Self-Employed Potential Tenant

4 Replies

Hi all! First time landlord here. In short, I am in the process of screening a few prospective tenants. The first is self employed with variable income. Gross business income covers well over 3x rent, but the net take home (and personal tax returns gross) wouldn't cover monthly rent. The returns alone are not giving me a good gut feeling.

The second is a W-2 earner with steady income. I'd like to go with the second, though I told the first applicant that they were accepted, as long as I could verify their income.

I should also add that I met the first applicant in person and have talked to previous landlords. I really like them--this is the only thing holding me back!

1) I'm supposed to base my decision off gross income, correct? Is it different when the higher gross income is under their business name?

2) Is it allowable to decline them given my statement above and because someone else has higher, steadier income?

Any advice or guidance is much appreciated :)

If the first person can't cover the rent don't even consider them. You gave her a conditional acceptance which she did not meet. Be super thorough; check employment and past LL references. Credit history, BG and social media. Everything! All the best!

Originally posted by @Bjorn Ahlblad :

If the first person can't cover the rent don't even consider them. You gave her a conditional acceptance which she did not meet. Be super thorough; check employment and past LL references. Credit history, BG and social media. Everything! All the best!

Hi Bjorn,

I appreciate the info! I did all of the above and we met them in person. I really liked them, but the tax returns are the only thing holding me back. Their bank accounts are more than enough. I'm just worried that if I decline due to net income and not gross income, that I'll be doing something wrong.