Income Verification

The last step when evaluating a rental applicant

You posted your rental, showed the property, ran a background screening and it looks like you found a good tenant.

You reviewed the background screening and can see that the applicant is current on their bills, has no collections and there is no criminal or eviction history.

But you need to take one last step before accepting the applicant – income verification.

You can try to contact the employer, but in my experience reaching them is difficult. And most employers are reluctant to provide that information even if you are able to contact them.

According to Melanie Petterson’s blog post on Fit Small Business, “Landlords should ask prospective tenants for proof of income to show they can afford to pay rent and to determine if they’re committing fraud with forged documents. Pay stubs are the best proof of income, but landlords also should collect at least one other proof of income document and compare the two.”

This is very good advice, with some exceptions.

Types of income verification documents

Patterson lists 7 types of verification documents –

  • Pay stubs
  • Tax returns
  • Bank statements
  • Letter from employer
  • P&L statements
  • Social Security benefits statement
  • Court ordered agreement (e.g. child support)

What documents to request

We feel that this list can be streamlined after many discussions with landlords, property managers and real estate agents that use our TenantMagic screening services, You should be able to accurately assess an applicant’s income with just a few documents. The ones you should request depend on the applicant’s situation.

Pay stubs are good for both income and employer verification. But not all applicants are W2 employees where they receive a pay stub. Many are independent contractors, self-employed or independent business owners. We recommend that landlords ask for bank 3 recent bank statements in those cases. The applicant should be able to show that the reported income is going into a bank account. A bank statement is also a good supplemental document to go with the pay stubs for W2 employees.

A letter from an employer can be used when an applicant is changing jobs or starting a new job after graduating from school. We often see this with medical students that are starting residency or entering a practice where they had minimal income but will have enough income moving forward.

Tax returns are not recommended as they usually outdated by the time an applicant is applying. The income reported is from the previous year and even in the best circumstances are 2 to 3 months out of date. A lot can happen from the previous year so we don’t place much value on tax returns.

P&L statements can’t be considered reliable unless they are provided by a business’ bookkeeper or accountant.

Many retirees that get Social Security benefits also have pensions and/or retirement fund accounts. Social security and pension payments can be verified with a bank statement showing the date and amount of the deposit. Retirement funds are also typically paid out monthly and can be seen in an bank statement. You can request also request the retirement fund(s) statement if the current income is not adequate to meet the income to rent requirement.

Court ordered agreements such as child support should be able to be verified with a bank statement showing the income being deposited on a monthly (or more frequent) basis.

Document verification with background screening

At TenantMagic we have incorporated document verification into the decision process after the landlord receives the completed rental application and background reports. To see how click here Document Verification

After the application is completed and an Accept, Conditional or Pending decision is made, the property owner indicates that additional documents are required to complete the application process and specifies exactly what documents are needed. This can include income verification documents and others such as a photo ID.

An email with a link is sent to the applicant where they can upload the required documents.

Once the applicant uploads the documents, the owner or agent is immediately notified with an email that contains a secure link to the applicant’s documents that can be viewed and downloaded for their files.

With comprehensive background screening plus income verification property owners will not only a have a better understanding their tenant’s past history but also of their financial viability to meet their rent obligations.

About TenantMagic

Jay Apple is co-founder of TenantMagic.

TenantMagic provides online rental applications with the most comprehensive tenant screening reports available (credit, criminal, sex offender, and eviction) to property managers and owners.TenantMagic is free to owners and managers – applicants pay the fee.

Feel free to contact me at or 216.288.5044

How’s This For Customer Service?

Still waiting for an answer.

The problem with using Zillow for rental applications and background screening

TenantMagic provides online rental applications and comprehensive background screening services. We work with landlords, property managers and real estate agents throughout the US.

Zillow now offers a similar service for landlords and I have been asked about the difference between us. They stopped providing this service a number of years ago have now started again.

Our growth is the result of our customer service. We prominently display our phone number. We also actually answer the phone and respond very quickly to emails and texts from landlords/real estate agents and rental applicants.

