How to Handle Renting to Waiters?

8 Replies

How do you handle getting applicants from waiters/waitresses and other jobs that are partially/mainly paid in cash? It doesn't quite seem fair to completely exclude people who earn 3x rent but obviously can't substantiate this with paystubs. Yet we are running business and have qualifying criteria for a reason. How have other landlords been handling this sort of thing?

You can also verify the amount of time they work. If they are putting forty hours in at a nice restaurant it is safe to assume they’re bringing in decent funds. Tax records might help as well but I would really just want to know what restaurant it is and how many hours they work on average.

I screen based only on their actual pay checks. Tips, like applicants working on commission, do not count toward income since they are not consistent. Some one will rent to them but unless they qualify it will not be me since I never work at trying to qualify applicants.  

I am far more concerned about being paid than I am about being "fair" to applicants. 

@Louis Aller you can take a look at the past two years of tax returns, cash reserves in a bank account or across multiple accounts (ask for statements fro the past 90 days) as a way to mitigate risk in addition take a look at their actual credit report not just their score to view utilization rates, payment history etc. Lastly if your market can bear it perhaps you ask for a bit more of a security deposit. 

We ask for 3 consecutive bank statements that show the deposits. If they aren't putting it in the bank they probably aren't claiming it and paying taxes on it either. In that case we can't count it either.

The above suggestions are good.  I insist upon a double security deposit to mitigate any sporadic cash flow (never allowed to be used as rent, but covers me a bit more if there is a problem and we need to part ways).