Calculate Their Rent-to-Income Ratio and Verify Financial Health
By getting a full understanding of your prospective tenant’s financial wellbeing, you’ll have the details you need to make an informed decision. Our advice on how to calculate their debt-to-income ratio can help you see if they’re able to afford the rent and stay afloat financially as well.
Do the math and factor in other monthly payments. By adding up the total monthly obligations or payments — as defined in the tenant credit check — you can get a picture of their financial wellbeing.
Know How to Prorate Rent When Your Tenant Starts Mid-Month
Prorating rent may be necessary if your tenant’s move in date doesn’t coincide with the first of the month. It’s a simple formula that breaks your rental cost down to a per-day fee. Here’s how it’s done:
Divide the total monthly rent by number of days in the month. If rent is $2,500 per month and May has 31 days, the result is $81.65. That’s your per-day rate.
Multiply the per-day rate by the total number of days that the tenant will be occupying. If the tenant moves in on the 14th, then there are 17 days left in May. 17 x 81.65 = $1,388.05 is the total due for that month.
Lease Addendums and Pet-friendly Rentals
Those furry friends are loyal companions and many consider them part of the family. But they’re occasionally naughty — scratching up hardwood floors or clawing at window sills — and the damage they cause can be extensive. Be sure to discuss your tenant’s pets and any guidelines you have regarding a pet in your rental home.
Reach out to your American Family Insurance agent to learn about how bundling your insurance products can save you money. Our agents are specifically trained on all the ways to offer discounts and can help better insure your rental business as well.