Tenant income verification is a key step in the tenant screening process. If Income Insights recommends additional verification, landlords have several options for verifying income for employed, self-employed, and unemployed applicants.
In addition to income, landlords should review a potential tenants credit , background , eviction and criminal records before ultimately making a leasing decision. Exclusive to SmartMove, landlords will receive a ResidentScore , which is designed specifically for the rental industry. Conducting a thorough tenant screening is one of the best ways to ensure a positive rental outcome that keeps the rent check coming on-time, every time.
She focuses on topics that empower independent landlords through data, insights, and industry best practices that are typically reserved only for large property management companies.
She is also involved in marketing and social media efforts centered on communicating the importance of tenant screening to independent landlords. Can the tenant afford rent? How to verify income for employed applicants For employed applicants, the most basic way to verify income is to request any of the following: Pay stub.
A good rule of thumb is to ask for pay dated stubs from the most recent three months. W2 tax form. Employer phone call. This helps establish whether the tenant has had a stable income. How to verify income for self-employed applicants Self-employed individuals represent a bit more of a challenge, but you can verify their income through: Bank statements. However some applicants may see this as a little too invasive since it divulges information about their personal purchases as well. You can contact their employer to confirm they work there.
To do this, you need to contact the employer directly and issue an employment verification request. This is to ensure the applicant does, in fact, work there and to verify the income claim they made.
Running a credit check on a prospective tenant will give you information about their financial health. This credit check will show you if they have been able to fulfill all of their financial obligations. You will learn:. Employers will often run a credit check on an applicant before hiring him or her.
You would have to look further and contact the employer directly to determine the companies where the tenant was actually employed. Actively scan device characteristics for identification. Apartment and rental landlords are usually looking for 3 times monthly rent in gross income before your expenses. Some affordable housing apartment properties will accept 2 times monthly rent and a few more stringent communities will require 4 times monthly rent.
So what do you do if you do not have income? Maybe you are retired? Or you are a student? A landlord will likely ask for several income verification documents on the rental ap p lication , and before handing over the keys to that two-bedroom, south-facing apartment with exposed brick, they will also want to verify the provided proof of income documents to protect against any fake or fraudulent documents.
The most common question our landlords ask us — How do I pick a great tenant? In our 4-day email course, we will teach you our top tips and tricks and you will be a pro in no time! What is Proof of Income? A W-2 is an IRS tax form that must be completed by employers for each of their employees.
Employers report total annual wages paid on this form. A MISC is used to report various types of income someone may receive throughout the year for non-salary positions. Independent contractors and self-employed individuals use this form. A can also be a useful way to show proof of income for anyone that earns money from an asset or royalties. A bank statement can be used to show a history of steady deposits, or to shed light on any dangerous spending habits.
Many tenants may find this method of information verification a bit intrusive. After all, it is thought you can really tell a lot about a person based on their spending habits. However, there are various other ways to verify income for those who feel a bank statement is too personal. A pay stub, also known as paycheck or pay slip, is received by employees each pay period and shows net take home pay. Pay stubs are an easy way for renters to show how much they received in recent paychecks; however, they are also easy for renters to forge.
A letter of reference from an employer is a valid method for someone to show a landlord that they have a stable income and also that this income will remain steady over the lease term.
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