You find your dream condo or house to rent. There’s only one snag. Before you can go any further, you need to provide proof of income.
It’s pretty reasonable – the landlord needs to check you can afford it. But it can be confusing to know exactly what to provide to meet this requirement. We’re here to help with some proof of income examples.
Read on for exactly what you need to provide proof of income.
What Is Proof of Income?
Proof of income is documentary evidence to show how much you earn. There are different requirements if you are employed or self-employed. Landlords are looking to see whether you can afford to rent their property.
How much rent is affordable? A good rule of thumb that has been recommended for decades is no more than 30% of your gross income should go on rent.
Proof of Income – Employed People
For an employed person, pay stubs are your simplest form of proof of income. They are given to you every payment period, usually monthly, by your employer.
It’s good practice to keep at least one year of paystubs. The fact is that many people don’t and then run into trouble when it comes to renting an apartment. If you have lost or just don’t have them, there is another way to get them.
This is by using a paystub generator. You’ll need all the details of your employment to hand. Simply enter the details accurately and honestly, and you can legally generate replacement pay stubs that you can use as proof of income.
Proof of Income Letter
An alternative to pay stubs is an income verification letter. Your employer can complete this to verify your annual income. There are templates available online to help you to include all the relevant information.
Proof of Income – Self-Employed People
Are you a contractor receiving income from lots of different sources? A good route for you would be using the 1099-MISC Tax Form. Your previous year’s federal tax return is also a good proof of income as it combines your entire earnings for the last year.
Ask your accountant for a copy of your 1040 tax return and submit this as proof of income.
Other Types of Proof of Income
Not all income comes from work. You may have unemployment payment documentation, pension statements, social security benefits letters, and interest statements.
The important thing is to have official documentation to prove all sources of income. This builds trust with your potential landlord that you are a safe bet for renting a house or apartment.
Don’t Miss Out on Your Dream Rental!
Nobody wants to miss out on their dream rental because they can’t provide proof of income! Use the 30% rule to know how much you can afford. Prepare these documents before you start your property search.
Follow these guidelines, and you should have no trouble securing a great home for the future.
Looking for more up-to-date advice on real estate and business? Check out the rest of our blog for informative articles just like this!