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Proof of income can be one of the most time-consuming parts of searching for an apartment. These documents prove you can financially support yourself and pay your rent on time, and they help you confirm that an apartment is within your budget. From bank statements and pay stubs to tax returns and benefits statements, tenants have several options.
Why Does Proof of Income Matter?
Landlords and property managers typically require potential tenants to provide evidence of their ability to pay rent. It ensures you can handle the monthly costs of living in a rental property and make timely payments.
Along with other necessary documentation like identification and references from previous landlords, providing proof of income gives landlords peace of mind that they’re dealing with reliable tenants who will take good care of their property. They won’t have to worry about you purposefully damaging the apartment while decorating the space or inviting over some friends.
In addition, having solid proof of income can give applicants an edge over other prospective renters who don’t have these documents handy. The more information available about a tenant’s finances allows landlords to quickly evaluate them based on criteria such as credit history or employment status, which is beneficial both for them and potential tenants looking for long-term housing arrangements.
5 Ways to Provide Proof of Your Income
Pay Stub
A pay stub is issued by an employer that includes gross wages, any deductions taken out for taxes or benefits, and the net amount of money received.
Obtaining a pay stub should be fairly easy if you’re employed full-time, as it’s likely already part of the payroll process. If you’re self-employed or work on a contract basis, other documents such as invoices or contracts can serve as proof of income.
Tax Return
Tax returns should include accurate records of all sources of income during the past year. When submitting a tax return, tenants should ensure that they include:
- The most recent tax filing documents from the prior year
- A copy of their W-2 forms
- Records of any other applicable income, such as freelance work or unemployment benefits
- Copies of any deductions taken throughout the year
Make sure all paperwork is in order before submitting it.
Employment Letter
An employment letter is a document signed by a tenant’s employer that outlines the person’s current wages and employment status. Remember that the landlord may contact your employer directly to verify this information.
If you’re self-employed, you may need to submit a profit and loss statement showing net revenue minus expenses over a certain period. Sometimes, the landlord might request copies of invoices sent to customers or contracts outlining services provided as additional proof that you are earning money through self-employment.
Benefits Statements
Benefits statements provide proof of income, such as from unemployment or workers’ compensation payments. This is useful for tenants who have difficulty providing other types of documents, such as pay stubs and tax forms.
Note that these benefits aren’t as stable as others, so you may have to provide additional documentation later. For example, if you’re receiving unemployment benefits, you’ll want to provide some of these other options once you get a job.
Bank Statement
A bank statement serves as proof of income for potential landlords, giving them an idea of how well you manage your money. It details deposits, withdrawals, and other transactions over a month or more.
A bank statement can also provide important information about your financial history, including:
- Your most recent transactions, including any payments made towards rent or utilities. This shows that you are financially responsible and have been paying all necessary bills on time.
- Your bank statement also records any large purchases in the last few months. This allows landlords to get an idea of whether or not their tenant’s spending habits are sustainable.
Prove Your Income, Get the Apartment
Having all the necessary documents to prove your income is an important step in applying for an apartment. With any of these documents, you can show that you are financially capable and ready to be a tenant. Collecting them may seem like a lot of work, but it’s worth taking the extra time to ensure everything is in order for the landlord’s screening—they could be what gets you the keys to your new home.
