Renting an Apartment With No W2 Income as a Retiree

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Renting an Apartment With No W2 Income as a Retiree

Not having a W2 income was one of the things that made me a little uneasy when planning for early retirement. Would renting an apartment or getting a mortgage for a place be a massive headache?

My concern stands that when you need to open a new line of credit or fill out a rental application, one of the expected questions for you to answer is “what’s your annual income?”

For the most part, we’re living off our portfolio income. As a reader of this blog and possibly other personal finance blogs, that probably doesn’t seem out of sorts to you.

But for many front-line folks dealing with renting an apartment to others, for example, they might not be as versed in understanding this. I’m sure many have a method to handle this scenario with traditional retirees, especially with solid income streams like pensions or social security… but a 47-year-old living off his investments?

The irony is that many businesses looking for applicants for whatever reason tend to rely on income rather than net worth. And in most cases, having a high income doesn’t necessarily represent someone who can handle their money well. Whereas, a higher net worth will likely be a result of better money management. Exceptions do apply to both sides, of course.

When we lived in Panama over the past few years, having self-employment income, W2 income from an employer, or contractor income wasn’t really necessary to rent a place. We just worked with the landlord, signed a lease, and that was it. Yeah, things are different in countries like Panama.

But now that we’re back in the U.S., I was curious how this would work. We decided that for now, we’ll be renting an apartment in northeast Ohio where most of our family and friends are living.

How difficult would it be to rent a place as an early retiree living almost completely off of investments?

Our current income status

I’ve always been open with our numbers and I update our net worth every month on my, affectionately named, Net Worth page. As of June 1, that number was $1,475,912.02.

As a side note, we track our net worth – including all our investments, credit cards, and bank accounts with Empower (formerly Personal Capital). It handles all the legwork so I’m not manually entering all my transactions and then just presents me with solid information I need to know. You can try it out for free here using my affiliate link at no extra cost to you.

Outside of that, I’m hoping to bring in about $7,500 from this blog for 2022. That comes from ads and from your support in clicking through and trying products and services that I use and feel would provide value to you as well (like Empower, credit cards, or other recommendations).

That’s not too bad and makes for some nice supplemental income, but also be aware that that’s the most I’ll have ever made in a year. After making next-to-nothing on it for a few years since 2015, it’s kind of satisfying to show a little something for all the time I put into it. I appreciate the support!!

But that’s really about it.

When all’s said and done, we stick to a budget of about $45-$50k per year. And $50k is the amount of money that we have dispersed to us each year through our bucket strategy (which will be adjusted for inflation over the years). That money goes into our online savings account in late December or early January and then 1/12 of it moves into our checking account each month to spend.

In other words, we have a steady $50k per year income. That’s $50k per year of essentially guaranteed income since it comes from 5-6 years of living expenses we keep in cash or short-term bond funds such as BulletShares fixed income ETFs. Whether we have a job or not, that money’s there for us.

But would that be enough to satisfy a property manager we’re looking at renting an apartment from?

A note on finding a place

Boy, we sure picked the wrong time to come back from Panama! Between the rising inflation and the insane housing prices with both houses and rentals, things are a little crazy here.

Nonetheless, it is what it is and we still need to find a place to live. And we decided that renting an apartment rather than renting or buying a house made more sense for us, at least for this upcoming year.

We looked at a ton of apartment complexes online. I would bet that more than half of them didn’t have any availability at all. And the ones that did have gone up quite a bit in price and are a lot more expensive than we anticipated.

But we still found a handful of places that would work. So we went and toured some of them. Of the ones we looked at, there were only two that fit the criteria we were looking for in renting an apartment. Those were the ones I needed to talk more to the property manager about and see if we could do more of an asset-based application rather than an income-based one.

Here’s how that went…

Renting an apartment… candidate #1

This apartment complex was not our favorite but, since it’s just for a year, we thought it was worth digging into a little more.

So after we were done touring the facility and a demo apartment with the property manager, I went back to her office to discuss it.

Me: So, I have a question… can we do an application looking at our bank accounts and investment portfolio rather than income?

Property Manager [Looking confused]: Um…

Me: We’re early retirees and we live almost solely off our portfolio. So I’m hoping you could look at our bank and investment statements instead of W2s or anything like that.

PM [Still looking confused]: You mean like a 401(k)?

Me: Yes… well, sort of. We’ve rolled our 401(k) plans into traditional IRAs but yes, investment accounts like these and others.

PM: I’m not sure… maybe. We had a guy recently submit a Fidelity [yes, she said “a Fidelity”] – is that the same thing?

Me: Um, well, yeah – possibly. That’s the company so it depends on whatever the account was, but yes, that’s probably along the lines of what I’m talking about.

PM: I’d have to ask my boss but maybe we can do that.

