Hello BiggerPockets Community!
How would I go about verifying the gross rental income that the seller's agent is claiming a property generates? Is it common practice for the purchaser to request proof of rental income from the seller? If so, what is considered to be valid proof of rental income? A copy of the fully executed lease(s) or bank statements highlighting the rental income or rent receipts or something else?
Thanks in advance BiggerPockets Community!
Ask for a P&L, balance sheet, and tax returns
Unless the information is being provided by a large management company, I wouldn't give much weight to anything the seller provides. You should base everything on your own analysis and pro-forma.
Originally posted by @Omer Sultan:
@Jeff Brown Thanks for your response!
@Andrew B. Even if the seller is able to provide those documents mentioned above?
Yes. I would always assume the seller was lying or hiding something. Don't get me wrong, I wont completely ignore everything provided. I would just give more weight to my personal analysis. I'm a conservative person by nature though.
@Andrew B. For sure. Taking a more conservative approach seems to be very popular here on BiggerPockets, and I definitely understand why!
You should consult with your own buying agent to determine if the rents are in line with what the seller is saying they are?