When it comes to your rental property, it is essential to find good, quality tenants who pay the rent on time. Rent is your lifeline to generating income on your rental property. When you collect rent from your tenant, you are able to use that income to pay off your mortgage as well as gain cash flow that helps you achieve your financial goals.
To best assess if an applicant will be able to pay the rent on time, you need to request income documentation that helps you have a clearer picture of your applicant’s financial situation. “Before completing the renter application process, you should request appropriate income documentation from your applicant within 24 hours of submitting their application form,” recommends Karla Rivas, Senior Manager Asset Management. Rivas then adds, “By vetting your tenants like we do at HomeUnion®, you have a better chance of ensuring your rental property provides rent every month.”
At HomeUnion®, we’ve created thorough credentials for acceptable forms of income documentation that you can utilize.
- Paystubs – One consecutive month’s worth. If your applicant is paid:
– Monthly, they should submit 2
– Bi-weekly, they should submit 2
– Weekly, they should submit
- W-2’s from Employer
- 1099’s, if Self Employed
- 6 Consecutive and Current Month’s full Bank Statements (must-have detail with all transactions, not just a summary)
- Offer Letter from Employer – Must be current or for a job starting by move-in date
- Tax Return
- Social Security Disbursement Letter
- Child Support Order from Court
- Disability Disbursement
- Retirement Disbursement – Must provide disbursement letter showing monthly amount
- Income Verification from Employer – We must be able to call and verify the amount, or it must be notarized. Should be on company letterhead and signed by appropriate HR or company officer with their contact information provided
- Corporate Bank Statements (if owner of company), 6-months required
Once your applicant supplies the acceptable form of income documentation, you’ll need to verify that the gross income is 2.7 times the monthly rent you are requesting. For example, if rent is $1000, then gross income must be $2700 or higher. By setting a standard of 2.7 times, you are accounting for the tenant being able to pay monthly rent to you as well as pay for their other expenses like food, utilities, education, etc.
Additional Tenant Screening
Tenant screening involves many different components, and it’s in your best interest to vet tenants by following a standard procedure as well as following the Equal Housing Opportunity guidelines.
To help you develop your applicant procedure, here is additional application screening resource for you to look over:
Need More Assistance?
If you have questions, our Asset Management team is available to help. Please email email@example.com to get started.