It was a little painful. But again, it is what it is. She was a little younger (maybe in her mid-twenties) and obviously doesn’t understand a lot of this. Most folks don’t though regardless of age so I can’t blame her.

I do know that this was probably not going to go as smoothly as I was hoping. If we decided to apply here, it would probably involve jumping through some hoops. And even then, who knows how that would go?

Renting an apartment… candidate #2

After touring a couple of other places, we found potential candidate #2. We liked this one much better than candidate #1 and decided this would be the one we’d go with… if we could.

This was a much bigger operation though so I was a little nervous about whether we’d be bending over backward to make it happen… fun. However, the property manager was extremely friendly and helpful and seemed to be on top of things.

When we were done looking at a couple of model apartments there, we went back to the car and talked about it. All of us were in agreement that renting an apartment here would be a winner.

So I went back to the office to talk to the property manager with expectations not much higher than the confusing discussion I had with the other place. Here’s how it went here though…

Me: So, I have a question that might be a little weird… we’re early retirees.

Property Manager [Interjecting]: That’s great! Congratulations!

Me: Thank you. Yeah, well, with that being the case, we’re living off our investments for the most part. Would it be possible to do an asset-based application instead of an income-based application?

PM [Not missing a beat]: Sure, that’s not a problem – you can submit your investment statements when you apply online. That’s not a problem at all. The only issue is that the new program we use might be a little finicky so if you have any issues, I can help you with it.

Me: Is there a place where we can add notes to explain things or anything like that?

PM: You shouldn’t need to – all the applications go through me anyway for review.

Me: So, that’s it? We’re good?

PM: Yep, not a problem at all!

Me: Awesome – thank you!

I walked away from that feeling good. Who says renting an apartment as an early retiree is difficult?!

And indeed, we got back to our temporary home in my in-laws’ basement and applied online for candidate #2 – our preferred choice anyway.

I was a little nervous after not hearing anything back for a while just because it’s some slim pickings out there as far as available apartments go! But, after a few days, I got a call from the PM letting me know that we were approved and she was working on figuring out an apartment for us based on upcoming vacancies.

Since then, we now know which apartment will be ours there. We’re set to move in after our road trip and once we pick up all the furniture we bought in North Carolina.

So, if you’re a retiree or on the path to becoming a retiree with a good net worth but no W2 income, take heart in knowing that there are some property managers that will rent to you!

Plan well, take action, and live your best life!

Thanks for reading!!

— Jim

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17 thoughts on “Renting an Apartment With No W2 Income as a Retiree”

  1. Fantastic article Jim and very timely. We will be looking for an apartment in the next couple of months and I will definitely use the “asset based application” terminology. I hope you get credit for coining the term. I’ve also heard that “asset based mortgage applications” is also a term understood by some brokers.

    Question – Did you feel the need to obfuscate any of the information on the forms you sent in to protect against fraud? If so, please let us know if you have any software recommendations.

    1. With this place, the PM told me it was ok to redact sensitive information. So I downloaded my PDF statements and then used Kami to put black boxes over my account numbers on each page. There are many free tools to do so but that was the site I’m used to using so went with that. I would imagine any place would allow you to redact account numbers, Social Security numbers (if any horrible places are still adding that on the statements), etc. Best of luck to you!

  2. Thanks for sharing! We rented for a year on the NC coast in a town with a lot of short-term vacation rentals and had no issues with their long term rental branch. I’ve the feeling their platform is set up for short term rentals so we didn’t need to disclose much – we used our Roth conversion amount as “income”. In 2022 we found that renting a monthly AirBnB furnished rental was cheaper in the same town than an unfurnished apartment, so we went that route and we’re able to pay with cc.

    1. That’s great, Jolene, and good information to know! We actually looked for an Airbnb for our longer term needs just for the heckuva it but couldn’t find anything that made financial sense in our case. Appreciate you sharing!

  3. Great post! My wife and I are looking at doing something very similar once our youngest leaves the nest in about 2 years, and I’m concerned about this topic specifically. I’ve specifically heard that larger corporate tenants can be more challenging when dealing with asset-only applications, so glad that there are at least a few (or at least one LOL) that will!

    One question – did your selection of these two candidates take into account any potential concerns about not being able to rent due to a lack of income? Or did you just select these candidates based on other factors (ie location, price, schools, etc) like anyone else and just keep your fingers crossed that they wouldn’t be weirded out by someone without income (but with plenty of assets)? Hoping it’s the latter but wanted to check.

    In any case – congrats on finding a place to live!

    1. Haha, you’ll be glad to know it was definitely the latter! We knew the locations that made sense to us, just rolled with it, and made it happen. Hopefully, things will work in your favor as well… best of luck!!

