Real Estate Investor · Sterling Heights, MI · Member since 2009 · 71 posts · 14 votes
Merry Christmas to everyone!
I am in the process of renting out a home and want verify the income for this couple that applied for it. My question is: am I legally allowed to do that and how do I go about it? Do I call the employer and ask for the human resources department?
Employers will usually demand a signed relase to provide you the info. I'd recommend trying to have them fill out a 1005 / VOE. Modify the standard form to take Hud's name off it as well as anything suggesting it's for a loan. It looks professional and it asks all the right questions.
It depends on the employer. Unless there's some local law forbidding it, its legal. Some employers will give you answers with just a chat on the phone, some want to see a signature from then tenant (the signed application usually works), some want their own form.
I do try to independently verify the employer, rather than just relying on the info from the tenant. Someone could always give you a friends phone number.
Employers will usually demand a signed relase to provide you the info. I'd recommend trying to have them fill out a 1005 / VOE. Modify the standard form to take Hud's name off it as well as anything suggesting it's for a loan. It looks professional and it asks all the right questions.
Employers will usually demand a signed relase to provide you the info. I'd recommend trying to have them fill out a 1005 / VOE. Modify the standard form to take Hud's name off it as well as anything suggesting it's for a loan. It looks professional and it asks all the right questions.
If you get static, simply tell them you're underwriting their application similar to a loan.
There are also some free forms available on the THELPA website.
I started having them sign a release not only for the employment, but also for the rental references check, because I found out the large apartment complexes in my area won't release any information unless they have signed permission from the applicant.
I just had an employer that outsourced the employment verification part of their business. I was talking to their direct supervisor and they still made me call this number. Then they wanted $10 to just verify they worked there and another $5 I think it was to verify the exact salary.
I started to go through this process, but then I needed a PIN. Had to call my prospects, they were going to have set something up with their employer. Then I just said...You know what just let me look at your last 2 paystubs. So my advice is similar to Jonathan's - Ask for paystubs. Paystubs are nice they show, how much they make, year to date totals, verify social security number, etc.
Good luck with the December vacancy. I don't envy that...
1. A form specific for this, as suggested above, authorizing you to gather the info. With this form, a phone call, FAX or email might be enough to get the info. Or it might be outsourced to some operation like this one: The Work number, where you will need to be registered and have a PIN (as mentioned by a post above) AND you will need the employer's ID code.
2. Some number of pay stubs (at least one month's worth).
3. Income tax returns, and you will want to get the IRS form 4506T from the applicant to get the IRS transcript (to confirm the numbers weren't altered by a quick edit in TurboTax when you received your copy).
4. Bank statements showing deposits.
And there are other types of income that you can count: Social Security, pensions, SSI, child support, investment interest and dividends, and other forms of government assistance (plus many others that I can't recall off the top of my head now). For many of these, there will be a letter explaining the amount of benefit being received, and you can also check for the bank deposits.
I recently got to confirm a child support payment with an applicant by looking at the award letter and seeing the deposits through the applicant's smartphone pulling the online bank statements!
So there are many ways, just pick what suits the situation best.
1. A form specific for this, as suggested above, authorizing you to gather the info. With this form, a phone call, FAX or email might be enough to get the info. Or it might be outsourced to some operation like this one: The Work number, where you will need to be registered and have a PIN (as mentioned by a post above) AND you will need the employer's ID code.
2. Some number of pay stubs (at least one month's worth).
3. Income tax returns, and you will want to get the IRS form 4506T from the applicant to get the IRS transcript (to confirm the numbers weren't altered by a quick edit in TurboTax when you received your copy).
4. Bank statements showing deposits.
And there are other types of income that you can count: Social Security, pensions, SSI, child support, investment interest and dividends, and other forms of government assistance (plus many others that I can't recall off the top of my head now). For many of these, there will be a letter explaining the amount of benefit being received, and you can also check for the bank deposits.
I recently got to confirm a child support payment with an applicant by looking at the award letter and seeing the deposits through the applicant's smartphone pulling the online bank statements!
So there are many ways, just pick what suits the situation best.
I am renting for a while and I never saw landlord asking these many information. I was never asked to show paystubs, tax return or bank statement. If a landlord is asking me all these, I might go and look for another place to rent.
I didn't suggest to do ALL of those, I suggested that if one of those methods won't work, then try another.
If you want to rent one of my units, you WILL provide income verification, or you will start looking elsewhere. Sure, there are other landlords who don't request anything of an applicant - and they need to be lucky to find a good tenant; as opposed to those landlords who follow sound established practices, where it's not a matter of luck - it's the process that leads to finding good tenants.