How to Verify a Tenants Financial Stability

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By GoldenWest Management

Finding great tenants is one thing, but how do you verify that those tenants are actually financially stable?

In this article, we will provide you with a list of documents you can request for verifying a potential tenant’s financial stability.

Request Copies Of Their Pay Stubs

All employer pay stubs will have a tenant’s pay begin and end date so you can easily figure out their income on a weekly, monthly, and annual basis.

After requesting copies of their pay stubs, you should also contact the employer personally and issue an employment verification request to confirm that the person who wants to rent your property actually still works there and continues to earn the income shown on their paycheck stubs.

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Ask for W2’s

Asking a prospective tenant to provide copies of their W2’s is especially helpful because it will show you how much income they have declared in the last year.

W2’s are also especially handy for verifying income if someone is self-employed.

Request Bank Statements

Besides asking for a prospective tenant’s paystubs, and W2’s, you should also be asking for their bank statements as well. They should be able to provide you with statements from at least the last two to three months.

File Form 4506 With the Internal Revenue Service

Another great way to verify a tenant’s financial stability is to file form 4506 with the IRS. This form will give you the ability to see a copy of a potential tenant’s tax returns if they are not able to provide you with a copy of their return themselves.

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Run A Credit Check

Besides following all of the tips offered in this blog post, the last thing that you should do is run a credit check. This will give you the ability to learn a tenant’s credit score, amount of debt that they may have, and give you a good idea if they’ve been able to fulfill their financial obligations.

Get Property Management Here

Tired of managing your rental properties yourself? Contact GoldenWest Management today by calling us at (866) 545-5303 or click here to connect with us through our website.

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