How to verify income for self-employed? First time landlord needs help!
Member since 2011 · 9 posts · 2 votes
Hello, I am a newbie landlord and is wondering how to verify income for self-employed people? Tax return? Please advise!
I'm sure that there would be executive rentals and commercial properties where a business owner will provide last 2 years tax returns and current income statement. These should be gathered directly from the IRS or the accountant.
If there is a CPA, you could send a verification of income for the past two years, as a letter and have them fill in the blanks and sign it and mail it back to you, then follow up with a phone call to ensure they mailed it.
For smaller business folks, lawn care guys, construction etc. I can look at a credit report, last 6 months bank statements and credit card statements and see how they live. If there are lots of ATM withdrawls for $20 and charges for hamburgers, they are poor money managers. If I see charges at Judy's Bar 4 times a week, they have a problem.
I also ask for three business credit referrences and send an authorization to release credit information and follow up with a phone call. If the guy is in the lawn business and has a small acount at Joe's Lawn Mower Shop, that is probably not reported credit.
I also ask for a business card. Many printers in my area will verify the business before printing cards. A quick search on line to the Secretary of State tells me they have filled and are in good standing.
So your perspective tenant simply signs some verifications and authorizations and gives up some statements, not a big deal, if it is, you don't want them. Good luck
Thank you, TOM... That's what I've been saying! I'll happy to provide both my 1099k forms and my Bank and Credit card statements. Shouldn't that be enough?
Well, I'm not too sure if it is enough, but it is a great place to start. This can be a complicated check, and may need more research.
I have to say, I have never seen so many childish pathetic property owners all gathered in the same place. I have 17 properties and on average I have a 5% vacancy ratio and rarely ever in the last 12 years have I had a serious problem. For those of you just beginning, DO NOT listen to the advice you have read on this board! Use common sense and check past rental references, credit reports above 600, if self employed then find out more about their business. If you feel comfortable with the tenant and their story and they have 1st and last months rent and an equal amount of another months rent in their bank account then you will most likely have a great tenant. If they do not have quite enough for the deposit or last months rent then it is cause for concern but not always. Learn to work with the right people and you will thank yourself. I have a great relationship with my tenants and they stay longer than most since I treat them with the respect they deserve, it helps to be a good judge of character. If you follow the advise you have read on this board you may as well walk around with a stick up your A$$ the rets of your life and you will be as miserable a person as these jokers are. If you want to succeed, learn how to vet your tenants and don't let a good one get away. Just because they have better financials does not mean they will be your best tenants, in fact many of them will require MORE of you and they can be a nuisance. I am blown away by the greed I see here from the newbie property managers spewing this type of worthless destructive advice to others. Theirs is not the way to become a successful investor. Soo very pathetic.
I developed an account just to respond to this hypocritical nonsense that was posted 4 to 5 years ago. I am very disturbed by the requirements that the previous "so called" property owners called for. There is no law (other than what you decide to make up) that says that a person has to be employed by other people in order to be able to afford housing. Right down to checking a persons spending history? Automatically assuming that self-employed means unemployed? The same ENTREPRENEURS are publicly bashing and talking down against other ENTREPRENEURS. Its not the landlords job to delegate, judge, or DISCRIMINATE another persons life simply based on the job field they choose. Since we are judging decision making, why get into housing if you have reservations that everyone is out for a free hand? Hypocrites!
Simple and common sense management, if you are newbie property manager, owner, or landlord you ask for the typical requirements just as any other jobs that a potential tenant list, whether its been 1 month into the business or 20 years. Credit check, previous rental check, business license or articles of organization check, and 2 to 3 bank statements showing monthly deposits into whatever account they use for their business. I am a Public Educator and I own a Medical Management business on the side with degrees in both. I always list my personal business as my second income and provide verification that my business exist, client list, bank transactions of my pay in whatever form the landlord wants. I have never had an issue and I personally love to see their faces when they see I make 10 times more money then they do. Even with my income, I have not lost my heart as some of these hypocrites have.
