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self employed income
by Anna (CA)
on October 8, 2015 @10:52
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How to verify income for self employed applicants?
How many months bank statement do you need?
Can they provide tax return or you need to get it from IRS?
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Re: self employed income
by Maggie
on October 8, 2015 @12:05
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Self employed applicants should be viewed as unemployed or at best part time employed and should be passed over for that reason. These are people who lack the income and credit to buy a house. These are the same reasons why you should not rent to them.
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Re: self employed income
by anon
on October 8, 2015 @14:49
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May I suggest you buy an on-line course in property management and also buy the book that comes with it. I do courses through a company called First Tuesday. They have all the CA Real Estate education courses. Buy Property Management through them and also read on-line the booklet CA Landlord Tenant Law (120 pages) from the state at www.dca.ca.gov/publications/landlordbook/index.shtml
These two will give you a solid starting education and decrease your worries.
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Re: self employed income
by MrDan (Georgia)
on October 8, 2015 @22:36
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A tax return will only show what the applicant made a year ago.
We request their annual 1099 (equivalent to W-2), certified copy of IRS-1040, and letter from accountant (preferably CPA) which should state nature of business and income holdings, annual income expected for current year, amount of annual personal income applicant takes from business, and bank references, credit report, etc.
You can do a quick search on line to your 'Secretary of State website' to see if they have a DBA or LLC/CORP filing and are in good standing. Or contact your county/city for any required business information. If they are a valid business they must be licensed in order to conduct it.
You can request last 3 months of personal bank statements (not business bank statements because the tenant's business is not signing the lease, the business owner - the person is signing the lease so you want to verify his personal income). If the business owner does not have a personal bank account in which he deposits personal income, than the business owner's income cannot be verify and therefore does not qualify to rent.
You can also require that the tenant be in business a minimum number of years (We require two years minimum)
Any combination of the above, plus a credit and background check should provide you with the information to make a sound rental decision.
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