5 Steps to Verifying Tenant Income

Verifying tenant income and employment helps you better predict if your tenant will pay rent on time every month. When you’re verifying income the typical rule of thumb is to require income be 3x the price of rent. We recommend you take into consideration a tenant’s credit report and employment reference information as a whole to decide what level of income you are comfortable with accepting. 

Here are our 5 steps to verifying tenant income: 

#1 Use an Online Rental Application

An easy way for tenants to confirm their income is to have them upload a form of income verification to their rental application. The easiest way to do this is to require an online rental application so tenants can easily upload their w-2, pay stub, or an offer letter.

#2 Reach Out to Employers

On your rental application, you should ask for employment history and for employer contact information. This gives you an idea of a tenant’s work history and allows you to reach out to tenants’ employers. Once you have the employer information, we recommend reaching out via phone or email. If you call, you’ll get a faster reply and you can read his or her tone of voice over the phone. Contacting employers give you the opportunity to find out if the tenant is a responsible employee.

#3 Ask Employers Important Questions

Once you get ahold of an employer, here are the most important questions to ask:

• Can you confirm that [the tenant] has worked for you since [date of employment]?
• What does he or she do for the company?
• Can you verify that he or she makes [salary amount]?
• Is he or she a responsible employee?

You want to find out if the tenant is responsible at work. A responsible employee is likely also a responsible tenant. You want to make sure the tenant will likely keep his or her job throughout your rental term. Verifying income is only worthwhile if that tenant continues to have that income for all the months that he or she rents from you.

#4 Listen for Red Flags

It’s a red flag if the tenant lied about his or her company, position, salary, or dates of employment. You should also listen if the employer mentions anything negative about the tenant. For example, it’s a red flag if the tenant is frequently absent or if his or her work performance is sliding.

#5 Spot a Fake Reference

It’s also a red flag if the tenant leaves a fake reference. Pay close attention if the phone number is wrong or fake. It’s possible your tenant will put down a family member or friend. To spot someone pretending to be an employer reference, we recommend searching the employer’s name on Google and LinkedIn. Instead of asking the employer to confirm the dates of employment, you can ask, “How long has he or she worked with you?” That way, you can check if the information your tenant provided matches what the employer says.

Next Steps

Once you’ve reached out to a tenant’s employer, the next step is reaching out to a tenant’s prior landlords. Find out what questions to ask a tenant’s prior landlords and how you can require a tenant credit report and background check.