Laurie4b Posted June 22, 2017 Share Posted June 22, 2017 We have a vacant apt. A young engaged couple (not long out of college) want to rent it and she'll move in first, then he will following the wedding. Trouble is, both are moving from their parents' homes. She just started work at a relatively low wage and he's self-employed and has issues about not wanting to provide a tax return, even with social security number blacked out. He is okay with credit check, but there is not going to be much on there. We're checking references, but my gut is that it is too risky without proof of steady income and we should ask for a co-signer even if all the references are good. Do you agree or are we being too cautious? 1 Quote Link to comment Share on other sites More sharing options...
idnib Posted June 22, 2017 Share Posted June 22, 2017 I agree with you. Go with your gut. I am all for helping out young couples just getting started, and I can even sympathize with not wanting to provide a tax return, but if the husband is unwilling to verify income in some way, I wouldn't go for it. Perhaps he can provide bank account statements showing deposits of income? Otherwise I would decline without a co-signer. 3 Quote Link to comment Share on other sites More sharing options...
Annie G Posted June 22, 2017 Share Posted June 22, 2017 Would they agree to an additional deposit of a month's rent? That way if they fall behind you have a little bit of money as backup. 1 Quote Link to comment Share on other sites More sharing options...
eternalsummer Posted June 22, 2017 Share Posted June 22, 2017 They may be completely willing to get their parents to cosign. 2 Quote Link to comment Share on other sites More sharing options...
JFSinIL Posted June 22, 2017 Share Posted June 22, 2017 (edited) Would either of their parents co-sign to guarantee you get paid each month? We did that for our one dd and her first apartment, and just did again for second dd (she and another college junior are sharing a townhome near campus). Obviously we are able to cover the rent if need be. Edited June 22, 2017 by JFSinIL 1 Quote Link to comment Share on other sites More sharing options...
vonfirmath Posted June 22, 2017 Share Posted June 22, 2017 The one time I rented without proof of income (We had just moved to the area) I voluntarily provided proof of significant savings in an account to help cover the rent as we looked for work and volunteered to pay extra security up front (which luckily they did not take me up on because they had changed hands by the time we moved out and the records kept were bad enough I'm not sure we'd have gotten the extra security back) 1 Quote Link to comment Share on other sites More sharing options...
Wilma Posted June 22, 2017 Share Posted June 22, 2017 I wouldn't rent to them without some sort of back up plan (parental cosigning, proof of significant savings, etc.). I'm really nice, but still wouldn't go for it. 3 Quote Link to comment Share on other sites More sharing options...
solascriptura Posted June 22, 2017 Share Posted June 22, 2017 I wouldn't rent to them. Of course, you may feel compassionate towards their situation and rent to them anyway. Be aware that their income isn't adequate and may struggle to pay the rent on time. 1 Quote Link to comment Share on other sites More sharing options...
Hannah Posted June 22, 2017 Share Posted June 22, 2017 It makes business sense to ask for a co-signature. 2 Quote Link to comment Share on other sites More sharing options...
Laurie4b Posted June 22, 2017 Author Share Posted June 22, 2017 I agree with you. Go with your gut. I am all for helping out young couples just getting started, and I can even sympathize with not wanting to provide a tax return, but if the husband is unwilling to verify income in some way, I wouldn't go for it. Perhaps he can provide bank account statements showing deposits of income? Otherwise I would decline without a co-signer. Can you help me understand that? Normally, we'd call an employer and verify income, but the only way to know the net income is by tax return if he's self-employed. I don't really get it since we're saying he can black out social security income. Quote Link to comment Share on other sites More sharing options...
Calm37 Posted June 22, 2017 Share Posted June 22, 2017 Can you help me understand that? Normally, we'd call an employer and verify income, but the only way to know the net income is by tax return if he's self-employed. I don't really get it since we're saying he can black out social security income. "Self-employed" is a loosely used term around here. It in no way means that the income earned is being properly reported to the IRS. 4 Quote Link to comment Share on other sites More sharing options...
Laurie4b Posted June 22, 2017 Author Share Posted June 22, 2017 "Self-employed" is a loosely used term around here. It in no way means that the income earned is being properly reported to the IRS. Yeah, I don't know if that is the issue or not. Earning money under the table is one explanation that has certainly occurred to me. Quote Link to comment Share on other sites More sharing options...
