10 Methods for Tenants to Show Proof of Income

Once you’ve identified a great tenant, but before any contract is signed, you need to collect a rental application screen applicant. As part of this process, you should collect proof of income for an apartment, as well as references, and run an ID verification. 

For tenancy confirmation, it’s common for screenings to require a certain level of income – typically, this is three times the cost of the rent.

In this article, we take a closer look at 10 different proof of income examples that tenants can provide to show that they have sufficient income to afford to rent your rental property.

What is Proof of Income for Apartments?

Proof of income is a document or set of documents that a tenant provides alongside their rental application to verify their earnings. Landlords request this documentation to assess a tenant's ability to afford the rent. By reviewing a tenant’s income, employment status, payment history, and debt levels, landlords can evaluate whether the applicant is a reliable choice for their property.

Seeing a renter’s proof of income allows landlords to calculate the rent-to-income ratio. A common guideline is that rent should not exceed 30% of the tenant's gross income. Additionally, landlords should conduct a thorough credit check to ensure the applicant has a history of making payments on time.

10 Ways Tenants Can Show Proof Of Income For An Apartment

1. Pay Stubs

Pay stubs are the gold standard for providing income as they include many relevant pieces of information, including the employee’s name, employer’s name, gross income, contact details, and payment frequency.

A landlord should be requesting two to three months of pay stubs. This way, one can gauge the fluctuations that occur every month and see if the tenant’s income is sufficient for the unit. Bonuses and overtime may not be reliable enough to justify approving a prospective tenant.

Pros as a proof of income:

• Easy to read
• Easy to obtain
• Easy to verify

Cons as a proof of income:

• Easy to make fake pay stubs
• Overtime can indicate higher income
• Employers can’t verify employee income over the phone

2. Bank Statement

As bank statements are issued monthly, they give a detailed window into the financial activity of a tenant. The prospective tenant’s deposits, fees, withdrawals, and spending are visible to the landlord and contain extremely sensitive information.

Unlike the pay stubs above, this document should be the final type of statement you request. Due to sensitivity regarding private information, supplying this document may make the renter uncomfortable.

Pros as a proof of income:

• Easy to collect
• Display current information
• Landlord can see cash balance

Cons as a proof of income:

• Easy to make fake bank statements
• Time-consuming to analyze
• Sensitive information

3. Social Security Statement

The social security statement is given out by the Social Security Administration (SSA). This document gives an accurate view of the income of a prospective renter who is receiving checks from the government.

Using the tenant’s earning history, the SSA can determine the future benefits he or she will receive. However, although an official document, the renter should be made aware that payments from the federal government may be volatile due to changing laws in Congress.

Pros as a proof of income:

• Assist in viewing retiree income
• Show consistent income
• Easy to check if fraudulent

Cons as a proof of income:

• Fluctuating income from changing laws
• Tenant must request letter verification of earnings
• Unable to see tenant finance history

4. W-2 Income Statement

The W-2 statement is the standard document used by the government to verify income for tax purposes. This official tax document is an ideal verification as it comes directly from the employer.

Although perfect for confirming financial status, it doesn’t necessarily consider the tenant’s recent raises, promotions, or job changes.

Pros as a proof of income:

• Document from the employer
• Official government document

Cons as a proof of income:

• May not take into account the current status.
• Not a standard form for a renter to have handy.

5. IRS 1099 Form

In the event the prospective tenant acquires income via freelancing, this is a perfect proof of income document. A person who earns more than $600 a month from freelance work must fill out the 1099 form.

If the tenant wishes to use this method for verification, they will need to provide a few months’ worth of documents. A number of these documents are required so the tenant can prove they can have a stable income without working a conventional job.

Pros as a proof of income:

• Easy calculation to prove if the prospective tenants earn enough

Cons as a proof of income:

• Slight risk of a person who doesn’t have a consistent income.

6. Tax Returns

Tax returns (aka. 1040 Tax Return) are either supplementary documentation for a W-2 income statement or proof of self-employment. Additionally, the information on tax returns is also covered in the IRS 1099 form.

A versatile form, the 1040 gives insight into the tenant’s financial history from the previous year.

Pros as a proof of income:

• Verification of previous addresses, wages and social security numbers.

Cons as a proof of income:

• An incorrectly filed tax form can disqualify a prospective tenant who may have been approved

7. A Formal Letter From An Employer

A formal letter from an employer is typically easy for a renter to obtain and can offer valuable insights into the applicant, especially if it includes a reference to their work ethic. This letter provides a current snapshot of the applicant's employment status and some qualitative feedback. However, since a letter can be easily forged, it's a good idea to verify its authenticity by calling the employer directly.

Pros as a proof of income:

• Easy for renters to obtain.
• Works as a reference for the tenant’s character as well.

Cons as a proof of income:

• Easily forged.

8. Severance Statement

One of the more unfortunate methods of proving income is the severance statement. When people are laid off but looking for a short-term lease, this may be valid proof of income document. The information provides evidence of a lump sum given to the tenant, representing their pay.

