How do you verify income?

Question

Hello!

I'm a software engineer working on a tool that allows landlords to connect to the bank accounts of potential tenants to verify their income, employment, previous addresses, and their identity. I'm making a post here in an effort to understand how landlords are currently verifying the authenticity of tenant submitted bank statements, pay stubs, offer letters, and references? How can you determine if a tenant has submitted falsified documentation as part of your application process?

Nathan Gesner · Answer

Pay stubs, tax returns, bank statements showing balances/deposits, Letter of Hire, etc.

I process around 600 rental applications a year in my office. I wouldn't pay for software to verify income when I can do it for free in just a matter of minutes.

Kenneth Garrett · Answer

@Alaxic Smith

I agree with @Stephen J Davis you need to call, get tax returns, look up the company and see if there legitimate.  You can google the company or go on to the states website to confirm the company.  Don’t trust on line sources for everything.  On some things you need to confirm.  I use a third party source for credit and background checks, but it still requires me to confirm employment and previous landlords.

Stephen J Davis · Answer

You have to call the employer and talk to human resources. The prospect should sign that it is OK for you to do that. Be sure to call twice if it is a small company and make sure they didn't just have a friend pretend to be an employer. Remember to ask about "likelihood of continued employment." Some will not answer that but most will.

Bjorn Ahlblad · Answer

BTW paystubs (and other docs) can be bought on line for 9 bucks; any company name you want and any amount; all withholdings calculated correctly too. Always make that phone call and verify the number yourself.

Samantha Decker · Answer

@Alaxic Smith Hello Alaxic,

Great question! As a landlord, you know that verifying your prospective tenant's income before signing the lease is a crucial aspect of background screening and can play a huge role in business success. There are a few ways that you can verify your prospective tenant's income...Ask your prospective tenant to provide proof of income -- like a bank statement and recent paystub. In addition, it may be helpful to require that the applicant provides you with 2-3 employee references. That way you can conduct a quick phone call to ensure that the applicant's income and employment details are accurate.

In addition, you can use an Income Insights report, which is a report that analyzes income. Income Insights is a TransUnion SmartMove tool that uses data from the tenant's credit report to determine if their self-reported income is accurate. If it's not, then this may indicate that you need to ask for additional proof of income before signing the lease or move on to a new tenant.

I hope this helps and best of luck!

Sincerely,

Sam

Alaxic Smith · Answer

Interesting feedback. The landlord will be unable to see specific transactions, and only will be able to see deposits for the purpose of verifying their employment. I do understand not everyone gets paid via a bank account, but I believe the large majority of people do, or they cash their check and deposit it into an account of some sort.

Austin Mountain · Answer

Pay stubs, offer letter or bank statements.  I will follow up and call the employer if the pay stubs seem questionable.

Income level is honestly the least of my concern.  I care more about credit history, landlord references and background.  It doesn't matter how much someone makes if they don't care about their credit and don't pay their bills.

Joanne Eriaku · Answer

Not everyone gets paid through Bank account, I would obtain a letter of employment with salary stated and call HR to confirm. Landlord being in your bank accounts sounds a bit too off

Alaxic Smith · Answer

Interesting. Thanks for all the feedback. It's really helpful when thinking of ways to simplify this process for landlords as well as tenants.

Joe Cassandra · Answer

Call their boss. The way to do that is to make sure they give you their name, email (so it's a company email) and phone number. You can look up the name of the boss online to see who they are.

Just happened a couple days ago. Called boss, they told me all about the tenant, told me his job was safe because he's in software and makes about $X per month. Most bosses are happy to do that.

If they're self-employed, you need to look at their tax returns and recent bank statements.

Not sure tenants would want landlords 'connected' to their bank account. It feels like spying.