Cinder Posted June 22, 2017 Share Posted June 22, 2017 My friend owns several rentals and she absolutely refuses to rent to anyone who can't show they have income that is at least four times the rent price. She says in her experience it just doesn't work well to compromise on this. When ds and his friend rented their first apartment both had to have their parents co-sign since they were both college students without proof of sufficient income. They rented in a large apartment complex and the co-signing is just part of their standard procedure. 1 Quote Link to comment Share on other sites More sharing options...
Guest Posted June 22, 2017 Share Posted June 22, 2017 I'd absolutely ask for a cosigning of someone who does have adequate income streams or assets, and I say that as someone looking to rent! Quote Link to comment Share on other sites More sharing options...
creekland Posted June 22, 2017 Share Posted June 22, 2017 I'll join everyone else and say it's too risky with no real verified income or significant savings. Either a co-signer (parent) or "sorry." Even with a month's extra rent, if their income isn't high enough to cover regular rent, there won't be a happy ending. They may be too young to realize that TBH. Everything works out "fine" when you're young - until you find out life doesn't mimic movies. Many states favor tenants when rent goes unpaid - and you've no idea how they'll keep up the place on top of that (not repairs - just regular life). 3 Quote Link to comment Share on other sites More sharing options...
idnib Posted June 22, 2017 Share Posted June 22, 2017 Can you help me understand that? Normally, we'd call an employer and verify income, but the only way to know the net income is by tax return if he's self-employed. I don't really get it since we're saying he can black out social security income. Sorry I wasn't clear. Yes I was implying he might get paid more than the tax return would reflect, or that he hasn't been filing taxes so there's nothing to give you, or that he just might be more comfortable showing invoices and deposits to his account if he's concerned about showing you the returns. My guess is he didn't file last year, either due to no or very low income, or he's making money under the table. Otherwise it makes no sense he wouldn't show you with the SS number blacked out. Quote Link to comment Share on other sites More sharing options...
MommyLiberty5013 Posted June 22, 2017 Share Posted June 22, 2017 I do not own rental properties; however, I have worked in banking/finance. Generally, it is advised that people spend no more than 30% of their before tax income on housing if they are in a HCOL area and no more than 25% of their before tax income on housing if they are in a LCOL area. These percentages include rent/mortgage as well as utilities and homeowners'/renters' insurance. You do the math based on their figures that you have. But, for example, if the apartment costs $700 monthly without utilities and renters' insurance included, then that's $8,400 annually in rent alone. ($700 x 12). If they earn $28,000 disclosed annually before taxes, then their housing allotment should be no more than $8,400 in HCOL areas and $7,000 in LCOL areas. But that $8,400 and $7,000 needs to include the utilities and renter's insurance. If your gut is telling you "no," then trust that. But the math figures will help strengthen your decision based on the data they have provided. Can they afford your place and not live beyond their means? Also, I know and understand that a lot of people make a living "under the table." But why? The fact that he is refusing to provide basic data to you does not sit well with me. You are taking a risk by renting to them, they have to fully disclose. Period. If a person is unwilling to provide tax returns, to a "business" then I say "No, we cannot offer you our services." You are not a charity. I may seem mean on this, but I have seen far too many people get messed up and screwed over by people renting. It is not pretty and it gets ugly. Caveat: As a young person, my dad had to co-sign with me on my first apartment. I agree with PPs that if the co-signer can provide proof of assets and/or income, then I say that you possibly rent to them with a 12 month lease and a full month's rent as a signing requirement. The co-signer needs to be employed with longevity, pass a credit check, and provide proof of income/assets. 3 Quote Link to comment Share on other sites More sharing options...
Carol in Cal. Posted June 23, 2017 Share Posted June 23, 2017 I personally would not rent to them. I want to know that renters: 1. Are employed at a reasonable/stable income for the rental price 2. Have a history of paying bills on time 3. Have rented from landlords who would happily rent to them again 4. Know how to take good care of a place and are inclined to do so I find this out by pulling a credit report, calling two prior landlords, verifying employment, and calling personal references. I am very thorough. I have turned people down who could not provide those verified attributes to me, even in a down market where it was hard to find tenants. The downside risk to having bad tenants is far higher than the upside of getting a place rented more quickly. In your case, I would get all that same information on the cosigner, and I would still regard this as a weak application if one of the signers was not going to live there. It's rough on a landlord to have to go four rounds of 'He said he paid already', 'He said he was going to pay next Tuesday', 'I don't even live there, leave me alone' if the rent is late. You never ever want to have to go to court--it's expensive and a real hassle. 2 Quote Link to comment Share on other sites More sharing options...
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