Proof of income is documentation that shows a landlord that you can afford to pay rent for their property. This is a crucial part of their decision-making process as it is their investments on the line. In this blog, we will discuss the traditional and non-traditional options for showing proof of income. Keep in mind that any of the options listed below could be used alone or in combination with other documents. What alternatives the landlord may choose to accept or decline can vary, so be prepared to discuss acceptable resources.

 

What is Traditional Proof of Income?

Typically when landlords ask for proof of income, the most common documentation to prove this is pay stubs. Providing a minimum of two of your latest pay stubs will illustrate to the property manager how many hours you work, what company you work for and your salary or hourly wage. This is considered to be the most reliable proof of income. If you are self-employed and don’t have pay stubs, you can use tax return forms or get a Notice of Assessment (NOA). This will act as a summary of your income and can include certain tax information as well.

 

Alternatives for Proof of Income

Bank Statements

This alternative is easy to access and can be used if necessary. It illustrates that there is a consistent flow of income with regular deposits and withdrawals from the account. It also shows the total balance of available funds and can be a quick indicator to determine if the candidate can afford to pay any necessary fees or deposits. Renters and landlords should be cautious – this document can reveal the lifestyle habits of the prospective tenant and everything that comes in and out of their account.

 

Tax Returns

T4 slips and tax return statements are a quick way to identify a person’s annual income. This can also help confirm the amount earned compared to the pay stubs. Some landlords may ask for the last 2-3 years of statements to ensure steady income. When looking this over, make sure that the applicant’s name and the tax year are correct.

 

Letters from Employers

Depending on the relationship you have with your employer, this letter of employment can also double as a reference. Have them mention your employment status (ex. how long you’ve been with the company and any other roles you have had), your current position, the duties associated with your job and your hourly wage or salary. To help show authenticity, have it printed on company letterhead and signed by your supervisor and/or the HR manager. Landlords – these documents can commonly be forged, so reach out to the company and speak to someone who can confirm the applicant’s employment status.

 

Job Offer Letter

If you were recently hired and have not obtained any pay stubs, use your offer letter as proof of income. This will show landlords that you have the means to pay for rent but still need the official documentation of regular pay. This may need to be accompanied by a bank statement or additional forms to prove you can pay the initial deposits. Ensure the letter lists your name, position/title, start date and the expected income/salary. Landlords – similar concerns mentioned above with letters of employment can arise. Again, to verify this information, contact the company and speak to a manager or supervisor who can validate the letter and their employment.

 

Proof of Additional Support

If a candidate’s income consists of other means of financial support, documentation can be provided to prove they can afford to pay rent. Some additional support can be court-ordered – like alimony, child support or payouts – which makes them part of public record. This income can be verified by contacting local officials. Make sure to confirm if it is paid in monthly installments or as a lump sum as some additional documentation may be needed to guarantee rent can be paid long term. Other means of support like government assistance, disability insurance or investments have accompanying documentation to confirm their validity.

 

Guarantor Information

If the renter is in a position where they cannot pay rent at the current moment but have someone who can on their behalf, gather their financial information and proof of income. Since this is coming from a third party, the landlord may be stricter about the documentation they accept to ensure that rent can be paid.