I am very glad that I came across this post. People mark the names Jim Stardust, Bill Gulley, Rob Gillespie, Aly W (smart for not putting her last name), Ebere Okoye, and Mathew Paul. Never do business with them, because everything they are saying is contradictory to business ethics and may or may not be aligned with their state laws. I am bookmarking and using this as an example at my next business advising presentation for how not to develop and grow as a business leader. Thanks for the material and shedding light on horrible business practices across our nation.
Kevin Wang, you are a fool if you listen to these hypocrites.
When I have many applicants, I ask for w2 income. If they own a business I wont move forward as long as I have alternatives that have w2 income.
I'm pretty sure basing your decision on whether they have lots of ATM withdrawals for $20 and charges for hamburgers, is illegal in every jurisdiction of the U.S.A. You're their landlord, not their parent. Base your decisions on a fair and equal analysis as you would any W2 employee. One does not request tax returns or bank statements from W2 employees, nor should one request them from the self-employed. If you run a credit report on a W2 employee, then run one on the self-employed. Don't be someone who discriminates against the self-employed.
When I have many applicants, I ask for w2 income. If they own a business I wont move forward as long as I have alternatives that have w2 income.
Isn't that discrimination? Isn't that against the law in California?
I don't rent to self employed. I won't tell anybody, just a rule of mine
That's illegal in California, so you probably shouldn't tell us either.
California is first come first serve. If you have a applicant with w2 income contact you first nothing is wrong with your choice.
California is first come first serve. If you have a applicant with w2 income contact you first nothing is wrong with your choice.
If you don't rent to blue people, and claim that green people always come first, it is still discrimination and against the law. Whether you're caught or not, it's still unethical. And confessing on this website can be used as evidence against you in a court of law.
Don’t assume I discriminate against anyone.
Pretty sure "self employed" isn't a protected class of persons when it comes to housing discrimination. Otherwise, Fannie Mae wouldn't require us to in turn ask self employed people for a whole rash o crap that we don't ask W2 people for.
Speaking of Fannie, if you want to be equally as prudent as her go ahead and ask for a year of tax returns. Mortgage logic is that if they can't back up their stated income with tax returns where they effectively made similar/identical statements to the IRS then they are either lying to us (mortgage fraud), or lying to the IRS (tax fraud), and either way we don't want that business.
No reason you can't borrow that approach when qualifying tenant applicants.
To wit:
Take the net number on line 31 of Schedule C. Add to that number lines 12 and 13, and anything else that you believe are paper/fake/1-time-expenses. Divide by 12. We do a little more, but that's probably good enough for us here. There's your monthly gross income available to the tenant applicant after paying their business operating expenses. If that income doesn't cut it, ask them for reasonable proof that one or more of the expenses they wrote off were one-time expenses ("I got sued, first time ever, hence writing off $15k in legal and professional services on line 17" -- as a landlord, you should be sympathetic to this).
This is the same type of scrutiny that landlords get when they apply for another mortgage, but we look at Schedule E in that case. The same logic applies. Same for LLCs, and so on. You should be able to look at whatever form they declare their self employment income on, apply that same logic (find net number, add back 'paper' or mythical expenses, divide by 12) to get your answer.
Unless you want mortgage lenders to crap on you because you have a Schedule E in your tax returns, you shouldn't crap on self employed persons that report their income on Schedule C. You have in common with them that you're being entrepreneurial, and as a result it takes more than 15 seconds to understand both your and their income. Karma.
Pretty sure "self employed" isn't a protected class of persons when it comes to housing discrimination. Otherwise, Fannie Mae wouldn't require us to in turn ask self employed people for a whole rash o crap that we don't ask W2 people for.
Fannie Mae isn't renting housing under California law. I'm fairly certain discriminating against renters based solely on their [legitimate] occupation is illegal in the State of California.
3 months bank statements. Several lenders take that for auto loans. Why not for a lease?
If you ask it of ALL prospective renters, then no foul. But if you apply your rules unequally, you open yourself to a discrimination suit.
