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I'm self-employed, make a great income and pay my bills. I can understand the concern, though. When proving my income for things (not for renting anymore, thank goodness), I've always been prepared with copies of bank statements, Paypal statements, paid invoices and tax returns. I'm a freelance writer who writes articles and blog posts for commercial websites, so I often get raised eyebrows when I explain what I do. Providing ample proof of my income in various forms has always worked for me, though.
The man who used to cut my grass preferred to be paid by check instead of cash. That wasn't a problem but wasn't something I was used to; I write very few checks. He said he preferred checks so that he could prove his income.
If someone can provide proof of (recent) income that is within your requirements, I don't see the problem. If anything, I think a self-employed person (who is truly self-employed and making a good income and not claiming to be so when they aren't working or when they're a part of a failed MLM scheme or something) is probably more financially resilient. If I lose a client, I have plenty of other work and am capable of finding more. When I bought a lawnmower and told my lawn care guy I didn't need him anymore, he might have gotten 2 or 10 more calls from new clients that same week. If a person who is dependent on one particular job takes a loss in hours or loses their job, however, they might not be able to bounce back quite as quickly as someone who is accustomed to bringing in income from multiple sources.
Yes, I am aware that this is a huge stereotyping and I didn't get into lots of detail because I didn't want to bore you all. The other part of this is, yes if a LL feels like doing the extra legwork of checking schedule c's and back tax returns and income analyses and all the rest to be sufficiently comfortable renting to a self-employed by all means do it. I would, if I wanted to do all the legwork. And I certainly wouldn't rely on my PM to do it. Here's a cute story:
Quote:
I had a genius thought that went something like this: “I’m going to hire a property manager to deal with all this crap.”I told him I’m an easy-going guy with only two rules:
No cats (see above).
Complete a background check.
Well it turns out two rules were two too many for this property manager. Truth be told, I didn’t know what his background looked like either. I never met the guy.
Anyway, one day I’m on the crapper perusing Facebook (like we all do) and I see one of my buddies post the following update on Facebook: “Woke up to the sound of gunfire. Turns out it was actually the sound of Multi-bank Grenades. Happy Monday.”
So my point is: not all self-employed are bad. Not all employed, salaried are good. It's just the ratio of bad to good is a little higher for self-employed than it is for salaried ones. I didn't make that up. I read it on a dozen different websites.
And I'm the first to confess I would never rent to me. True story:
When I was out of university I rented an apt. My alcoholic friend who was a brilliant musician was supposed to split the cost working a responsible job. That went south really fast. Six months in he trashed the place in a few drunken rages and we got evicted. I tried to take the LL to court to get back my deposit. Turns out the LL was a judge in the court I was filing the case and had to recuse himself. When I heard that I dropped the case so fast you could hear the thud.
I'm self-employed, make a great income and pay my bills. I can understand the concern, though. When proving my income for things (not for renting anymore, thank goodness), I've always been prepared with copies of bank statements, Paypal statements, paid invoices and tax returns. I'm a freelance writer who writes articles and blog posts for commercial websites, so I often get raised eyebrows when I explain what I do. Providing ample proof of my income in various forms has always worked for me, though.
The man who used to cut my grass preferred to be paid by check instead of cash. That wasn't a problem but wasn't something I was used to; I write very few checks. He said he preferred checks so that he could prove his income.
If someone can provide proof of (recent) income that is within your requirements, I don't see the problem. If anything, I think a self-employed person (who is truly self-employed and making a good income and not claiming to be so when they aren't working or when they're a part of a failed MLM scheme or something) is probably more financially resilient. If I lose a client, I have plenty of other work and am capable of finding more. When I bought a lawnmower and told my lawn care guy I didn't need him anymore, he might have gotten 2 or 10 more calls from new clients that same week. If a person who is dependent on one particular job takes a loss in hours or loses their job, however, they might not be able to bounce back quite as quickly as someone who is accustomed to bringing in income from multiple sources.
You sound like my kind of tenant. Want to rent a house?
