When it comes to qualifying for your dream apartment, it doesn’t hurt to get creative about your guarantor,” says Gary Malin, president of Citi Habitats. “A guarantor can be anyone with whom you have built a relationship of trust. Our agents frequently work with clients who use friends, their significant other, or even their boss to guarantee their lease.”

4. Use a surety bond service

In addition, several new companies in the marketplace will provide a ‘surety bond’ (guarantee) and co-sign your lease in exchange for a one-time fee (usually between five to 10 percent of your annual rent or one to 1.5 months rent). These include Insurent, Jetty, TheGuarantors and LeapEasy.

5. Find a smaller building

Another option if all else fails: Target smaller buildings.

“If you’re looking to move into a professionally managed building, the leasing office probably won’t have much room to budge on terms,” says James McGrath, a licensed real estate salesperson at Yoreevo. “They’re given their marching orders from corporate and don’t have an incentive to push back.”

However, a landlord with just one to two properties may be more flexible.

“If you come across as responsible and have a good story, you have a decent shot at getting approved,” McGrath adds. “You can also negotiate and offer to pay the first two or three months upfront to make the landlord more comfortable with your situation.”

In the end, a good leasing company or broker will hopefully look at you as more than just a pay stub. If you think you won’t be accepted because of your income or credit score, tell your real estate agent. Together, you can come up with other ways to show the landlord you’ll still make a great tenant.

“I always tell my clients that we have to look at the full picture,” says Karen Stone, a real estate broker at Halstead Real Estate in New York City. “Sometimes, if a person doesn’t make the rent requirement, we can look at their assets, get them to put down additional rent, and perhaps get a letter from their former landlord verifying that they paid their rent on time.”

That’s because, in the end, paying your rent on time is truly what matters most to any potential landlord.