Landlords and property managers use various factors to determine your eligibility to rent an apartment, including credit scores, background checks, rental history, and more. One factor that can make or break your chances of getting approved for your dream apartment is your income. Whether you’re employed, self-employed, or unemployed, you’ll likely undergo an income verification process when applying for an apartment.
Why Do Landlords Verify Your Income?
Landlords want to know they can actually count on you to make your monthly rent payments, which is why they also check your credit score and may even ask for employment history. By requiring proof of income for apartment leases, they can make sure you make enough money to cover your rent every month.
How Much Do You Need to Make?
Budget-wise, it’s generally a good idea to keep your rent at 30% of your income or less. When it comes to proof of income for leases, most landlords will require you to make three times the rent — and sometimes even more than that! Figure out your monthly gross income (before taxes) and multiply it by three to get a good idea of which apartments might be in your price range.
How Do Landlords Verify Income?
Credit scores, criminal records, and rental histories are pretty straightforward. But how do apartments verify income — especially if you don’t have a traditional full-time job? There are a few different income verification documents you can provide, and the best option can vary depending on your employment status.
Income Verification If You’re Employed
If you have a regular job, proving your income should be fairly easy. Your last two pay stubs are the best option. They show how much you made in a certain pay period along with your year-to-date income. You can also use your W-2 or tax return from the previous year if you still have the same employer. If you recently started a new job or are having trouble getting the other documents, you can request an income verification letter from your employer when applying.
Income Verification Documents for the Self-Employed
Proving your income when you’re self-employed can be a bit trickier since you may not have the steady monthly income a standard 9-to-5 provides. There are a few documents you can send your potential landlord to prove you can afford rent, though. Similar to a full-time employee, you can use a tax return to show your income. This will give your landlord a ballpark figure of what you make in a year. You can also use bank statements to show the flow of income from clients or profit and loss statements if you own a business.
Proving Income When You’re Unemployed
If you’re unemployed, you might not have a source of income at all. However, if you receive unemployment benefits, you can request a benefits statement from your state’s unemployment office. The same goes for other benefits, such as social security or worker’s comp.
Without a reliable source of income, it may be difficult to get approved. Be aware of other options that can help, like adding a guarantor.
Turned Down? Find Flexible Rental Options With ApartmentSearch
Inadequate income is one of the most common reasons renters are rejected for apartments. If you don’t quite meet the income threshold, there are a few workarounds you can leverage to prove to your landlord that you’re lease-worthy. And if they’re not willing to consider you, there are plenty of more flexible rental properties you could call home. Take advantage of ApartmentSearch’s advanced filters to find an apartment that fits your income.
The post What Renters Should Know About Income Verification Process for Apartments appeared first on Apartment Life.