How To Show Proof Of Income Without Pay Stubs with Rentals

Whether you are the apartment owner or the renter, showing proof of income is something you will likely find a necessary topic to examine. Usually with a pay stub. But if you don’t have one, don’t fret! While pay stubs are often the most common, you have other options. How to show proof of income without pay stubs is important information, whether you are the renter or you are the landlord. Know your alternatives.

We know managing property can be difficult, while being a renter (especially a first-time renter or someone with unique income) can be equally as tricky. When it comes to Atlanta property management, we can help from both perspectives. Here we will explore the delicate waters of proof of income when renting a property, and hopefully dispel a few myths.

Let us jump in and explore these things:

• Why Proof of Income Matters – Let us make sure we know why rental properties ask for documentation and why it is important that tenants are ready and willing to provide them.
• Alternatives to Pay Stubs – What if a pay stub isn’t readily available? Let us get into the most common alternatives.
• For Landlords: How to Verify Proof of Income – For those renting apartments or other housing, how do you verify these alternative proofs of income?
• For Tenants: Preparing and Presenting Proof – Let us get into instructions on how to prepare and present these other forms of proof.

Why Proof of Income Matters

So why does someone need to show proof of income? Well, it is a process that benefits both landlords and potential tenants. For landlords, a tenant’s ability to pay is crucial to your bottom line. From the property owner’s perspective, proof of income helps confirm an applicant’s ability to afford the monthly rate. But understanding these affordability factors makes sense for the person renting as well since renters must be able to cover their monthly rent along with their other obligations.

Ultimately, renting a property, whether it be apartment or other type, is a solemn agreement between renter and landlord. It only makes sense that both sides feel comfortable in that transaction. And that’s what both sides want.

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The tricky part of this entire situation can come when there is no pay stub to be found. There are a lot of reasons this could be. So when a renter asks how to show proof of income without pay stubs, what do we say? Let us dive into some alternatives.

Alternative Ways to Show Proof of Income

While pay stubs are oftentimes the easiest source, it isn’t the only way! There are all sorts of reasons why a pay stub can be slightly more difficult than some other form of verification. Here are a few of the most common alternatives.

Self-employed Pay Stubs

What if you are self-employed? Right there, that could be a hurdle. Proof of income suddenly becomes something that isn’t immediately available to you. Well, self-employed pay stubs are a thing and can work. Traditional employees receive pay stubs from their places of work; self-employed people can generate their own pay stubs. This can still work to show proof of income for an apartment or other rental property.

A common or typical self-employed pay stub will probably include information such as name and contact information, information about the business like what they do and services they provide, income details, the person’s deductions, and their net income. You can find a number of resources online to create a pay stub, such as Gusto’s online payroll service.

Tax Returns

A very common alternative for proof of income is tax returns. If you’re a landlord, you might request the past two or three years, since they show a person’s income over a period of time. As a renter, you probably just want to ask the landlord to see what they require. These things can vary. But it is easy to see how this would be one of the most common alternatives to pay stubs, since it directly shows proof of income in a similar way.

Bank Statements

Bank statements are another commonly accepted proof of income. Similar to tax returns, they demonstrate a direct way of showing income. They can be provided over a period of months. For example, you can provide or request bank statements for the past three months or more. This helps prove to the landlord that income is consistent and there is a certain financial stability with the renter. That isn’t a bad thing, right?

1099 Forms

Another option for providing proof of income for rental apartments would be a 1099 form. These are issued for non-salaried earnings. They do provide documentation of annual income, but in many cases other forms of proof of income may be needed. Many landlords might require additional documents such as what is outlined in this list.

For Landlords: How to Verify These Proofs of Income

As a landlord, you want to do your due diligence with potential renters. You have a business to manage. But at the same time, you need to be understanding of different people’s circumstances. It is important to accept varied types of proof of income for apartments and other rental types, since you want to provide some flexibility. While at the same time it’s important to verify that these documents are valid. As much as most renters are legitimately showing valid documents (that’s a good thing!), it is important to note that rental application fraud is still something prevalent and something to be aware of.

So how can landlords verify records? Here are some tips.

Accept Multiple Types and Compare

One of the more common ways to verify income for rentals is to accept multiple types as described above, and then compare them. If a landlord can check to see that the income is consistent from multiple sources, this helps verify the information. In addition, when you accept multiple types there is more opportunity to look for things such as formatting or grammatical errors, inconsistencies or irregularities of other types, or illegibility or general unprofessional documentation. While fraud is rare, as a landlord you might go through this process often so the chances of it eventually happening becomes more likely as time passes.

Request Co-signer or Guarantor

Another thing to consider is, when the tenant’s income is uncertain or insufficient, requesting a co-signer or guarantor is an option. This 3rd party takes on the financial obligations of the tenant in the event they are unable to pay. Therefore, a co-signer or guarantor must be highly qualified to accept responsibility for their own bills as well as the potential liability of the lease. A common rule of thumb is that a co-signer or guarantor must show proof of income equal to six times the monthly rental rate.

Invest in Quality Support

Landlords can consider getting advice or assistance to help with screening rental applicants. For example, there are many automated rental screening services or software that can assist with everyday processes throughout your rental business. In addition, getting advice from a financial advisor or lawyer who is familiar with these topics is a great option if you are unfamiliar with tenant screening laws. But, screening tenants along with juggling all of your other responsibilities is daunting. That’s why savvy landlords choose to hire a qualified Atlanta property manager to take the guesswork out of tenant screening.

For Tenants: Preparing and Presenting Proof of Income

First and foremost, as a tenant, what you should do is communicate with your potential landlord. Especially when you’re asking yourself how to show proof of income without pay stubs or other common ways. Be honest and straightforward. Understand that they are verifying proof of income for valid reasons. Both sides likely want to get through the process as painlessly as possible. You want a rental property, and they want to rent to you.

So first, ask questions. What does the landlord require, and what are their alternatives? Many times this is formally requested in writing, so you can refer to that. If it isn’t clear, follow up with those questions in person and make sure the answers make sense to you.

Beyond that, give yourself time to acquire documentation. Sometimes banks and other institutions can be a little slow with requests. It has generally improved with digital documentation in recent years, but there are always situations in which it takes a little extra time. Also, provide additional documentation if you worry that one isn’t enough. If you have a good faith effort to provide proof of income for apartment or other rental property, your landlord is likely going to acknowledge that and work with you.

Consider Professional Property Management Services

Being a landlord requires a lot of daily oversight that quickly becomes a heavy load – and proof of income is just a small part of it. Trust us, we understand! For landlords, the screening process is a critical step. Get it wrong and you could find yourself with a tenant who refuses to pay, damages your property, or does not adhere to the lease terms.

By choosing to partner with the experts at Bay Property Management Group, we act as a bridge between you and your tenants. Our team of dedicated leasing agents and property managers are with you through every step of the process, helping you get the most from your rental investment. Interested in learning more? Contact us today for a free rental analysis and see how professional property management services can help!