Best strategies for screening Self employed applicants
Hi, new landlord question:
a self-employed painter applied to one of my properties. He submitted business bank statements, and they have several deposits every month, but about half of them made by ATM and the other half by Zelle. Totals come to 6K-11K/mo.
What do you do to screen Self employed applicants?
Most Popular Reply
@Vladimir Lukyanov, a couple thoughts:
1. Bank statements only tell you HALF the income story with a self employed person. They are grossly insufficient.
For example an UBER driver may show you deposits of $5k per month BUT that doesn't factor in the expenses like gas, maintenance etc. They might be spending $2000 on those items each month.
2. I require tax returns for self employed people. The tax returns show not only the income received but also expenses paid. Only after both of those are considered can you get the real gross income number that you want to use for screening purposes.
3. What if they don't claim all their income? A my mother would often say "tough toenails!" Trust what can be documented.
4. What if their income is inconsistent? Sometimes businesses and self employment have highs and lows. You may want multiple year of tax returns so that you can average out the income.