As this is a one-time payment, it’s advised that the landlord tread carefully due to the uncertainty of the person’s financial position. Conversely, the large lump sum may be sufficient to pay for the entire short-term rent in a transaction.

Pros as a proof of income:

• Potentially a large sum paid up-front.

Cons as a proof of income:

• A very stressful timer is started as the prospective tenant looks for more work.

9. Profit & Loss (P&L) Statement

A business owner may be inclined to submit a P&L statement as their proof of income document. While tending to be supplemented with other documents, the P&L gives an overview of earnings and expenses. This statement can be pulled out from records by a bookkeeper.

Outside of the specific businesses, the tenant may have other avenues of income. The prospective renter could use the 1040 tax return to prove self-employment and the renter’s financial history.

Pros as a proof of income:

• Difficult to forge.
• Demonstrates ability to pay long-term rent.

Cons as a proof of income:

• Verification needed with bank statement and tax return comparisons.
• Time-consuming review proof of renter’s business

10. Workers’ Compensation Letter

Workers’ compensation offers financial support and medical benefits to employees injured on the job. For those receiving workers’ compensation, a letter outlining the lost wage payments can serve as proof of income. 

This letter confirms the receipt of benefits, demonstrating a steady income for a certain period. However, it is important to keep in mind that these benefits are typically temporary and may cease after a while.

Pros as a proof of income:

• Demonstrates a steady income despite being out of work.

Cons as a proof of income:

• Typically only temporary as a source of income.

Tenant screening with Landlord Studio

Checking proof of income documents is just one element of the tenant screening process. With Landlord Studio, you can run a tenant screening report straight from the app through TransUnion’s SmartMove service. This will give you a comprehensive report detailing your tenant’s credit score, rental history, and more.

• Full Credit Report with ResidentScore
• SSN Verification/Address History
• Nationwide Criminal & Sex Offender Search
• Nationwide Evictions Proceedings
• Bankruptcies

Running a tenant screening report with Landlord Studio is free for landlords.

Evictions can cost a landlord anywhere between $2500 and $3000, so performing sufficient background checks is a small price to pay to avoid such an expense.

Collect a full rental application, including verified proof of income documents, and run a comprehensive tenant screening report with Landlord Studio. Create your free account today and have complete confidence in your final tenant selection with tools designed for you.

Final Words: Proof Of Income For Apartment

Obviously, landlords don’t need to request a multitude of income verification documents—typically, two to three are sufficient based on the monthly rent.

For working individuals, pay stubs or a combination of a W-2 and a tax return are ideal. Elderly renters may need to provide a Social Security Statement, while injured workers might present a Workers Compensation Letter. For higher-end rentals, landlords might also consider asking for a bank statement.

Finding the right tenant for your property can take a comprehensive check into their finances, but considering the long-term agreement – a firm decision process is justified.

Learn more about finding and screening tenants with Landlord Studio →

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Proof Of Income FAQs

What Documents Do I Need to Rent an Apartment?

To rent an apartment, you generally need to provide proof of identity, such as a government-issued ID like a driver's license or passport. You will also need to show proof of income, which could include recent pay stubs, tax returns, or bank statements. Some landlords may request a credit report to assess your financial reliability. Additionally, you might be asked for rental history, which can be references or records from previous landlords. Be prepared to pay an application fee to cover background and credit checks.

How to Show Proof of Income for Rental Applications if Paid in Cash?

If you're paid in cash, you can demonstrate proof of income through several methods. Bank statements are useful as they show regular deposits that correspond with your earnings. Invoices or receipts documenting the work or services you provide can also serve as proof. Additionally, if you report your cash earnings on your tax returns, those returns can be used to validate your income.

How Do I Show Proof of Income Without Pay Stubs?

If you don’t have pay stubs, you can use other forms of documentation to show proof of income. Recent tax returns can provide a comprehensive view of your earnings. Bank statements are another option, highlighting deposits that match your income claims. Additionally, an employment verification letter from your employer, detailing your income, can serve as proof.

Why Do Landlords Ask for Bank Statements?

Landlords request bank statements to verify your income and assess your financial health. By reviewing your account activity, they can confirm that your earnings align with what you reported on your application. Bank statements also allow landlords to check for sufficient savings to cover rent and potential emergencies.

Do Apartments Call Your Employer?

Yes, apartments may call your employer to verify your employment status and income. This helps ensure that the information you provided is accurate and confirms that you are currently employed.

Can You Use Unemployment as Proof of Income for an Apartment?

Unemployment benefits can be used as proof of income if you provide the necessary documentation. Benefit statements or letters detailing your unemployment payments are essential. Ensure that the unemployment benefits are adequate to cover your rent.

Should You Reject Applicants Who Can't Provide Proof of Income for Rental Applications?

It is advisable to reject applicants who cannot provide proof of income. This documentation is crucial for verifying that the applicant can meet their rent obligations. Accepting applications without proof of income increases the risk of rent non-payment and financial disputes.