Don’t assume I discriminate against anyone.
I didn't assume anything. You said you don't rent to the self employed. That's discrimination.
Pretty sure "self employed" isn't a protected class of persons when it comes to housing discrimination. Otherwise, Fannie Mae wouldn't require us to in turn ask self employed people for a whole rash o crap that we don't ask W2 people for.
Fannie Mae isn't renting housing under California law. I'm fairly certain discriminating against renters based solely on their [legitimate] occupation is illegal in the State of California.
What, you want me to send a memo to Fannie Mae telling her that all her California loans to self-employed people are illegal?
I'm not a lawyer, but in general the equal housing type stuff applies the same to lenders as to landlords. If I can't discriminate based on X, odds are a landlord can't either, and vice versa.
So if I'm funding mortgage loans for women on maternity leave, landlords probably better damn well not be denying tenant applicants who are trying to upgrade their housing before the bun pops out of the oven.
In the other direction, if landlords are renting to LGBTQ love triangles because it would be illegal to say "no" based on LGBTQ love triangle status in California, I probably better damn well not be treating those mortgage applicants any differently either.
It's not housing discrimination to deny someone because they are unwilling or unable to adequately document their income. For self employed persons, that (IMO) means tax returns, but a landlord could certainly accept bank statements and have lower standards if they wish. Paystubs and stated income don't mean squat for self employed persons because that is not reliable 3rd party documentation.
Pretty sure "self employed" isn't a protected class of persons when it comes to housing discrimination. Otherwise, Fannie Mae wouldn't require us to in turn ask self employed people for a whole rash o crap that we don't ask W2 people for.
Fannie Mae isn't renting housing under California law. I'm fairly certain discriminating against renters based solely on their [legitimate] occupation is illegal in the State of California.
What, you want me to send a memo to Fannie Mae telling her that all her California loans to self-employed people are illegal?
I'm not a lawyer, but in general the equal housing type stuff applies the same to lenders as to landlords. If I can't discriminate based on X, odds are a landlord can't either, and vice versa.
So if I'm funding mortgage loans for women on maternity leave, landlords probably better damn well not be denying tenant applicants who are trying to upgrade their housing before the bun pops out of the oven.
In the other direction, if landlords are renting to LGBTQ love triangles because it would be illegal to say "no" based on LGBTQ love triangle status in California, I probably better damn well not be treating those mortgage applicants any differently either.
It's not housing discrimination to deny someone because they are unwilling or unable to adequately document their income. For self employed persons, that (IMO) means tax returns, but a landlord could certainly accept bank statements and have lower standards if they wish. Paystubs and stated income don't mean squat for self employed persons because that is not reliable 3rd party documentation.
Perhaps I wasn't clear. Fannie Mae UNDERWRITES LOANS under Federal lending laws. Landlords RENT HOUSING under California State landlord tenant laws. They are different laws (i.e., landlord tenant laws and lending laws), under different jurisdictions. California's discrimination protections in landlord tenant laws are different than the Federal Government's discrimination protections in lending laws.
Thus, Fannie Mae can discriminate in lending, under Federal lending laws, in ways that a landlord may not discriminate when renting housing, under California State landlord tenant laws.
... Base your decisions on a fair and equal analysis as you would any W2 employee. One does not request tax returns or bank statements from W2 employees, nor should one request them from the self-employed. If you run a credit report on a W2 employee, then run one on the self-employed. Don't be someone who discriminates against the self-employed.
So let's get back on topic for this thread - "how to verify income (for self employed)". So let's start with a W2 tenant - how do we check that person's income? We look at the W2 form (doh) and we request recent pay stubs to confirm income hasn't declined, and some of us even do an employment verification in addition to that.
So, how does the self-employed tenant provide those forms of proof? Oh yeah, that's right, they can't. So what are we supposed to do to qualify the self-employed tenant in a manner similar to what we subjected the W2 tenant to? Please tell us how - or otherwise we are then discriminating against the W2 tenant by having them comply with a proof of income.
