I was wondering about tenant screening concerning income. I usually require 2.5-3 times the rent for monthly income. I also usually ask for the last three paycheck stubs, the last three bank statements, and a copy of last years W2s or tax returns.
How do you handle people who are self employed, have sporadic income or have an inaccurate sense of their income? I have an applicant who is pretty borderline.
Assuming the rest of their application is O.K. with regards to credit, references, etc. here are a few things to consider.
A person who is self employed can often be a better bet than one who is not depending on the longevity of their business, many self employed people have more cash, and are often able and willing to put up additional securtiy, and/ or pay several month’s rent in advance.
Sporadic incomer’s may be seasonally employed, on call, etc… Again, look to how long over time they have been working. Do they have a spouse, or other family member or roommate that they are renting with that is steadily employed?
Avoid people who have no clue of their income, and if you find a tenant you otherwise like but are weak in some areas of income on your requirements, ask them if someone who has good credit and income (i.e. parents, etc.) would be willing to co-sign the lease.
I like to see an income of 3 times the rent. I do not get tax returns or bank statements. Besides proof of income, my big emphasis in screening is criminal history; history of prior evictions; and history of suing people.