One of the biggest mistakes that most landlords make when renting to new tenants is not verifying their income.
Sadly, this mistake can cost a landlord thousands of dollars in lost income and eviction costs that’s why it’s important for them to verify a potential tenants income by following these tips.
Confirm That They Meet The 3x Rule
The first thing to do when verifying a tenant’s income is to verify that they meet the 3x rule or earn three times the amount of rent.
You always want to make sure that your tenants meet the 3x rule because this will save you the costly mistake of renting to someone who suddenly cannot afford to pay their rent and you will also be able to avoid a potentially costly eviction as well.
To verify a potential tenant income, you should ask for the most recent paycheck stubs from their employer. If they are self-employed, you should ask them for their last bank statements and tax return from last year to confirm how much income they really earn.
Don’t Forget the Side Income!
In today’s world, just about everyone has a side income or “side hustle”. These sources of income can be anything from income earned from affiliate marketing online, consulting, sales or other work that they put their skills to good use.
For you to verify side income you will need to request proof of their income. This can be done by verifying deposits to their PayPal account or money that they received via direct deposit.
If after verifying income you’ve found that a potential tenant still doesn’t earn enough income, you should ask if they would be willing to add a co-signer to their lease because this age-old tactic will ensure that their co-signer will be able to pay the rent should the primary renter not be able to meet their financial responsibilities.
Contact Blackbird Realty and Management
To learn more tips for verifying income, or to speak with us about our property management services, contact us today by calling (702) 903-3556 or click here.