Congratulations! You’ve found the perfect apartment! All you have to do now is apply!
Navigating the rental application process can be tricky, especially when trying to determine what counts as proof of income and what documents to provide your future landlord.
What is proof of income, anyway? Furthermore, what is proof of income for self-employed applicants? Let’s break it all down.
What is Proof of Income?
Property managers need to ensure that residents have the financial means to consistently pay rent in full and on time. Many management companies have some sort of income requirement. Proof of income is anything that shows the amount of money applicants earn or receive from other sources.
Providing proof of income can also be a good way for you—the future resident—to check in on your financial health and budget, making sure you’re not taking on more rent than you can afford. A good rule of thumb is to set aside 30% of your gross monthly income for rent.
What Counts as Proof of Income?
Every future resident’s financial circumstances are unique, so there are several ways to prove that you have consistent income. In many cases, a potential landlord will ask for a combination of documents as proof of income. Some of the most common documents include:
- Pay stubs: If you are paid by regular paycheck or direct deposit, you can use your recent pay stubs as proof of income.
- Tax returns: The previous year’s tax return can serve as proof of income. A 1040 details all the sources of income you earned the year prior, which is particularly useful if you have income from multiple sources.
- New hire letter: If you’ve recently started a job and don’t yet have paystubs, you can use your offer or new hire letter as income documentation.
- Unemployment documentation: Those currently unemployed and receiving federal or state unemployment benefits can count these payments as official income. Include your unemployment compensation with your application.
- Court-ordered payments: Contributions to monthly income can include settlement agreements, alimony payments, and child support. You will have received copies of the court orders detailing payment amounts and schedules. If you do not have them readily available, you can request a letter from the court detailing the agreements.
- Pension statement: If you are retired, your pension might make up a significant portion of your income. A 1099-R tax form can verify your pension distribution.
- Social Security award letter: Similarly, if you are retired or receive monthly Social Security payments, your award letter counts as proof of income.
- Worker’s Compensation or disability insurance statement: Anyone receiving Workers’ Compensation can list this as income on a rental application. You’ll just need to provide a copy of the documents showing how much you receive and how often you receive it.
What is Proof of Income for Self-Employed Applicants?
Self-employed? Don’t worry. There are several forms of income documentation you can use:
- 1099-MISC Tax Form: A 1099 shows what you’ve been paid by another entity. These can be combined as income documentation for independent contractors who receive income from multiple sources.
- 1040 Tax Form: If you have a certified accountant prepare your taxes or you file them online, you can provide last year’s 1040 as proof of income.
- Business Manifest: A business manifest showing what you pay yourself, plus a copy of your business license should do, as well.
Apartment Renting Success with Southern Management
Apartment income requirements are different depending on which management company you choose. At Southern Management, our financial counselors work with unique situations to determine your budget and how to fit rent into it. We can offer conditional leases that work for both you and the apartment community you’ll be renting from. A lack of income, bad credit, or an eviction on your record doesn’t mean we can’t help you find you a new place to call home.
To learn more about our application process and lease options, contact us today.