Seems that the federal gov't entities have identified a way to assess the income of those who are self-employed (see post by @Chris M.), and using those methods certainly cannot be classified as discriminatory.
... Base your decisions on a fair and equal analysis as you would any W2 employee. One does not request tax returns or bank statements from W2 employees, nor should one request them from the self-employed. If you run a credit report on a W2 employee, then run one on the self-employed. Don't be someone who discriminates against the self-employed.
So let's get back on topic for this thread - "how to verify income (for self employed)". So let's start with a W2 tenant - how do we check that person's income? We look at the W2 form (doh) and we request recent pay stubs to confirm income hasn't declined, and some of us even do an employment verification in addition to that.
So, how does the self-employed tenant provide those forms of proof? Oh yeah, that's right, they can't. So what are we supposed to do to qualify the self-employed tenant in a manner similar to what we subjected the W2 tenant to? Please tell us how - or otherwise we are then discriminating against the W2 tenant by having them comply with a proof of income.
Seems that the federal gov't entities have identified a way to assess the income of those who are self-employed (see post by @Chris M.), and using those methods certainly cannot be classified as discriminatory.
Under California landlord tenant laws, all prospective tenants are to be treated equally. The question most courts are going to ask when adjudicating such a case is, "Was the inequality in treatment reasonable and necessary to serve the same purpose." The answer to this question will depend on the precedents set by previous courts in your jurisdiction. (You should find out what these are in your jurisdiction.)
If you only ask for a W2 from an employed person, but ask for bank statements and tax returns from a self-employed person, it's doubtful a court would find that equal treatment, or find that the extra burden was reasonable. (Remember, the reasonable test is not on whether it is reasonable to safeguard your income, but whether it is reasonable based on being equal to both prospective tenants.) However, if all you asked for was one year's tax return from the self-employed person, a court will likely find that an equal burden, of like documentation, to serve the same purpose was placed on both types of prospective tenants. The rule of thumb is to treat differently situated persons equally.
@Stephen C., you're actually viewing this backwards methinks.
In spite of what I said about self employed persons above and the focus on tax returns, probably 70% or so of them lie to the IRS when they do their taxes to save money. I'm not a hater at a personal level -- I get it.
Accepting bank statements in lieu of tax returns is HELPING them find a way to qualify for the unit, not hurting them. If means you can lie to the IRS to save money, and still qualify for a unit proportional to your actual income.
Tax returns is a higher standard that will on average be harder for a self employed person to qualify for.
Bank statements is a lower standard that's easy to qualify under.
It's not an "extra burden," it's more like "You probably commit tax fraud each and every year, but I'll rent to you anyways and look at your bank statements for the most recent quarter to qualify you. You are welcome."
I'm pretty sure basing your decision on whether they have lots of ATM withdrawals for $20 and charges for hamburgers, is illegal in every jurisdiction of the U.S.A. You're their landlord, not their parent. Base your decisions on a fair and equal analysis as you would any W2 employee. One does not request tax returns or bank statements from W2 employees, nor should one request them from the self-employed. If you run a credit report on a W2 employee, then run one on the self-employed. Don't be someone who discriminates against the self-employed.
Obviously you have no idea of what financial underwriting is nor the law, LOL.
I certainly don't discriminate, I treat everyone the same and it makes absolutely no difference if you have a W-2 or a K-1!
Sounds like you're a burned self employed type, whining about underwriting requirements, guess what sir, that's the way it's done, I've only done this a few thousand times, LOL.
You must be new to BP, my reputation is pretty much based on fair, honest and forthright dealing, if you read much you should be able to understand that philosophy.
Do you even have a clue who harps the most on this forum about legal compliance? Then I get some out house lawyer making a stupid statement like the one above, where are you from anyway?
Sorry, but your post just rubbed me the wrong way, I know it's out of ignorance but it was the delivery that struck a cord, why don't you do a little research on members here before you stick your foot in your mouth pointing your crooked finger.
