Tenant Screening - Income Verification
David Borden - June 12, 2015
Tenant Screening - Income/Employment Verification:
Verifying an applicant’s income can be challenging. A landlord usually needs a release to contact an applicant’s employer and get this information. Often the HR department can be very difficult to track down, and their call back rate is usually abysmal. This reality can prolong the screening process from seconds to days. Often applicants are self-employed, contractors, or even unemployed. Sometimes they give contact info of a friend that will fraudulently vouch for their income. That is why income verification is a secondary screening criteria used to partially offset an average or worse credit score.
It is perfectly acceptable to ask an applicant for proof of income when making a rental decision. Most applicants have an employer that provides them with periodic pay statements. If that is the case ask to see their most recent W-2’s to verify their income.
If an applicant is self-employed, or a contractor, ask them to provide recent bank statements and/or their most recent tax returns. Sometimes these are easy to fabricate, especially tax returns so beware.
What if an applicant is unemployed? This is a great question, and can usually be answered by the resident score. If an applicant has consistently demonstrated the ability to earn money and pay bills, they are still probably still a decent risk. In the event of unemployment it always a great idea to get extra financial consideration in the form or a higher security deposit, or pre-paid rent. The best way to offset poor credit, or sketchy income is always with additional financial consideration.