Verifying Tenant Income and Employment: How-To Guide

Verifying tenant income and employment is an important step for landlords looking to rent to responsible and reliable tenants. It helps to ensure that potential tenants can afford the rent and that they haven’t left any jobs abruptly. Although confirming a tenant’s income and employment may seem like a daunting task, it doesn’t have to be. In this How-To Guide, we will go over the best ways to verify a tenant’s income and employment.

Why is Verifying Important?

Verifying a tenant’s income and employment is crucial for ensuring the tenant can afford the rental unit, as well as for consumer protection purposes. By verifying a tenant’s employment, you can get a sense of their reliability and history of job stability. It also serves as a way to ensure that someone hasn’t abruptly left a job and will not leave yours without warning.

How to Verify Income and Employment: Step-by-Step Guide

Verifying a tenant’s income and employment should always be done before signing a lease agreement. To get started, here is a step-by-step guide:

1. Ask for Employment and Income Verification Documents

The process starts with gathering some information from the tenant. Ask for proof of employment, which can be in the form of an employment verification letter from the current or former employer, or recently dated pay stubs. It is also a good idea to ask for proof of income from other sources, such as investments, rental property, disability, unemployment benefits, child support, social security income, etc.

2. Verify Documents and Check Accuracy

Next, you will need to verify the documents and check for accuracy. If the tenant has provided an employment verification letter, you should call the employer with the phone number provided on the letterhead to make sure the document is valid. You will also want to make sure the tenant’s salary listed on the verification letter matches the income on the other documents they have provided.

3. Contact the Employer and Ask Questions

Once the documents have been verified, you can contact the employer to ask questions. You will want to inquire about the tenant’s history of job stability, reliability, and performance. This will provide you with valuable information about the tenant’s character that will help you decide if they are a good fit for your rental unit.

4. Order A Credit Report

In addition to verifying income and employment, you may want to consider ordering a credit report. Ordering a credit report will provide you with a tenant’s credit score and credit history, which can be used to assess their financial responsibility.

5. Clarify Other Areas

You should also make sure to clarify other areas, such as their housing history. It is important to know if a potential tenant has a history of consistently paying rent and taking good care of rental properties. It is also a good idea to ask if they have any pets or roommates that will be living with them.

Conclusion

Verifying a tenant’s income and employment is a necessary step in order to ensure that a tenant can afford the rental unit and is reliable enough to stay for an extended period of time. By following the steps outlined in this How-To Guide, you can get the information you need to make an informed decision about a potential tenant.

How can I verify a tenant’s income without influencing their credit score?

1. Request recent pay stubs from the tenant to verify their income.

2. Ask the tenant to provide tax returns showing their income over the past two years.

3. Ask landlords to provide a reference for the tenant.

4. Request a letter from the tenant’s employer, indicating current or expected earnings.

5. Have the tenant provide bank statements to verify deposits to their account.

6. Have the tenant provide previous rent records to determine what they could afford.

What documents are typically needed in order to verify a tenant’s income?

1. W2 Form

2. Pay stubs

3. Bank Statements

4. Tax Returns

5. Employment Verification Letter

6. Proof of Government Assistance (if any)

7. Social Security Statement

8. Letter of Reference from Employer (if relevant)