Financial stability is one of the markers that landlords use to assess the viability of their tenants. Landlords want to make sure that their tenants have a good job with a steady income, a pointer to timely rent payment. It’s not far from the truth to say that some tenants have been conning landlords by moving from one property to another to exploit their previous rent indulgence. Here are 3 ways to verify your potential tenant’s financial stability:
Contact Their Employer
A visit to a prospective tenant’s workplace is not off the mark. You may contact the employer of the prospective tenant to verify their employment. An employment verification form will then be issued. Apart from confirming that the prospective tenant actually works there, details of their employment and their income may also be requested. The prospective tenant’s income details will give a clear insight into the prospective tenant’s financial strength. Verification is a step that determines the credibility of the prospective tenant, which can then inform your opinion of them. This procedure doesn’t usually take much time.
Federal Tax Records
This may seem like overkill, but some prospective tenants are self-employed. The income of self-employed prospective tenants is often tricky to verify. This is because they own their business, as such any document originating from the prospective tenant will be difficult to verify – it could be doctored for all you know. So, how do you verify income in this situation? A request for the federal tax records of the prospective tenant should do the trick. This can be done by getting the prospective tenant to submit the necessary form requesting a copy of their tax records from the HMRC. What is the HMRC? The HMRC is an acronym for Her Majesty’s Revenue and Customs, and it is the department that is responsible for the collection of taxes and regulation of the national minimum wage in the UK. The HMRC have the tax records of everybody who pays taxes in the UK. The process of getting a copy of the federal tax records is not usually quick, it takes time, and the patience of the landlord will be tested.
Running a Credit Check
Having the credit report of a potential tenant will help you get an idea of how financially stable they are. The credit report will show you how well they are at coping with their financial obligations. You will be able to analyze their report and find out if they have debts, and if they have ever filed for bankruptcy. Also if they have a criminal record. Have they ever been evicted? It can be particularly helpful to compare the current debts of the prospective tenant with their income. A credit check will not show where the prospective tenant has previously worked, but it will show who has run a check on the tenant’s credit before. If you want to dig further, you can find out which previous employers ran a check on the tenant’s credit and then ask the necessary questions.
It is important for landlords to find out as much detail as they can about their prospective tenants, especially their financial stability. An oversight could be costly, therefore verification of the prospective tenant’s financial solidity should be thorough.