Tenant Rental Application - Documents to ask?

Question

Folks-

Hope you can help me, i have an application from a prospective tenant, the self-disclosure shows an adequate income-to-rent ratio, and the income source is from a business. The credit report and background check does not indicate any red flags.

How do we verify the income and other debts for someone running a business, as they wont have a paystub or W2?. They claim to have just sold a home and not able to find something to purchase quickly and hence looking to rent.

They have offered to pay for 6 months in advance, in lieu of lower rent.

Any red flags?

Nathan Gesner · Answer

If they are self employed, you can verify their income through tax returns. Ask for the last 2-3 years and at least three months of bank statements.

People generally offer to pay a year of rent in advance as a means of avoiding scrutiny. Yes, there are many people that are self-employed that just sold a house and can't find anything to buy. However, there are also a lot of scammers that use that story when it's not true. Trust, but verify.

Julie Hartman · Answer

@Balaji Srinivasan The offer of 6 months in advance is a red flag. People who don't want too many questions asked about their income offer to pay in advance. If they are self employed, I woulds ask to see at least 3 years worth tax returns and 4-6  months of bank statements. I would also check the real estate records in your county to verify the address they listed as their previous address actually belonged to them. If they own the business, check the Secretary of State for their business name and see if it tags back to them and if it is in good standing. Don't be afraid to ask a lot of questions if your gut is telling you something is off.