“Is it true that a pensioner must not rent over 30% of his or her income? Please give me some insight”
We asked Property Manager with Harcourts Integrity, Taryn Pearse for her advice on this question:
Taryn said the 30% rule is used as a ‘general rule’ to protect both tenants and landlords against financial hardship, due to the rising cost of general living expenses, such as utilities, food, rent, transport and medical costs.
“It is our moral and ethical obligation as licensed Property Managers to ensure we do not willingly lock a tenant into a contract for an extended period of time, which is beyond what the reasonable person can afford on a similar wage,” she said.
“Each situation is assessed case-by-case, however approving a tenant for a property which exceeds their comfortable spending limit will generally cause far greater financial problems for all parties involved further down the track.”
Taryn said the 30% rule is purely a guideline to assist in affordability assessments, but some people may have savings and assets which could also be taken into consideration.
We’ll be posting answers to reader questions every week. If you have a question you think would be interesting to see answered here, please send it to email@example.com
This post’s renting expert was Taryn Pearse, property manager with Harcourts Integrity