How to deal with self-employed tenant

Question

I have rental applicant who is self-employed. He works as a freelance blog writer. I am not sure in the stability of this career. Anyone has any thoughts? Thanks!

Darius Ogloza · Answer

A W-2 employee could lose a job tomorrow.  You only have the past to go on.  How did he do in past years?  His 1040's will have the answer.

Waleep Alvi · Answer

@Mary M. just saw your comment. Thank you so much for sharing. Update, so far so good with the tenant, not having any problems at all.

Mary M. · Answer

fwiw, the self employed are a large part of this economy....  now more than ever.... also be aware that a tax return will give you part of the picture.....  bank statements, previous landlords, credit and back ground checks are all part of the picture.  Also remember than any tenant could move tomorrow. Nothing can prevent that.  And finally - before charging more than one months rent for deposit I would carefully check your local tenant/landlord laws.....  Many Jurisdictions have limits on what can be charged.

Waleep Alvi · Answer

So this prospect tenant submitted his 2 years of tax and bank statement and the number checks out. But just to be safe, I also asked for a landlord reference if they have one. waiting for the updated.

Anthony Wick · Answer

@Waleep Alvi

Require last two years tax returns, and the last 3 months bank statements. You’ll find your answer in the numbers.

Vanina Lopez · Answer

He must be a drug dealer, do a screening and check background, this kind of people have a lot of friends looking for to live in your house, in these times were you don't know how the law will be tomorrow....will be better don't rent and sell.

Don't give your house to anyone who you don't know their background and credit history. Charge him $60 and get a company run the background for you.

I have a bad experience renting with my last tenant refusing to pay me rent (blaming the COVID) and she wanted to be living in my house free of rent because the government allowed to her... now  I am out of business.

Kenneth Garrett · Answer

@Waleep Alvi

I have a tenant who is a self employed glazing contractor.  I reviewed his tax returns for the last two years and charged him 2x the security deposit.  He has been a great tenant for 4 years.

Randall Alan · Answer

Any time there is risk, you simply hedge that risk by charging more up front.  If you normally say we need first month's rent plus security deposit, you add last months rent.  If you already do first, last, and security, you add another month and write into your contract that you may post your first eviction notice if the tenant gets into their last month's rent, etc, so that you can have them out before you are out any money if their job doesn't pan out.  We would just say, "Hey, do to the nature of your job and the potential inconsistent income, we will need first, last and security deposit."

Randy

How to deal with self-employed tenant

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