If you’ve ever rented before, you know that your landlord will probably ask for proof of income. While every rental home and application process is different, it’s important to be prepared to provide proof of income if your landlord does ask for it.
If you find yourself in this situation, you may wonder why you’re being asked to provide this information to your landlord.
Here is everything you need to know before providing proof of income to your landlord:
Why do Landlords Ask for a Proof of Income?
Providing proof of income to your landlord prevents them from losing money on their investment property, and it saves them from having to potentially evict a Tennant in the future.
Your landlord knows that most people intend to keep up with their rent payments. However, keep in mind that they’ve probably had experience with at least one tenant who either fell behind on payments or struggled to keep up with the rent. So, when your landlord asks for proof of income, they only do to make sure that you can comfortably afford their rent.
What is the 3X Rule?
The 3X rule requires each tenant or renting household to make at least three times the rent amount. This ratio was created to ensure that each potential tenant could afford to keep up with their rent each month while still having enough money to pay bills, purchase groceries, and make other expenses.
Usually, when tenants make less than 3X their rent, they are more likely to struggle to pay rent or fall behind in payments. Some landlords enjoy using this rule as a precaution.
Examples of Proof of Income
Many people feel uncomfortable providing their proof of income to their landlord because they feel as though they are giving away too much of their personal information. Luckily, there are quite a few options that you can do to provide this information to your landlord.
Some individuals choose standard methods such as giving a W2 or 1099 forms, pay stubs, or a tax return. Others choose non-standard solutions, including an employment offer letter, employer verification, or a co-signer verification.
Why is it Important?
Your proof of income is important to your landlord because they want to make sure that you can comfortably rent their property. If you have any questions or are interested in top-quality property management services, contact AMG Property Management at 317-252-5830!