Tenant sent me an application to rent my property:
- his income is $18K/year but the rent is $3.1K per month!
- but….tenant has a local business and said he doesn't pay himself much salary
- tenant is willing to pay 2 months deposit to move in
- credit is ok
Should I accept or deny? What document(s) from the business should I get?
With an income equal to 1/2 the rent, I would have to deny. Sure there may be a little more he can pay himself but he's not even close. I would be looking for income closer to $9k/mo. Save both of yourselves a lot of pain and wish him luck!
Nope! Next please!
More than likely his business is paying a lot of his expenses, which is not unusual for people that are self-employed. I would ask to see his last 2 years' business tax returns. His business may make a lot of money.
Clear reject, income must be 3x rent. The issue of money up front or a deposit of some kind is a red herring. What happens when this money runs out and you have a non paying tenant in possession of the property? Self employed people are very difficult to qualify, you should really be looking at prior year's tax returns. But this one is relatively clear: inadequate income.
I personally would not do that. As a business owner I understand both sides. On the other hand my protection from fair housing and putting good tenants into my houses are my criteria. Once you start violating and changing that you have broken your "bible".
If he has a local business then you should be able to check out the reputation of that business and determine if he has the means.
Also, asking for his taxes for the last couple years might be a good idea.
The other side of that coin, if he has a successful business and only pays himslef 18/K per year, he may soon have issues with the IRS.
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