If someone can provide proof of (recent) income that is within your requirements, I don't see the problem.
I think I see the real problem. Since clearly the OP is new to this and flying blind without a compass, maybe its just the use of the wrong terminology. Based on the OP's own wording and statements, I suspect the OP is actually talking about "Cash Income" not self employment.. To the OP it may be the same thing and to use we are wondering what is this person smoking.
So, if the actual intent of the question was to discuss a Cash Income applicant, that I can understand in the context of this discussion.
I think I see the real problem. Since clearly the OP is new to this and flying blind without a compass, maybe its just the use of the wrong terminology. Based on the OP's own wording and statements, I suspect the OP is actually talking about "Cash Income" not self employment.. To the OP it may be the same thing and to use we are wondering what is this person smoking.
So, if the actual intent of the question was to discuss a Cash Income applicant, that I can understand in the context of this discussion.
I think you are being far too kind But then again, perhaps that IS what the OP believes all self-employment means. Pretty far fetched (and frankly, frightening) but then again, who knows?
Even still, as I stated above in my previous post, as long as the OP just follows and sticks to their pre-screening requirements (listed below) and does all of his/her credit/background checking then that 'cash under the table' situation would be one area that the applicant would be disqualified because they would have no proof of $6000+ AGI/ that they require. But if they have proof of everything required then there should be no reason the applicant should not be rented to, self-employed or not.
All applicants will have their backgrounds checked. Application fee $50; refunded to successful applicant. The successful candidate will have * valid SS number * AGI of $6000+ (3x's AGI, that's the rule of thumb) * FICO score of 700+ * verifiable address history for the last 5 years w/ clean rent payment record * no prior criminal convictions * no registration in the national sex offender registry * no prior evictions * no current/past judgements * verfiable employment history for last 5 years * DTI ratio of 35% or below * security deposit of $6000
I would think a credit report and a FICO score would be far more important than employment history. I have several friends that havent been employed for sometime, and are living very comfortably off of investments, and could the rest of their life. Their FICO scores and credit reports are exemplary.
I have no idea what you are worried about, whether they are self-employed or not, as long as a person 1) meets all of your pre-screening requirements (that you listed in another thread) and then also 2) if they pass the application screening (credit/background check, rental references, etc). If they are as bad as you seem to think and you also believe everything you read about 'self-employed' people, then they are bound to slip up on one of the screening areas, right? But if they do pass everything then they still aren't eligible to rent in your mind?
You seem to like to pre-judge and stereo-type people far too much which is not a good trait. I can see why you are having a difficult time getting renters. And the biggest hypocrisy and double standard of all is that you, being a LL, are 'self-employed'.
Being Self-Employed Does Not mean Drugs. I was Self-Employed for 15+ years! Paid my Taxes Double! There are a Whole List of Jobs people do today At Home & Self-Employed. Even YOU OP are Self Employed... How do you Refuse to Rent to yourself!?!?
Right. People in glass houses. . . My wife is self employed. She built her own home inspection business from the ground up. She is a rarity; not only a female home inspector in a sea of guys, but a female home inspector who owns her own business. She makes a good living in an unpredictable business: real estate. She has a friend who is also a successful self employed female home inspector.
And what's this "self employed guys with dogs and kids being drug users" nonsense? My brother-in-law left his horrible utility line locating job to go into business for himself. He has two children and (gasp) a dog. He makes far more money working for himself than he ever did at his job working for a boss. He can actually support his wife and kids now, and the financial stress he had before has all but disappeared. His old job paid only $14/hour, and he had to work tons of overtime just to make ends meet. People become self employed for many reasons, a big one being companies don't pay enough for them to survive. Just think about how many people think it's the worst imposition in the world to insist that companies pay workers a $15/hour minimum wage And none of them use drugs. But even if they did, anyone can use drugs, whether they work for a boss or not. If you're so concerned about making sure they are really working, you can check their tax records to be sure they are paying the IRS their self employment taxes the scheduled 4 times/year.
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