Rattle your saber at me and you might end up sitting on it!
Just visited your hidden profile, are you ashamed of what you do or you just want to come in here as a troll type, don't have a clue, obviously you're no attorney telling people what is illegal.
Stupid doesn't work well here. This isn't your run of the mill real estate investor guru site. Allow me to suggest you read this site a bit and get familiar with folks who post here before throwing pies at folks.
Now, back on topic, underwriting self employed tenants or borrowers who most often fudge on tax returns, claim more income than is earned and always has an excuse for not earning enough to qualify (at least for the poorer end of the self employed). Welcome to BP! :)
I'm pretty sure basing your decision on whether they have lots of ATM withdrawals for $20 and charges for hamburgers, is illegal in every jurisdiction of the U.S.A. You're their landlord, not their parent. Base your decisions on a fair and equal analysis as you would any W2 employee. One does not request tax returns or bank statements from W2 employees, nor should one request them from the self-employed. If you run a credit report on a W2 employee, then run one on the self-employed. Don't be someone who discriminates against the self-employed.
Obviously you have no idea of what financial underwriting is nor the law, LOL.
I certainly don't discriminate, I treat everyone the same and it makes absolutely no difference if you have a W-2 or a K-1!
Sounds like you're a burned self employed type, whining about underwriting requirements, guess what sir, that's the way it's done, I've only done this a few thousand times, LOL.
You must be new to BP, my reputation is pretty much based on fair, honest and forthright dealing, if you read much you should be able to understand that philosophy.
Do you even have a clue who harps the most on this forum about legal compliance? Then I get some out house lawyer making a stupid statement like the one above, where are you from anyway?
Sorry, but your post just rubbed me the wrong way, I know it's out of ignorance but it was the delivery that struck a cord, why don't you do a little research on members here before you stick your foot in your mouth pointing your crooked finger.
Rattle your saber at me and you might end up sitting on it!
Just visited your hidden profile, are you ashamed of what you do or you just want to come in here as a troll type, don't have a clue, obviously you're no attorney telling people what is illegal.
Stupid doesn't work well here. This isn't your run of the mill real estate investor guru site. Allow me to suggest you read this site a bit and get familiar with folks who post here before throwing pies at folks.
Now, back on topic, underwriting self employed tenants or borrowers who most often fudge on tax returns, claim more income than is earned and always has an excuse for not earning enough to qualify (at least for the poorer end of the self employed). Welcome to BP! :)
I'm pretty sure if you stood before a judge and said you denied a self-employed person's application because you saw too many $20 ATM withdrawals and too many purchases for hamburgers, that a judge would not find that you were applying an equal test to both the self-employed and the employee applicants. (Sorry if my post ticked you off, but yours did the same to me. I don't like discrimination, even if the category is not protected.)
Yes, I'm new to BP. I've been lurking for a few months and these are my first comments. But I'm not new to business, investing or real estate. And no, for the record, I am not a burnt self employed person. I enjoy an upper middle class income and all the perks that come along with it. I'm not a troll and not ashamed of who I am. But I am private and don't believe in splashing personal information, willy nilly, on the Internet (I've been on the Internet since the 1970s, before it was even called the Internet). Members in my neck of the woods who know me will recognize my picture.
Thank you for your welcome to BP (no sarcasm intended). It's good to be here and I've been enjoying the forums. You may look forward to more sword sitting, I'm sure (sarcasm intended).
... Base your decisions on a fair and equal analysis as you would any W2 employee. One does not request tax returns or bank statements from W2 employees, nor should one request them from the self-employed. If you run a credit report on a W2 employee, then run one on the self-employed. Don't be someone who discriminates against the self-employed.
So let's get back on topic for this thread - "how to verify income (for self employed)". So let's start with a W2 tenant - how do we check that person's income? We look at the W2 form (doh) and we request recent pay stubs to confirm income hasn't declined, and some of us even do an employment verification in addition to that.
