Proof Of Income – Learn More About Why It’s Critical That You Require It

If you own rental properties, one of the most important things you can do is require proof of income from your tenants because, it’s what’s going to let you know if a tenant is really qualified to live in your rental property and will be able to pay their rent on time on a monthly basis or not.

Why You Need Proof of Income

Checking proof of income protects you from losing money and your tenant from eviction, if they suddenly can’t afford rent.

Let’s step back for a minute and acknowledge that most tenants don’t purposely fail to pay rent. Nor do they go into a rental agreement with the intent of living there for free.

But having proof of a steady income that is appropriate for the rent you charge can reduce risk to both you and your tenant. After all, evicting a tenant is not ideal and can cost you thousands.

Determine if the 3x Income Rule Is Met

When asking for proof of income for apartment rentals, you’re not just verifying a stable source of money. You’re also figuring out if your potential tenant can meet the 3x Income rule. Generally, you want to take tenants only if their gross yearly income is three times the rent you’re charging.

Of course, you can make exceptions to this rule, for example, if your potential renter has good credit, a steady work history, or if they have a cosigner.

For many potential renters you just need to look at a few pay stubs, but with retirees (who are renting more and more), students, and those without your typical salaried job, for instance, you may have to find other ways to verify their income.

The rise of the gig economy may also affect how you determine appropriate income. The Bureau of Labor Statistics estimated that about 10 percent of the U.S. population had “alternative work arrangements” in 2017. Still others supplement their traditional income with side gig companies like Uber or Upwork.

Verify Income for Potential Renters Without a Traditional Salary

You should verify income for all renters, but it’s especially important for potential renters who don’t have your typical 9-to-5. Let’s take a look at a few of those categories.

Self-Employed: Tenants who own their own business won’t have a pay stub or an employer to call. You’ll have to find other ways to verify their income and ensure that it’s steady.

Cash-Only Employees: Like the self-employed, there won’t be a paper trail for these renters. And a lot of them don’t know how to show proof of income, which makes it difficult for them to rent. This group includes waitstaff, landscaping employees, yoga instructors, artists and master crafts people as well as childcare workers. You will, however, most likely have an employer you can call or email.

Commission-Based Employees: Sales reps and retail employees may be working on commission or through incentive plans. While you probably ask to see two pay stubs for salaried renters, you may want to see a yearly statement of income to determine if a renter that works on commission is making enough.

Retirees: Retirees will have other types of income you can check: social security, retirement accounts, and pensions.

Students: Student renters will almost always need a cosigner. In that case, you’ll want to check proof of income for the cosigner, as well.

Ways to Determine Proof of Income

Whether they’re students, retirees, gig workers or have a salaried job, you still need to ask for documentation. Here are the best ways to do that.

  1. Pay Stub: Salaried and freelance workers who have filed W9s can provide pay stubs. For freelancers, however, a few pay stubs aren’t likely to give you the whole picture. You’ll need more verification.
  2. Employer Verification: A letter, email, or phone call from an employer can help you get a clear picture of finances. This is particularly helpful for potential renters who work on a cash-only basis.
  3. W2 or 1099: A W2 indicates exactly how much a salaried employee made over the past year. If they plan to keep that job, you’ll know whether or not they meet your requirements. A 1099 for a freelancer will give you the same information, but income for the coming years may vary.
  4. Offer Letter: If your potential tenant just changed jobs, ask for a copy of their offer letter. It should state their salary.
  5. Tax Return: Like W2s and 1099s, a tax return will tell you what someone made the previous year. It will be up to you to determine whether their job or other circumstances have changed since then.
  6. Retirement, Social Security or Pension Distribution Statement: For retirees, a distribution statement from social security, a retirement fund or a pension fund will verify income. You may need a combination or all three of these to get a clear picture of their finances.

Insufficient Funds Isn’t the End

If your potential tenant doesn’t meet your income criteria at first blush, don’t decline them right away. If everything else checks out and they seem like a good fit, there may be other ways to bring them on as tenants.

First of all, did you consider all of their means of income? For retirees, did you collect statements from all retirement accounts? For salaried employees, did you consider their side gigs?

Go back and ask them if they have any other sources that they didn’t consider including. If these are steady sources that they plan on keeping, you’re absolutely right to include them as part of their gross income.

And if their income still doesn’t add up, ask them if they would consider finding a cosigner. A lot of landlords require this for students, and it’s usually a parent or guardian. But other renters might be open to the idea, as well.

Proof of income is critical in protecting yourself and your renters. Still, you don’t have to keep to a hard-and-fast rule in determining who’s in and who’s out. Look at all the information in front of you, and use it to make a well-informed decision in the best interests of you and your tenants.

Get Property Management Here

Do you need full service property management for your Houston area rental properties? If so, contact Vestpro Residential services by calling us at (832) 971-1841 or click here to connect with us online.

