Reasons Why Proof of Income Is Critical for Landlords
If you own rental properties in the Central Valley, or elsewhere in the United States, you know that proof of income is a critical piece of information to verify when screening tenants. Checking a tenant’s proof of income will protect you from losing money especially if a tenant suddenly cannot afford to pay their rent.
Verifying proof of income will also protect your financial best interests because it will also help you to avoid the costly hassle of eviction, this is why in this article; we will share with you several tips you can use for verifying proof of income.
Tip #1 – Make Sure They Meet The 3x Rule
The first thing to do when screening a new tenant is to make sure that they meet the 3x rule.
What does this mean?
For a potential tenant to rent from you, they should make three times the amount of rent that you plan on charging for your rental property.
Tip #2 – Don’t Rule Out Alternate Forms of Income
During 2020 most people these days earn alternate forms of income from commission-based jobs to affiliate income compared to tenants in years past that only worked at one primary job.
To verify a potential tenant income, you should ask to see their bank statements just so you can verify their deposits.
Besides asking for someone’s bank statements, you can also ask to see their tax returns from the prior year to confirm how much income they earned.
Tip #3 – What If A Potentially Great Tenant Doesn’t Earn Enough Income?
After screening a potentially great tenant you may find that they don’t earn enough income for you to rent the property to them. In these cases, you shouldn’t rule out these tenants all together especially if they would be willing to sign a lease with a co-signer. Some renters may be open to this option especially if it helps them to rent the home, apartment, or condo that they want.
Contact RPM Central Valley
For more information about the property management services, we can offer you, contact us today by calling (209) 572-2222 or connect with us online.