How Can I Show Proof of Income as a Self-Employed Renter?The rental application process can sometimes feel like jumping through hoops, even after you’ve toured your dream apartment and decided
How can I show proof of income as a self-employed renter?
Dated: November 5 2021
How Can I Show Proof of Income as a Self-Employed Renter?
The rental application process can sometimes feel like jumping through hoops, even after you’ve toured your dream apartment and decided to go for it. Landlords will often require a full rundown of your rental history before allowing you to move in. Their requests may include anything from your current job title to previous references to your pet’s profile—they want a clear idea of who will be living in their unit.
A critical piece of information all landlords ask for is proof of income. For some renters who work a traditional nine to five, this means providing a few pay stubs or an offer letter showing their annual salary. But for self-employed renters, providing these documents can become a bit tricky. Consider using one, two, or all three of these items as proof of income when submitting your application for your next apartment.
Annual tax returns
A federal tax return will always be a preferred proof of income. This document is an official record of the money you’ve made over the last year and, especially for self-employed renters, gives landlords a clearer picture of how much you can afford. 1099 Forms are also adequate to show earnings made from freelance work. If, for any reason, these documents underreport your total annual earnings, it’s a good idea to have the necessary paperwork (i.e. bank statements) on hand to supplement your proof of income.
Annotated bank statements
Provide annotated bank statements from your business account. These should show all of the payments received from client work or sales and will save you the trouble of having to share your personal finances with your landlord or lender. If business payments go directly into your checking or savings account, be sure to go through your statements and clearly highlight the monies garnered from your freelance work and other business expenses.
Profit and loss statements track all of your business-related expenses (money earned and money spent) over time. The frequency at which you choose to record these—monthly, quarterly, semi-annually, or annually—is up to you. Self-employed workers and freelancers typically use these to keep a closer eye on their business’s performance and understand where they may need to scale back or are able to grow. These are also excellent examples of financial records to share with landlords as proof of income. Consult with an accountant to get started.
If you are self-employed and searching for a new residence, know that these extra obstacles may come into play. I’m here to help! I can work with you to overcome these obstacles and see you through a successful application process. Contact me at firstname.lastname@example.org or 617.958.1750 to learn more about my services.
Krista Farmer is an Associate on the Residential team at Senné. She specializes in buyer and seller representation and leasing services throughout Greater Boston, Winthrop, and Revere. She is a....