The following is a general guideline to show how most Los Angeles landlords and agents verify income, why it’s important, and why you should fill out the application truthfully and completely to avoid delays in the screening process. For more information on the application process, watch our video tutorial here.
It’s not uncommon for landlords to require you to show how you make your dough. In fact, your income is one of the main deciding factors on whether or not the landlord will rent to you. He or she will want to make sure you make enough money to not only cover the rent, but also other typical living expenses. That way, the landlord can sleep at night, knowing that you will be paying him every month on the first, without delay. Landlords have expenses too: mortgages, insurance, maintenance, etc. They need to guarantee that their new tenant will pay the full rental amount requested, every month on the first, and on time.
Depending on the type of work you do, you might be asked for additional documentation of your income. For instance, if you are self-employed or work as an independent contractor, landlords will request you provide them with the last few recent bank statements, your tax return or 1099s from the previous year. Different landlords will request different documentation.
If you are an employee of a company, you receive a paycheck that shows your current and “YTD” (year-to-date) salary. The landlord will most likely require your last two pay stubs. If it’s a new year, the landlord might request to see a couple of pay stubs from the previous year.
The landlord or rental agent will contact your employer to verify the continuation of your employment for the lease term. So give your employer the heads up that you’ve applied for a new apartment and that the landlord or agent will be contacting them. By signing the application you grant the landlord or agent permission to contact your employer.
Once the landlord determines your monthly or annual income, he or she will start crunching the numbers. The majority of landlords would ideally like to see your monthly income equal to two and a half to three times the amount of the rent. For example, say you want to move into that gorgeous one bedroom with hardwood floors, a short distance to the beach and amazing nightlife, but it is $1500.00 per month. Let’s see if you can afford it! $1500 X 2.5 = $3750 Do you make at least $3750.00 per month?
Say you fall a little below that number. I would still encourage you to apply for your dream home. As stated before, all landlords are different and have different requirements. Maybe you have a discretionary or “fun money” savings account, or other sources of income that can be added to your monthly income amount.
To ensure a timely response to your application, anticipate what will be required by the landlord to rent the unit, and answer all questions in detail and to the best of your knowledge. It’s also important to be truthful and accurate when stating your monthly income. Any inaccuracies could delay your app and result in losing out on your dream apartment or making a less than positive impression on your potential landlord, who might be considering other applicants as well.