How landlords can verify proof of income in 2025

Protecting your property investment as a landlord involves ensuring tenants can afford their monthly rent. It’s an essential part of the tenant screening process, typically starting with proof of income.

Requiring tenants to confirm proof of income for renting is essential to this objective.

Tenant income verification can reduce the risk of missed or late rent payments. You can protect your income stream by exercising due diligence and confirming this information.

So, how do landlords verify income? This guide offers insights, tips, and technology tools you can use.

1-month proof of pay: Is it enough?

Common practice is to request a month of pay stubs. It’s enough information to calculate gross pay. A rule of thumb is that rent shouldn’t exceed 30% of monthly wages. But is that enough to ensure they have consistent income and can pay rent for a year?

It depends. Have they provided other documents like bank statements that demonstrate they have substantial savings? Having this information can make you more confident in potential tenants’ financial security.

Another angle is to consider their length of employment. You can feel more at ease if the applicant has been in a job for multiple years. If the job is relatively new, you may need to ask for more financial disclosures.

Also, consider the rent amount in comparison to their 1-month pay. Is it less than 30%? If so, those pay stubs could be good enough.

The best way to determine if they can afford rent is to request 2 or even 3 months of pay stubs along with additional income verification documents.

How to verify proof of income for renting

There are numerous forms of income verification you can request from tenants. Before reviewing those, there’s also the question of how you manage the workflow.

Traditional vs. digital tenant income verification

The way you collect documents significantly impacts the speed and efficiency of the leasing process. Traditionally, this has been a paper-based task, with tenants delivering copies or originals to verify their income.

Unfortunately, paper-based methods come with challenges. They can extend turnaround times, delaying rental deals, and require extra steps like scanning and uploading, which can hinder productivity. Additionally, paper submissions are more vulnerable to fraud, as creating fake pay stubs online is easier than ever.

Now, let’s review the documents suitable for income verification.

Pay stubs

A pay stub typically includes details such as the applicant's name, employer information, pay period, gross earnings, deductions, and net pay. It’s a great way to confirm an applicant's employment status and assess their income stability.

Pay stub verification requires scrutiny on your part to verify authenticity. Be sure you know how to spot a fake pay stub.

Tax returns, W-2 forms, and 1099s

IRS 1040 tax returns, 1099s, and W-2 forms are reliable forms of income verification. By reviewing these, you can get an overview of an applicant’s annual income and confirm the numbers on the rental application.

The challenge is that collection and review of these documents can be time-consuming. Depending on how people file their taxes, these forms may be harder to access. The complexity of their returns and wages could also require additional time to compare and verify.

A 1099 shows gross income as a self-employed or gig worker. However, it doesn’t offer context on what future earnings may be, so you’ll want other proof of pay sources.

Employment letters and contracts

Requesting an employment letter or contract can help confirm an applicant’s self-reported income and employment status. This would be especially helpful for those just beginning new jobs that don’t yet have their first pay stub.

You can also verify the information by contacting the company. These documents typically outline the terms of employment, including salary, start date, and any bonuses or incentives, giving you a good idea of whether or not applicants can afford rent.

Bank statements

Bank statements provide a detailed record of an individual's financial transactions, including income deposits, withdrawals, and account balances. Like a 1099, this proof of income is useful if an applicant is self-employed or a gig worker.

You can also request a bank statement if the applicant is currently unemployed. As a general best practice, ask for at least two or three months of statements.

Proof of income letter

A proof of income letter is another way to verify income. You can provide them with a template for this. It would include these fields:

• Company name
• Business address
• Tenant title
• Years of employment
• Gross salary for 3 years

The potential renter’s company representative would sign the document and include their contact details. You can then follow up to validate the completed proof of income letter.

Workers’ compensation letter

If an applicant suffers a workplace injury, they may receive workers' compensation. By requesting a worker’s compensation letter, you can make a more informed decision about their income stability. At the very least, you can confirm how long they’ll receive payments and the total amount.

