by Sarah Gabot
Who cares where a renter’s money comes from? All that matters is that you get paid, right?
This is a common mentality that property managers and landlords take when they’re searching for new residents. However, you should always take caution of a tenant’s income sources and incorporate income source verification into your tenant screening process.
Income verification is crucial, so do your best to not skip this step in the tenant screening process. Verifying a tenant’s income sources helps prevent illegal criminal activities from occurring in your property. How? People involved with drug dealing, prostitution and other illegal activities are still able to bring in money to pay rent. You don’t want this “dirty” money because it could also bring illegal activities into your rental property (and that causes tons of other problems).
Here are a few tips on how to verify a renter’s source of income:
Call employers using verified numbers
People can be tricky when it comes to giving references. They can easily tell a friend or family member to act as a previous landlord or an employer and instruct them to give false information. So when an applicant gives you an employer’s number to call, cross reference it with numbers you find online on the company’s website.
Create a strategic script for verification
When you’re calling references to verify income, don’t ask the person if they’re the employer. If they’re not truly the employer, you could have just told this person what role they’re to play: employer.
Write a script for employment verification that avoids saying something like, “Are you John’s employer?” Instead, you want to say, “What is your relationship to John?”
This is a great way to catch fake references.
For self-employed renters, get bank statements, tax returns and business licenses
When working with a self-employed renter, there’s a possibility that there aren’t any managers or supervisors to call. Therefore, verify that the renter is getting income through a legitimate business and is reporting income to the government. Do this by checking bank statements, previous tax returns and business licenses.
This article was written by Sarah Gabot and originally published on zillow
