Since no one wants to rent an apartment or house to a person who can’t pay the rent, following these necessary steps to verify tenant income is recommended.
Whenever you speak to someone about renting from you the first thing you will want to ask them is how much their income is. This avoids you going to the trouble of showing someone your rental property if they can’t afford it. It also prevents you from giving them false hope that you will rent to them.
Once you have a candidate that has stated an acceptable amount of income the next step is to have them fill out an application to rent your property. At that point you will want to have the candidate submit the official paperwork that will help you verify tenant income. Upon signing this paperwork the candidate will be certifying that they are telling the truth about their income. It will also give you permission to verify the candidate’s employer for yourself. It is helpful to call the candidate’s employer and verify that they do work there and that they earn the income they told you they earn.
In addition to paperwork you will also need to obtain your candidate’s recent paystubs, tax returns or personal bank records. When you have these documents they need to be kept between you and the tenant candidate or you may be in violation of privacy laws.
One thing to avoid when attempting to verify tenant income is the candidate giving you cash up front. This is often something that dishonest candidates do and should be a red flag that the person has something to hide. Unless you can verify that they have a high enough income do not let the promise of cash up front be enough to sway you.
When you are determining whether a candidate meets your qualifications for rental you will need to be consistent with everyone. You must hold everyone who applies for your rental property to the same standard. In order to determine if a candidate is eligible to rent from them many landlords apply a ratio of income to rent. There is nothing wrong with doing this as long as you are equally fair to everyone in the process.
Following these steps is the best way to correctly and legally verify tenant income before renting to someone.