Proof of income is a critical tool that landlords use to determine whether or not a tenant can afford the rental property of their choosing. Without it, there is no way to be certain of a tenant’s ability to pay. Here are a few reasons why landlords view proof of income as essential, and what forms of proof of income can be provided.
To Ensure Steady Payments
Ultimately, landlords have to be sure that their tenants can make consistent payments. Otherwise, they will lose out on their investment. The last thing a landlord wants is to be forced to evict someone who cannot pay; discovering this advance will save both parties a great deal of trouble. It’s also worth noting that while a credit check can give a landlord a sense of the tenant’s financial habits, it doesn’t confirm that they’re making enough to be able to afford their new home. Unfortunately, there is no way to 100% guarantee a tenant will pay consistently, but proof of income is the best way to make a determination. Typically, a potential renter should be making three times the cost of their monthly rent.
To Know the Renter is Responsible
While ensuring timely payments is the chief reason a landlord will ask for proof of income, it’s not the only reason. When a landlord examines a tenant’s finances, they’re also looking to see whether or not the individual is dependable. The profession itself shouldn’t matter: the potential renter could be a self-employed artist, a retired widow, a businessman or a student. No matter the situation, proof of income shows that the person in question is consistently diligent and has what they need to support themselves. If a renter is responsible financially, they will most likely act responsibly when living in the property.
Types of Proof of Income
Landlords may ask for a few different forms of proof of income. These include:
- Pay stubs
- A letter from an employer
- An offer letter detailing the salary amount
- A tenant’s most recent tax return
- Social security or pension statements
- W2 or 1099 for freelancers
If a landlord decides a tenant does not have enough finances to cover monthly rental payments, there are still a few other avenues to explore. Can a co-signer vouch for them? Is there any other income a tenant forgot to report, such as gig work? Truthfully, a landlord wants to be able to take on new tenants, so they will do what they can and make suggestions along the way. However, proof of income is absolutely vital for landlords who need assurance that their tenants will make timely payments.
How All County Denver South Can Help
All County Denver South Property Management is here to help property owners have confidence in the quality of their tenants and the security of their property through knowledgeable and trustworthy property management services. From managing tenant relationships to lease enforcement, we look forward to working with you to see how your investment can be a long-term, stress-free asset. For a complimentary quote, call us today at (720) 664-4550.