So, how does the self-employed tenant provide those forms of proof? Oh yeah, that's right, they can't. So what are we supposed to do to qualify the self-employed tenant in a manner similar to what we subjected the W2 tenant to? Please tell us how - or otherwise we are then discriminating against the W2 tenant by having them comply with a proof of income.
Seems that the federal gov't entities have identified a way to assess the income of those who are self-employed (see post by @Chris M.), and using those methods certainly cannot be classified as discriminatory.
...
If you only ask for a W2 from an employed person, but ask for bank statements and tax returns from a self-employed person, it's doubtful a court would find that equal treatment, or find that the extra burden was reasonable. (Remember, the reasonable test is not on whether it is reasonable to safeguard your income, but whether it is reasonable based on being equal to both prospective tenants.) However, if all you asked for was one year's tax return from the self-employed person, a court will likely find that an equal burden, of like documentation, to serve the same purpose was placed on both types of prospective tenants. The rule of thumb is to treat differently situated persons equally.
So, you really must not have read my former post, or did not pay close enough attention to it. I have a W2 person submit to not just examination of the W2; they supply the W2 (or a tax return that shows the W2 amount), recent pay stubs AND employment verification. So let's look at a self-employed type such as those who posted in this thread. They might or might not have some 1099 statements; whether they do or not the tax return will contain that information. So what is equivalent to recent pay stubs? The 1099 only comes once a year, and that is at the beginning of the NEXT year, so that won't be equivalent. Well, their income should flow into some bank account unless they are purely cash and never bank any of it - so requesting bank statements is probably as close to getting a gauge of recent income trend as we can expect to see. And as to employment verification - they might be on a long term placement at some employer so that might be doable in those cases, but that certainly would be a high expectation to meet.
So, please tell us how to properly obtain information from the self-employed that is actually equivalent to what I stated that I request of the W2 tenant. Just willy nilly throwing around the word "discriminate" just doesn't cut it.
... Base your decisions on a fair and equal analysis as you would any W2 employee. One does not request tax returns or bank statements from W2 employees, nor should one request them from the self-employed. If you run a credit report on a W2 employee, then run one on the self-employed. Don't be someone who discriminates against the self-employed.
So let's get back on topic for this thread - "how to verify income (for self employed)". So let's start with a W2 tenant - how do we check that person's income? We look at the W2 form (doh) and we request recent pay stubs to confirm income hasn't declined, and some of us even do an employment verification in addition to that.
So, how does the self-employed tenant provide those forms of proof? Oh yeah, that's right, they can't. So what are we supposed to do to qualify the self-employed tenant in a manner similar to what we subjected the W2 tenant to? Please tell us how - or otherwise we are then discriminating against the W2 tenant by having them comply with a proof of income.
Seems that the federal gov't entities have identified a way to assess the income of those who are self-employed (see post by @Chris M.), and using those methods certainly cannot be classified as discriminatory.
...
If you only ask for a W2 from an employed person, but ask for bank statements and tax returns from a self-employed person, it's doubtful a court would find that equal treatment, or find that the extra burden was reasonable. (Remember, the reasonable test is not on whether it is reasonable to safeguard your income, but whether it is reasonable based on being equal to both prospective tenants.) However, if all you asked for was one year's tax return from the self-employed person, a court will likely find that an equal burden, of like documentation, to serve the same purpose was placed on both types of prospective tenants. The rule of thumb is to treat differently situated persons equally.
So, you really must not have read my former post, or did not pay close enough attention to it. I have a W2 person submit to not just examination of the W2; they supply the W2 (or a tax return that shows the W2 amount), recent pay stubs AND employment verification. So let's look at a self-employed type such as those who posted in this thread. They might or might not have some 1099 statements; whether they do or not the tax return will contain that information. So what is equivalent to recent pay stubs? The 1099 only comes once a year, and that is at the beginning of the NEXT year, so that won't be equivalent. Well, their income should flow into some bank account unless they are purely cash and never bank any of it - so requesting bank statements is probably as close to getting a gauge of recent income trend as we can expect to see. And as to employment verification - they might be on a long term placement at some employer so that might be doable in those cases, but that certainly would be a high expectation to meet.