Planning on Hiring A Humble Texas Property Manager In 2019? Click Here

Do you own one or more Humble Texas rental properties? If so, one of the best things you can do in 2019 is hire a property manager.

Learn More About Why You Should Hire A Property Manager

On the off chance that you own investment property, you deserve to have our Humble Texas Property Management service professionally manage your rental property for you.

Our property administration group will make dealing with your investment property simple. You can depend on us to offer you the following services: 

Tenant Selection

Tenant Placement

Rent Collection

Customer Service

Maintenance

Repairs

We Make Owning Rental Property Hassle Free!

Envision not taking calls from occupants again around evening time, or weekends. With our Humble Texas Property Management group, you can depend on us to be there for you, professionally dealing with your investment property and getting you the most ROI conceivable.

Enlisting a property management company costs significantly less than what you think! Besides being reasonable, our Humble Texas Property Management cost is equal to the cost of one Starbucks Coffee per every day.

Reasonable, Reliable and Trustworthy Property Management

Some property managers in the Humble Texas Area are not solid or dependable, they will take your cash and not furnish you with any genuine property management services. 

Thankfully, with our Humble Texas Property Management Service, you can depend on us to do what we say and provide you with the best property management services possible.

Owning an investment property will never be tedious again or a pain! Give us a chance to show you how we will simplify your life with our professional property management services.

GET HUMBLE TEXAS PROPERTY MANAGEMENT

For affordable Humble Texas Property Management contact Vestpro Residential Services today by calling us at (832) 971-1841 or connect with us through our site.

Tips for Turning Around a Problem Humble Texas Rental Property

By Vestpro Residential Services

Do you own a Humble Texas Rental Property that’s consistently been a problem for you? The problems can be anything from repairs, tenant complaints or problems with tenants who consistently pay their rent late.

Regardless of the reason, these are problems that make owning rental property a headache for anyone but the good news is that you can turn around that problem rental by following these simple tips.

Tip 1 – Check the Property for Needed Repairs

Does the property need repairs inside or outside?

Start with improving the curb appeal of your Humble Texas Rental Property then move to the inside of the home and focus on improving areas of your rental property like flooring, cabinetry, and lighting.

It may be that your rental property needs a good renovation and can be improved in one weekend by painting, refinishing the cabinetry and replacing an old tile or vinyl flooring to update its look.

Tip 2 – Review Your Reputation Online

Another effective solution for dealing with a problem property is to check your reputation online to see exactly what tenants may be saying about you or your rental property.

Tip 3 – Deal with Your Bug Problem NOW

Have your tenants complained about a bug problem at your Humble Texas Rental Property? If so, you should deal with this bug problem today because bugs can pose a health risk to tenants and a bug problem could also cause a tenant to move because they classify your rental as not being habitable.

Tip 4 – Improve Your Tenant Screening

Last of all, but most important, you should improve your tenant screening process including reviewing a tenant: credit history, work history, background and personal references.

A recent study by TransUnion shows us that residential evictions have reached a 5-year low point and this is thanks in large part to tenants having better control over their finances compared to years ago so there’s no reason to not have financially stable tenants for your rental property.

Get Property Management for Your Humble Texas Rental Property

For professional property management for your Humble Texas Rental Property contact Vestpro Residential Services by calling us at (832) 498-0016 or click here to connect with us online.

Humble Texas Property Manager – Why Property Management Saves Time and Money

By Vestpro Residential

Are you thinking about hiring a Humble Texas Property Manager but aren’t sure if that’s the right decision to make? If so, you’ve come to the right place! In this article, we will share with you the top ways an experienced property manager will save you time and money.

#1 – Tenant Screening

An experienced Humble Texas Property Manager will save you the time, money and hassle of searching for and screening tenants yourself. Our experienced team of property management professionals will ensure that the tenants we choose have been checked thoroughly via a background check, credit check, job verification and more so you can have the fullest confidence in knowing that the best tenants are living in your rental property.

#2 – Customer Service

Once we’ve screened and found the right tenant for your rental property your Humble Texas Property Manager will provide the best customer service and support for the tenants who are living in your rental property so that they will always have someone to call when they need assistance instead of calling you.

#3 – Rent Collection

As your experienced Humble Texas Property Manager, we will also save you time and money when it comes to rent collection so you will never have to deal with the hassle of collecting rent yourself or dealing with tenants who don’t pay you on time.

#4 – Decrease Tenant Turnover

Another huge benefit that comes from hiring a Humble Texas Property manager is that we will decrease turnover at your rental property because when tenants have someone who they can call for problems, issues or concerns at the rental they are more likely to feel that their needs are being taken care of and will feel less inclined to search for a rental property elsewhere.

Contact a Humble Texas Property Manager

To learn more about our Humble Texas Property Manager contact us today by calling (832) 971-1841 or click here to connect with us online.