  4. Very interesting and informative post. My wife and I actually own a tiny house which sits on a lot we rent in a very rural and scenic part of NC. When I had tried explaining our financial situation to the lot owner, the conversation went a lot like your conversation with the manager at the 1st complex you looked at. I ended up offering to pay 6 months rent up front to put her concerns at ease. This probably would not be a viable solution for most apartment rental situations because of the significant upfront cost, but in my situation the monthly lot rent is low & 6 months total rent for me is probably equivalent to 1 month apartment rent in most places. Anyway, I like the way you set forth your financial situation to the property managers & plan to use some of your wording the next time I have to rent a lot for my tiny house. Thanks!

    1. Wow, that sounds like one heckuva low-rent place, Matthew! Cash is definitely king and offering to front money like that is a great way to bring the concerns down for a landlord. As you said, it might not be viable for everyone, but that’s a great option when possible. Sounds like things worked out well for you – that’s fantastic!

  5. Hi, Thanks for writing about this, being an early retiree, I’ve been holding off on moving worrying about this, but I guess if one has suffficient funds, people will rent to you, only drawback is if they know how much you have, one maybe in for steep increases every year and or have to keep moving, so I’m staying where I am as long as possible.

    1. Yeah, the privacy thing can be a little iffy so that’s something to consider. For an apartment complex though, I can’t see them raising the rent dramatically specifically for one tenant (not even sure if that’s legal). But for a single-family house, I’m sure that’s feasible. I don’t blame you for staying put, especially if you like where you’re at. 🙂

  6. Oh wow, that was relatively pain-free. Good thing the 2nd manager knew about FIRE. 😉
    Did you guys consider Airbnb? That seems like a good option if you’re staying for 6 months to a year. Finding a rental sounds daunting in this market.

    1. Yeah, Lisa spent some time looking into Airbnbs in some of the vicinities we were looking since we were initially going to be coming back with no furniture at all. Unfortunately, we couldn’t find anything that made sense on the $$$$ side of the equation. It all worked out ok regardless! 🙂

  7. I am in a similar position (retired in my 50s, so not old enough for Social Security and I don’t have a pension) and am thinking about selling my house and moving to and renting in FL. In communications (email, phone, or in-person) at several complexes, most places seemed to have an income requirement of 3x (or less frequently 2.5x) the rent amount. Many places would accept assets in lieu of income, based on bank statements. For example, to rent a $2K/month apartment for 12 months, I would need to provide proof of $72K of assets, and I keep more than that amount in liquid accounts (CDs, money markets, etc.) This is much easier than figuring out the asset based mortgage stuff, which varies a lot by lender. Some leasing office staff definitely didn’t understand how this worked and/or had to talk to a manager. I think it would be more hit or miss at smaller apartments or renting a condo, so going forward, I would do more screening by phone or email, rather than wasting time visiting a place that is going to require W2 income. It does not make sense IMO to consider someone who maybe has only held a job for a few months a better risk than someone who has been responsible with money for years and retired early, but that is their decision and out of my control.

    1. Great info – thanks for sharing! It’s interesting how hit or miss this can be. I’m with you on the thinking that someone who has built up their assets is generally going to be less of a risk than someone working at a job that may or may not be stable. But like you said, that’s up to them. 🙂

  8. Hi Jim – thanks for sharing your experience on this! I know this is a couple years old but I still have a follow up question I hope you can answer. We are early-retired and are thinking about selling our house and renting in the new area we plan to move to for a year. Looking at rentals made me start thinking about just this issue, dealing with proof of assets rather than income. My question is, how much in assets will they be looking to see proof of? I’d prefer to show as little as possible, just what they require, I want strangers to have as little info as possible about my financial life. Did you get any sense of how much in assets you needed to show, or did you just show it all? TIA!

    1. Funny enough, we just went through this exact process again yesterday. We just moved into a new apartment and needed to submit proof of income. I let them know beforehand again that we’re early retirees and don’t have a W2 income and instead get “paid” from our investments and savings. I then asked them how they handled portfolio or asset-based income.

      That I think is the key to your question because different places had different ideas of how they wanted it handled. One said to just fill out what are monthly income would come out to be on the application while another wanted documentation. Since different landlords might handle things differently, you probably just need to ask upfront. With the place we chose yesterday, I submitted enough documentation of our investment accounts to make them feel comfortable with me as a tenant but not all our accounts just because it would have been overkill. As a side note, I also redacted confidential information on the statements that they don’t need to know.

      And, we were approved today! Good luck – I hope it goes well for you, too!

      1. Jim, thanks for sharing your experience. I agree that it will be variable from place to place, landlord to landlord. I was just exploring beforehand to get a feel for what the process might look like. We early retirees are kind of known for doing our homework, as you know well! And hey, congrats on the approval, that’s great! Hope you all love the new place.

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