How to verify income and job history for self employed tenant?

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I always require verification of income - pay stubs for employed, visual tax return inspection for self-employed, or bank statements if income comes from elsewhere. If they have good credit, that's it - I'll give them the benefit of the doubt. If credit is marginal, I'll ask for additional year tax returns, P&L statement, or whatever else makes sense. After that I'm either satisfied, satisfied with a larger up front payment, or decline the applicant.

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Income is one thing, expenses are another. I had one applicant that had around $7,000 in income each month and showed me several bank statements that highlighted that, but then I pointed out that the beginning balance in the account each month was around $100-$300 and the ending balance was around $100-$300. So in essence everything she was making, it went poof by the end of the month.

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Credit check, tax return, bank statements. Maybe ask to see the contract with Autonation. If it adds up I would go with him. As far as job stability goes... I prefer a business owner to employees that could be fired tomorrow.

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Some out of the box screening ideas: Does he have a business with a physical address? Drive by it if that's the case and even enter it with the excuse of "oh, I forgot to give you such and such form or whatever" and draw some conclusions of what you think. Is it a service business, meaning, no physical address? Then have someone of your trust call the business, put on speakerphone, and ask for services and listen how the services are presented. Either will tell you some idea of how the business is run, which is ultimately what will pay rent. Needless to say, personal references, tenant history (call previous landlords), all business and tax documents. And make sure that they seem appropriate for the type of business and not drawn up. If you know another professional who you trust in this business' industry, ask if the numbers seem to be ok. Ask an accountant of your trust as well if you need to. Hope some of these ideas help! Good luck!

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If you've got the luxury of time, I would have them fill out a form 4506 and get the copy directly from the IRS. It would be very easy for a person to mock up a tax return that shows better numbers than what they actually filed.Here's a link:IRS Form 4506 - request for transcript

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@Chris McDaniel First, tell him to show you the agreement as a proof of income. Just like investors ask for a purchase order from a company they invest in. Also, verify the agreement. Additionally....I lived one year outside the USA in 2013. When I came back, it was hard for me to rent any place for the obvious reasons, no income, no previous housing for a whole year. But I had savings though, so I paid Sic months in advance at my apartment complex where I lived. Could this be an option? If he sounds so committed to renting your place, and he's got all that cash, I don't see why he would refuse. Let's just say that a window tinting business doesn't have such a high cash turnover, so he won't be needing it all.What do you suspect of him?

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In retail finance, 2 year of complete tax returns is pretty standard VOI for self employed. Non-conforming lenders will sometimes demand an Income Statement if (like your situation), it's pushing year end or last years returns are not prepared. An Income Statement isn't all telling, but should at least clue you in on if they're running in the black or not. It's a better metric than a bank statement, IMO. Of course, he could just produce a fake P&L. You could ask for a certified income statement, but that may just make him find a different house to rent.How's his credit?

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Valid point. He mentioned he's got kids, is he paying college tuition, alimony, food, etc.? Better check those bank statements!

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Income Tax Returns

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"that was nearly a year ago and here we are about to roll over another year". Really? At that point does income verifications matter. According to you, he's paying his rent and paying it on time or else you would have said he wasnt. Call me sympathetic, but if you gave the guy a chance and he's proving worthy, then why not leave him alone since 'rent is only about the money?