Verifying Tenant Employment and Income

By E-Renter Tenant Screening
Posted on March 1, 2009 under General | Be the First to Comment

As Landlord, You’re in Control
As a landlord, you know only too well that you cannot control your tenants’ behavior, or that of their guests.  You can’t control the occasional damaging wind storm or unexpected tree limb on the roof. But in the beginning, at least, of the landlord/tenant relationship, you are in complete control: as long as you comply with all applicable housing laws, you alone decide who is approved to rent your property. There are a number of factors you may use to decide whether to reject an applicant. Today we’ll look at employment and income.
 
Smart Landlords Verify
The rental application should contain the following information that you must confirm prior to approving the applicant: current and previous addresses, current and previous employment, income, Social Security and driver’s license numbers, plus personal and rental references. You can do this yourself or with a professional tenant screening service.

Verifying Employment and Income
You can simply call the employers listed on the rental application; however, many employers are hesitant or have policies against releasing information over the phone. You may need to request verification in writing. It’s not a bad idea to have this information in writing as a matter of procedure. You want to be sure your prospective tenant is currently employed, and has a reliable work history.

You can also ask the applicant to provide proof of employment and income, such as pay stubs.  Don’t neglect to verify these with the source of the income to be certain they have not been falsified—or even fabricated completely. For sales or commission-based income, review at least six months worth of paystubs, or have the applicant supply you a copy of their previous year’s tax return.  Ask for verification of any other sources of income to be used toward rent payments, such as child support or alimony.  If any stated income cannot be verified, you do not have to include it when determining minimum income requirements.

When to Be Suspicious
Be wary of business phone numbers supplied by the applicant if they don’t sound like legitimate businesses when you call. Likewise, be suspicious if the applicant insists you speak only to a certain person—they could be a real HR clerk, or they could be a friend who will supply false information. Certainly, legitimate businesses don’t always answer the phone properly, but let your intuition be your guide—it will tell you whether you need to dig a little further.

You should also be on guard if your prospective tenant has plenty of cash for security deposits and first month’s rent, but no verifiable sources of income.  If income is inconsistent with obvious spending patterns, be cautious. Cash without proof of income, or extreme spending on a low income could indicate illegal activity.  You don’t want to have problems down the road with either a tenant who can’t pay rent regularly or with criminal activity on your property.

Prescreen Tenants for Complete Peace of Mind
The best way to be sure you’re renting to a qualified tenant is to prescreen rental applicants. It’s easier than you think to do this online —plus, you’ll reduce your risk and your stress level!

Next Post: Checking Tenant Credit and Criminal History