I have a Zillow account for a rental property listing from a couple of years ago and submitted a question on their website regarding their ability to work with Spanish-speaking applicants. There is no way to call Zillow for customer service.

A week went by and I finally received a response, but not an answer from their Customer Care Manager.

Zillow’s Response-

“Since you submitted your original request a week ago, it’s likely that you’ve moved on or that you were able to self-resolve your issue. If you still need assistance, simply reply back to this email and we will be happy to help you.”

I did reply to the response and asked them again if they could accommodate Spanish-speaking applicants.

I finally did get an answer a day later and it was “No”.

It took over a week for Zillow to tell me that they can only handle applicants that speak English.

By the way, TenantMagic can and does assist Spanish-speaking applicants.

So, there is your answer regarding the difference between TenantMagic and Zillow. We make every effort to respond immediately to our users. Zillow hopes you can figure out  any questions or problems on your own.

About TenantMagic

TenantMagic provides online rental applications with the most comprehensive tenant screening reports available (credit, criminal, sex offender, and eviction) to property managers and owners.TenantMagic is free to owners and managers – applicants pay the fee.

Feel free to contact me or register at


Artificial Intelligence and Rental Screening

The Wall Street Journal recently published an article – Robots Are Taking Over (The Rental Screening Process) Landlords are using artificial intelligence to vet prospective renters.

I subscribe to the Journal and find it to be a top-quality publication.

I also found the headline to be somewhat misleading and would like to give some additional insight regarding using “artificial intelligence” when screening a rental applicant.

Using Artificial Intelligence with Tenant Screening

The premise of the article is that there are a number of background screening services are using artificial intelligence to predict the applicant’s willingness to pay rent.

A definition of artificial intelligence is  “…the study of how to train the computers so that computers can do things which at present human can do better.”

The artificial intelligence discussed in the article is actually algorithms that have been developed based on historical applicant data analysis. These algorithms analyze credit and income history to provide a score or recommendation that predicts the likelihood of the applicant to meet their rent payment obligations.

TenantMagic uses TransUnion which provides their ResidentScore for their recommendation.  Here is how they describe their Resident Score-

ResidentScores give landlords pertinent information about rental applicants; specifically, the reliability and level of risk they may bring. ResidentScore assigns a score from 350-850, with 850 being the best score possible. This score is designed to take credit report data into account when determining a tenant’s score.

We review the tenant’s credit history, just like a credit score. But we run the credit history through a different formula to compile a ResidentScore. Based on the score, and the property information entered, SmartMove will also generate a leasing recommendation.

The Limitations of Artificial Intelligence When Screening Tenants

Algorithm-based recommendations can be helpful, but they should be considered a tool that only gives part of the picture. By no means should a landlord rely solely on the recommendation to make a decision.

Many of the landlords that currently use TenantMagic transitioned from paper applications.  They used either a very basic credit report or nothing at all when screening an applicant. I have had conversations with many of them that told me their horror stories because they accepted applicants without properly screening them. But relying strictly on a algorithm-based recommendation is not the answer and will not eliminate their problem tenants.

There are other factors beyond income and credit history that are critical when considering an applicant. TenantMagic also provides eviction and criminal reports. These reports are not incorporated into the algorithm-based recommendation.

I would consider eviction reports one of the more important reports to consider. If an applicant has been evicted in the past, it is likely they will be evicted again.

Criminal reports (where not prohibited by law) can identify convicted violent individuals and drug dealers.

The Need for Human Input

TenantMagic’s goal is to provide the best possible information to landlords and agents so they can make the best possible decision when considering a rental applicant. Our customer service agents do review screening reports with landlords and agents when requested to make sure they fully understand all aspects of the applicant’s background, not just the income and credit history.

Yes “artificial intelligence” and algorithms can play a role in determining a rental applicant’s viability, but it is a tool that definitely needs to be used with human interaction and judgement.

About TenantMagic

TenantMagic provides online rental applications with the most comprehensive tenant screening reports available (credit, criminal, sex offender, and eviction) to property managers and owners.TenantMagic is free to owners and managers – applicants pay the fee.

Feel free to contact me or register at