Verifiable income for rental properties has become bigger than ever.
Property management companies and most apartment communities have always had policies in place for verifiable income. Combined with the tightest rental market since Hurricane Andrew, these requirements are becoming stricter. Property owners, management companies and apartment communities have more prospective renters to choose from so verifiable income plays a larger role in the selection process.
In addition, a small percentage of HOA’s (Home Owners Associations) have implemented income requirements. Although these requirements are based on the amount of income a prospective renter must earn (ie: 3 times the monthly rent) they are usually strict as to how it if verified (ie: paystubs, tax returns, etc.)
Your Income may be verifiable: Some of our customers believe their income is not verifiable when it actually is. Most will ask for recent paystubs, W-2’s, 1099’s or tax returns. If you don’t have paystubs, W-2’s, 1099’s or tax returns, look to the following as means of verifying income:
1. Copies of checks from the source of employment
2. Bank statements showing consistent monthly deposit amounts
3. A letter from your employer stating you earn a certain amount of cash on a regular basis. This should be on company letterhead. Notarized is a plus. This is common in certain industries (ie: service industry, landscaping, etc.)
4. A letter of new employment. This is very common for people new to the area that haven’t started working yet. This should be on letterhead with employer contact information so it can be verified.
5. A letter or statement (notarized if possible) from a family member, ex-spouse, friend, etc. stating they provide support each month and the amount.
In lieu of income: If you do earn income that is not verifiable other things may be taken into account to make an owner feel more secure about their decision:
1. Extra move in money. This is the most common. Be prepared to pay first month’s rent, last month’s rent and a full month security deposit. If the owner has an issue with the unverifiable income you can
offer one or more additional months rents up front. Sometimes simply making the last month’s rent an
extra security deposit will help (ie: first month’s rent and 2 months security deposit).
2. Savings, pensions, 401K’s, etc. Customers may have enough savings as a financial cushion to cover several month’s rent. This may help an owner feel more secure in taking you on as a renter.
3. Guarantors or co-signors. This is a worst case scenario for most people. Not many are open to guaranteeing or co-signing for someone else’s lease. But it is more than acceptable by landlords in most cases.
All sources of income: Most renters don’t include all of their sources of income. You should include social security income, child support, alimony, interest income, student financial aid, etc.
Sometimes the verifiable portion is a small percentage of the overall income. If this is the case be sure to add this income even if it is unverifiable. This could mean the difference between getting the property or not.
Product knowledge is more important than ever due to the varying stricter renter requirements. We are hearing of renters losing hundreds of dollars in app fees when applying to different places. Rent 1 Sale 1 Realty offices compile the requirements of management companies, HOA’s and apartment communities to help customers avoid such losses. Feel free to call or visit the Rent 1 Sale 1 Realty office nearest you before searching or applying to a property for information on the renter requirements.
Dan Gallien – Rent 1 Sale 1 Realty President