So, please tell us how to properly obtain information from the self-employed that is actually equivalent to what I stated that I request of the W2 tenant. Just willy nilly throwing around the word "discriminate" just doesn't cut it.
My objection to your post is contained in the statement that you saw too many $20 ATM withdrawals and too many purchases for hamburgers. You would not, I presume, have that information handy from a W2 applicant. Thus, making a judgement based on $20 ATM withdrawals and hamburger purchases would be treating the two applicants unequally.
Reviewing bank statements solely to determine income might be equal treatment. Combing through the self employed's bank statements to extrapolate personal behavioral habits is clearly not.
... Base your decisions on a fair and equal analysis as you would any W2 employee. One does not request tax returns or bank statements from W2 employees, nor should one request them from the self-employed. If you run a credit report on a W2 employee, then run one on the self-employed. Don't be someone who discriminates against the self-employed.
So let's get back on topic for this thread - "how to verify income (for self employed)". So let's start with a W2 tenant - how do we check that person's income? We look at the W2 form (doh) and we request recent pay stubs to confirm income hasn't declined, and some of us even do an employment verification in addition to that.
So, how does the self-employed tenant provide those forms of proof? Oh yeah, that's right, they can't. So what are we supposed to do to qualify the self-employed tenant in a manner similar to what we subjected the W2 tenant to? Please tell us how - or otherwise we are then discriminating against the W2 tenant by having them comply with a proof of income.
Seems that the federal gov't entities have identified a way to assess the income of those who are self-employed (see post by @Chris M.), and using those methods certainly cannot be classified as discriminatory.
...
If you only ask for a W2 from an employed person, but ask for bank statements and tax returns from a self-employed person, it's doubtful a court would find that equal treatment, or find that the extra burden was reasonable. (Remember, the reasonable test is not on whether it is reasonable to safeguard your income, but whether it is reasonable based on being equal to both prospective tenants.) However, if all you asked for was one year's tax return from the self-employed person, a court will likely find that an equal burden, of like documentation, to serve the same purpose was placed on both types of prospective tenants. The rule of thumb is to treat differently situated persons equally.
So, you really must not have read my former post, or did not pay close enough attention to it. I have a W2 person submit to not just examination of the W2; they supply the W2 (or a tax return that shows the W2 amount), recent pay stubs AND employment verification. So let's look at a self-employed type such as those who posted in this thread. They might or might not have some 1099 statements; whether they do or not the tax return will contain that information. So what is equivalent to recent pay stubs? The 1099 only comes once a year, and that is at the beginning of the NEXT year, so that won't be equivalent. Well, their income should flow into some bank account unless they are purely cash and never bank any of it - so requesting bank statements is probably as close to getting a gauge of recent income trend as we can expect to see. And as to employment verification - they might be on a long term placement at some employer so that might be doable in those cases, but that certainly would be a high expectation to meet.
So, please tell us how to properly obtain information from the self-employed that is actually equivalent to what I stated that I request of the W2 tenant. Just willy nilly throwing around the word "discriminate" just doesn't cut it.
My objection to your post is contained in the statement that you saw too many $20 ATM withdrawals and too many purchases for hamburgers. You would not, I presume, have that information handy from a W2 applicant. Thus, making a judgement based on $20 ATM withdrawals and hamburger purchases would be treating the two applicants unequally.
Reviewing bank statements solely to determine income might be equal treatment. Combing through the self employed's bank statements to extrapolate personal behavioral habits is clearly not.
There you go - proof that Stephen C. did NOT read what I had written; somebody else wrote that they look at $20 withdrawals - it was not me. And didn't even answer the specific question that was directed to him, instead diverting the discussion (to statements I had not even made). That sort of behavior IMO shows he is here to TROLL.
So why don't you truly read what I wrote, and reply with answers that actually cover what I asked of you.