Screening-- include overtime hours?

[Linda S.]

Hi BP Community,

I just wanted to check in, and see what other landlords do with screening.   Our property is a duplex, and one side requires $675/month or 3x income is $2,025 minimum income.   A potential tenant recently got a new job 1 month ago, and her base pay is $1600/ 80 hrs,  but she has been doing a lot over time and her statement says $2400/110 hours.  It's December, may be seasonal...  Prior to this job, she only made $1800/month, and wouldn't be approved.      

So my question is, for those focusing on the lower income sector.... 

1) Do you include overtime in the screening process for your income/remt ratio?

2) How do you deal with "side jobs" where they get cash, and it's not reported?   I have another potential tenant that does tattoos on the side. 

Any other factors major things you look out for, as red flags or green flags would be helpful!  

Thanks! :)

~Linda

[Emily Beckmann]

We try and keep everything by "what goes on your taxes". So if they have moved jobs alot and I am unsure of potential income, we look at their last years tax return to prove they make money. As far as "side work" we generally do not count that as income. 

If you are a property manager, you could go to the owner and say"look we have this applicant that meets all other criteria, would you be willing to consider her?" If they say no...move-on. If they say yes....consider a double deposit, so the owner feels more comfortable if something were to go wrong.

Tenants that make three times the rent, have perfect credit, perfect job history and so-on can be rare....because they usually buy homes. I like to talk to my owners and let them know this, and it keeps the door open for situations like this where only one thing is slightly short, and can be made up with additional money upfront.