Social Security benefits statement

Social Security benefits statements from the Social Security Administration (SSA) are for individuals who receive payments from the government. It could be their primary source of supplementary income due to continued employment or disability. The statement typically includes benefit details such as monthly payment amounts, cost of living adjustments, duration, and expiration.

Social Security benefits are typically reliable and consistent because they provide a steady source of income for applicants. However, they may not be sufficient to meet the rental requirements, especially in areas with high living costs. They also may not provide a comprehensive picture of an applicant's financial situation since it only reflects Social Security income and does not account for other sources of income or expenses.

Unemployment statement

If a potential tenant is unemployed and receiving government unemployment benefits, they should have documentation showing the amount they receive regularly as income. The duration of unemployment benefits is usually for only a specific period. After the claim ends, the future of their finances will be uncertain.

Unconventional income verification

As the gig and freelance economy continue to be popular, how people make money is changing. Some in this category will have 1099 forms. Others may not if those hiring them don’t keep records.

Many workers receive payment through platforms like PayPal, Venmo, Zelle, or others. Another way they get paid could be via the accounting software they use, with a payment processing feature.In any case, these systems track payments accurately. Tenants may be able to download reports from platforms or their software showing a steady income stream.

How to spot fake proofs of income

Believe it or not, 93.3% of property owners and managers experienced rental application fraud in the past year. Protect yourself from these scams by recognizing these red flags:

• Inconsistencies or irregularities
• Formatting errors
• Misspelled words
• Discrepancies between the applicant's stated income and their lifestyle or spending habits
• Numbers that have been rounded
• The number "0" is replaced by the letter "O"
• Illegibility or unprofessional

Applicants who are dishonest with their financials can put your property at risk. With income verification tools, you can access databases and financial records to confirm employment and income details provided by the applicant.

Tenant income verification in the digital age

The entire tenant screening process has become technology-enabled. In the digital world, paper documents are obsolete.

Digital options create efficiency for you and convenience for potential renters. Using technology can also reduce the risk of fraudulent documents. You can still request documents to verify income, but advanced platforms do more than collect information. Real-time bank data validates the accuracy of the documents and can cover all types of income — W-2 or irregular/gig earnings.

By using trusted, secure income verification technology, you’ll streamline the process, making it more convenient for you and your renters. Nothing gets lost this way; there’s a digital record of everything.

What if an applicant can’t provide proof of income?

If an applicant can’t provide proof of income, it can raise concerns but may not be grounds for immediate disqualification. Instead, there are other things you can do if you choose to proceed with their application, such as:

• Consider co-signers or guarantors who would be legally responsible for the lease obligations. This practice is common for young adults in college or newly graduated.
• Evaluate alternative income sources such as investment income, retirement benefits, government assistance, savings, or alimony payments.
• Assess rental history and creditworthiness as verification of financial stability.
• Require higher security deposits as a financial buffer in case of default.
• Conduct an in-person interview to gauge an applicant's credibility and reliability.
• Contact their past landlords to learn of their previous payment history.

Trends in tenant income verification for 2025

People have many avenues to earn money today. They don’t have to have traditional, full-time employment to be financially successful. It’s important to keep this in mind when assessing proof of income for renting.

The gig economy and self-employment have allowed people to make money in non-traditional ways. Since there are methods to verify this income, you should give these applicants the same consideration as those with full-time jobs.

The digitization of verification and the need for these processes to be secure and automated is another emerging theme. You want to simplify the process so that turnaround time and approvals are faster. Technology offers this convenience, but not all systems are the same. You don’t want to compromise security for efficiency. The key is to find a platform that offers both, and that’s how RentSpree tenant screening works.

Income verification with RentSpree

Proof of income enables a safeguard against the risk of tenants failing to make rental payments. If this happens, it impacts your return on investment and can have costly consequences like eviction filings.

Making income verification part of your screening process is a must to prevent these risks. With RentSpree’s easy, reliable, and trusted tenant screening solution, you can capture the necessary information and documents to verify income within seconds.

‍Get started today.