Will I have trouble renting in Austin with my non-standard proof of income? (Howe: fit in, sublet)

[east2west813]

Hi, I'm an American who has been living abroad for over a decade, and will be relocating to Austin.

The main issue I'm anticipating is that the way I pay myself is pretty non-standard for most Americans.

I've structured my company to be tax-efficient for an American living abroad, and thus all my income on my tax returns shows on the foreign earned line. My regular income generally shows 0.

I don't have pay stubs - I just transfer money from my business checking account (US-based) to my personal checking account (also US-based). I can certainly show proof of these regular transactions coming into my account.

A few more details about my situation:

• My credit score is great - generally a little over 800
• For 2021, my salary paid to myself has been $9,000 per month, transferred into my personal checking account from my business checking account
• for 2020 and years previous, my total earnings were around $48,000 per year, marked as foreign earned income on my tax return
• My wife will be moving and living with me, although she will be a newly arrived immigrant, and though she does have money in the bank, does not have current income to show
• I don't keep much cash on-hand, but have about $50k in various (fairly liquid) investments if that helps, though some is crypto-related

Is my situation likely to scare off landlords and apartment complexes we would be attempting to rent from? I'm hoping my credit score and high income will put their minds at ease, but I haven't lived in the US for over a decade and am just not too familiar with the system of renting an apartment. We are also willing to pay additional months upfront if that would help our cause.

We've also considered starting out with a shorter term sub-let for a number of reasons, thinking that may be a more flexible way to approach this. On the flip side, maybe that overcomplicates things by involving a third party in our non-standard situation.

I know that "what's going to happen?" type questions can be difficult to answer accurately, but any insight at all to what we might expect would be helpful.

[Need4Camaro]

With your credit score I would imagine as long as you are able to carry the preliminary rental fees / deposits, you can probably get around proof of income. That or maybe they will allow you to use your taxes for verification.

My situation is a bit different than yours but when I relocated to Austin my first apartment allowed me to use my contract for my employer as proof of income as I hadn’t started working yet, so they can be flexible.

[VAF84]

I think it depends on where you want to rent. I have a similar issue since the way I pay myself is similar to how you do it, only through an S-Corp and I also have to deal with stuff such as per-diem. Anyway, if you're renting a house or condo (individual rental property owner), it would be up to their discretion, and they may be more amenable to this stuff if you have proper backup. Maybe some apartments would be okay with it.

However, I will say that it was an absolute nightmare with the "luxury" apartment complex. A couple of years ago I was going to rent a nice apartment near the Arboretum. Same as you, perfect credit, great income but hard to prove (i.e. not traditional w-2). I may as well have been buying a house. It was a total nightmare.

Unless you cash out of your crypto, which obviously you don't want to do right now (it broke $60k!), it may as well not exist. Good news is you have great credit, and you filed US taxes. Anyway, I'd try without the sublet first. Also, apartments right now are struggling to fill vacancies since everyone fled to the burbs due to the Rona. So maybe now's the best time. Good luck!

[BobPhipps]

We really didn't have a problem at all. When we got here we didn't have jobs. We had plenty of money, and a good FICO score. I even offered to pay the rent in full for the 1st year. Most said that wouldn't be necessary and they just put down our previous jobs for employment, which was irrelevant because we weren't going back to either (and they had no presence in Texas). With that much in liquid investments, I don't think you'll have a problem. Most apartments seem to be willing to work with new renters (at least that was our case).

[ashbeeigh]

If you're really worried maybe find a locator who can help advocate for you as you find the locations you want to live.

[austin-steve]

In short, in 30+ years of professional Landlording, I've always told applicants "your income is what you tell the IRS you make". And you prove it either with a 1040 showing that amount, or a recent paystub from a W2 job. No exceptions. It keeps it simple and easy and prevents me from trying to figure out how to systemize the manner in which I would consider substitute documentation. Basically, I need the same proof a Mortgage Lender would want to see.

That said, there are a LOT of terrible landlords who are not meticulous or scrupulous and who will believe any story. They may even accept a bank statement showing a certain amount being deposited the past 3 months. These sloppy landlords are also the worst at having a system in place that ensure quick and efficient repairs, so beware what you ask for.

Apartment occupancy rates have softened in Austin, and Apartments generally tend to be more flexible than those of us dealing in single family detached homes that we own or manage for clients. I'd call and ask one. But reduce your story to a succinct one sentence question of statement.

"I'm coming from living abroad and don't have traditional proof of income, what will you accept as proof of income if I don't have a paystub or tax return to provide? I do have an 800+ FICO score"

Don't get into a long story. Just ask it like that and see what they say, or what they ask back.

[VAF84]

I'm with you on that Steve. I just rented out our other place. As a small investor I can't afford to take chances with a bad tenant. I call references, employers, and the whole nine yards. But as you said, there are plenty that either don't know or don't care, and that's the best bet for someone with income that's hard to prove/verify.

[east2west813]

Originally Posted by austin-steve

In short, in 30+ years of professional Landlording, I've always told applicants "your income is what you tell the IRS you make".

I did tell the IRS this. It’s reported directly on my foreign earned income line, which makes sense as I was living abroad.

In my situation, if I were applying to rent one of your properties, would you not accept me with my 800+ credit score and $9k/month income, just because it’s not on a paystub?

[austin-steve]

Originally Posted by east2west813

I did tell the IRS this. It’s reported directly on my foreign earned income line, which makes sense as I was living abroad.

In my situation, if I were applying to rent one of your properties, would you not accept me with my 800+ credit score and $9k/month income, just because it’s not on a paystub?

In the absence of a paystub (hire letters also work, when coming for a new job, for example at Dell), I would use the income shown on line 15 at the bottom of page 1 of your 1040.

If that number on your return is $108K, then Yes. As long as it puts you at 3x per month above the rent for the home you are applying for. You would qualify for a $3,000 per month rental home.

What amount does line 15 of your 1040 show?

You would still need verifiable rental history.

Like I said, your mileage may vary with other Landlords, but most professional property managers are similar to me.

[east2west813]

I will not be coming for a new job. I’m the owner of my company and will continue to run it in the US. I will dissolve the current structure I have and set up a new S-Corp. I can write a letter of employment, but it will be coming from me, as the owner of the company.

I have nothing on my line 15 of my 1040 of my 2019 return. That question is about my employment abroad. I’m not employed abroad. My company operates through a US LCC and I physically have lived abroad, while making use of the foreign earned income exclusion.

All my income is on the foreign earned income section.

I do have a lease in the country I’m in currently, and have since 2018.

I guess it’s just frustrating for me because I have great credit and a decent income from running my own company and it seems to come back to bite me, as I don’t fit into a nice neat little employee box.

Having lived abroad for close to 15 years, cash and income are king, and.no one would ever turn a person like me away from renting their property.

I guess this is just my first taste of moving back to the US and dealing with companies and institutions who think Like they always have and are unable to think outside the box for peoples situations - this is in no way an attack on the way you view things.

It’s just very surprising to me as there’s tons of people moving to Austin and running their own businesses online in a similar fashion. Hopefully I’ll be able to find a good landlord who doesn’t want to just tick the same boxes they have for decades, despite the modern workforce changing rapidly and doing things much differently.