Did you know that about 10% of tenants tell the truth about their income? That is definitely some shocking information… but with proper screening, we can cut down that percentage drastically.
If you are looking to rent out a property that you own to a potential tenant (hopefully an honest one) you will need to be able to verify their source of income and employment so you can trust that they will be able to pay you the agreed-upon rent amount consistently.
And not only do you want a tenant to be honest — you want them to be able to afford rent. So how can you ensure that they will be a responsible and reliable tenant? By verifying their employment status. And luckily enough, employment verification is easier to accomplish than you might think.
Request an employment verification form
The first step in starting your tenant/renter employment verification process should be to request an employment verification form from the potential renter themselves. This can be done by either calling the applicant or sending them an email.
It should be easy enough for them to fill out and only takes a few minutes of their time, but it will ask for information like their full name, current address, social security number, and position or title they hold at their current place of employment (if applicable), salary range, or rate of pay per hour/week/month, etc., and whether they have any criminal convictions on record with the FBI or another law enforcement agency.
You can also take an additional step in this process if you feel you need just a bit more concrete verification of their employment status. Take the initiative to call their listed place of employment and ask the HR department if they can confirm for you that your potential renting tenant does in fact work there. (1)
Request a pay stub
If your applicant is employed, you can request that they provide you with a few recent pay stubs as proof of their current employment status and salary or hourly pay rate. The number of months of pay stubs you ask for will depend on the length of the lease agreement made between you and the renter.
If you’re renting a one-year apartment, for example, a few months’ worth should be sufficient. However, if your potential tenant is planning on staying longer than one year, it’s probably best to request that they provide you with at least six months’ worth (or more) of pay stubs.
When requesting paystubs from renting applicants who are self-employed (for example freelance photographers), be sure to ask for a letter from their accountant or bookkeeper that confirms their income history in addition to copies of tax returns.
Request a letter from the employer
Another simple thing that you can do to verify the current employment status of the person that is applying to rent your property is to request a letter of employment from your prospective tenant from their current employer. This letter of employment verification should include:
- The name of the employer/company, address, phone number, and email address
- The current position held by your tenant in their place of employment
- The initial start date when they began working for their current employer (if applicable)
- The annualized salary/hourly rate that the employer pays the prospective tenant that is looking to rent your property
Conducting proper tenant screening is vital to protect your investment.
Taking the initiative with each potential tenant by having them verify their employment status truthfully and honestly can make the ultimate difference between having a trustworthy renter that doesn’t cause you any problems and having a disaster renter that causes you nothing but problems for you and your investment.
- Perform proper tenant screening to protect yourself and your investments.
- Conducting proper tenant screening is vital to protect your investments. There are a lot of risks associated with not doing adequate tenant screening and your financial security could be jeopardized if you take the risk of leasing to an unqualified person.
- On the other hand, by performing these thorough tenant screenings and verifying the employment of potential tenants, you can minimize these risks and provide peace of mind for yourself as well as knowing that your property is safe from harm. Get started today!
Hopefully, by this point, it should be readily apparent what the most important factors are to any employment verification process. If they can provide paystubs as well, then that is even better. With that said, there are definitely ways around everything we’ve outlined here. That’s just part of the game – after all, you’re trying to protect your property and your assets. But if you’re smart and diligent about how you do it, you’ll be in good shape.” (2)
Speaks from heart, always too passionate and driven by emotions. Spins the words with kindness & sharpness, intriguing your ever-inscrutable minds.