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Let's say someone has high assets (say, over a million), but currently has no salary, but do have passive (interest and dividends) income. How difficult would it be to rent an apartment? I've heard that some landlords would rent out an apartment on the basis of assets, but I'm curious how likely that would actually be in practice. Assume this is in the United States and that the renter has good credit and had good income a year ago, but currently has almost no income. So my questions would be:

  • What kind of proof of assets would be required? A copy of a bank statement? A letter from your bank or brokerage?
  • How much in assets would a landlord require?
  • How common is it for a landlord to consider something like this?
  • Would it be more common for a large corporate landlord, or a small mom-and-pop landlord?
  • You might want to mention what country you would be renting in and whether you have established credit in that country. In Canada I've supplied letters to people indicating employment status and income for rental purposes. I would imagine a tax return or letter from a broker would serve a similar purpose. – Spehro Pefhany Aug 27 '18 at 16:30
  • Also specify what kind of apartment you're looking for. Many land lords don't require much more than the agreement to pay. Our A/C guy was telling us yesterday that he got his apartment just by saying he is looking for a job and he's HVAC certified. In some places, that's like saying I can't be unemployed long. That works with some, and then larger managed properties may not budge on rules. So if you have millions in assets but you don't care to live like a millionaire then you may not need much more than your word. – Kai Qing Aug 28 '18 at 18:47
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Hi there I see you are new to this community. Keep in mind that this is a worldwide community and questions of this nature will likely have differences between, countries, regions, and possibly even neighborhoods. You gave no indication of where this question is applicable.

Your best bet in this situation would be to start calling landlords. It is best to stick with smaller, "mom and pop" type landlords as they have more flexibility. Corporate policies may prevent flexibility to a person with little income.

One way to get around any kind of limitations in income or even credit would be offer to pay the rent in advance; or, offer a larger than normal security deposit.

For example lets say you find a place that you like that rents for 1,000 per month. You agree to sign a lease for one year, offer to put down two months worth of security deposit, and pay 10,000 for the entire year. Many landlords would be very happy to have that kind of deal, and you saved yourself 2,000! If you have significant assets coming up with a year's worth of rent is no big deal, and it might be a really good investment. In my scenario earned about 20% on their money from rent savings!

This would clearly be a uncommon situation as most people don't have significant assets. Those that do, can show tax returns of them drawing off money that count as income; and they might just prefer to buy. Instead of renting they could also do a long term hotel rental.

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Landlords don't care if you have a job, they care if you can pay the rent.

https://www.myrentalhistoryreport.com/blog/legal-issues-and-renting/what-information-can-potential-landlords-legally-ask-you-for/

Landlords can ask for information such as pay stubs or bank account statements to prove that you are able to afford the rent.

If you live only on passive income, then a bank statement showing how much income you get every month should be equivalent to a pay stub.

EDIT: What if your salary was only $20K, and you wanted to rent an apartment which requires a $40-$60K salary? You can't do it. You can only rent an apartment suitable for a $20K salary. Unless you want to "eat your seed corn" by slowly divesting your assets. Then you can afford the more expensive apartment. Eventually, though, you'll:

  1. run out of assets, and thus
  2. have no passive income.
  • Thanks, that's good to know. But in this case, say, dividends are 2%, which corresponds to, say, 20k, which isn't much income to qualify for a rental that requires income of 2-3 times rent – user76313 Aug 27 '18 at 16:40
  • (Don't forget taxes!) What if your salary was only $20K, and you wanted to rent an apartment which requires a $40-$60K salary? You can't do it. You can only rent an apartment suitable for a $20K salary. – RonJohn Aug 27 '18 at 16:53
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    Fair enough. But let me exaggerate it a little to make the point. Say it's $4 million all in Berkshire-Hathaway, so there's no dividend income, but it's clear the renter should be able to afford $1,000/month in rent for a year or so. – user76313 Aug 27 '18 at 17:04
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    @user76313 that's covered under "slowly divesting your assets". – RonJohn Aug 27 '18 at 17:09
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    @RonJohn: You claimed "slowly divesting your assets" in your answer is something that will make you run out. Redeeming a portion of capital gains (and leaving the other gains to compound) is completely feasible and sustainable. So do you include that as "divestment of assets" (in which case your answer needs an edit) or not (in which case your comment is wrong)? – Ben Voigt Aug 28 '18 at 0:24

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