Enter the monthly rent ($) into the calculator to determine the Guarantor Annual Income Required.
- All Rent Calculators
- Fortnightly (Bi-Monthly) Rent Calculator
- RPI Ground Rent Calculator
- 3 Times Rent Calculator
Guarantor Annual Income Required Formula
The following formula is used to calculate the Guarantor Annual Income Required.
GAI = MR * 12 * 3
- Where GAI is the Guarantor Annual Income Required ($/year)
- MR is the monthly rent ($)
To calculate the guarantor annual income required, multiply the monthly rent by 36.
How to Calculate Guarantor Annual Income Required?
The following example problems outline how to calculate Guarantor Annual Income Required.
Example Problem #1:
- First, determine the monthly rent ($). In this example, the monthly rent ($) is given as 1300.
- Finally, calculate the Guarantor Annual Income Required using the equation above:
GAI = MR * 12 * 3
The values given above are inserted into the equation below:
GAI = 1300 * 12 * 3 = 46,800 ($/year)
FAQ
What is the purpose of requiring a guarantor for renting?
A guarantor acts as a safety net for landlords by ensuring that rent will be paid even if the tenant is unable to make payments. This is particularly important for tenants who may not meet the income requirements or have a less stable financial history.
How is the Guarantor Annual Income typically calculated?
The Guarantor Annual Income is typically calculated by multiplying the monthly rent by a factor (in this case, 36) to ensure the guarantor can cover the tenant’s rent for an extended period, usually a year, in case of financial difficulties.
Can someone be a guarantor for more than one lease?
Yes, an individual can act as a guarantor for more than one lease. However, they must ensure they meet the income requirements for each lease they guarantee, which may significantly increase the total annual income required to qualify.
