Renting property can be a risky business if landlords do not take the proper precautions. An essential step that should never be overlooked is requiring solid proof of income from prospective tenants before signing a lease. This helps minimize the chances of tenants defaulting on rent payments or having to break the lease early due to financial troubles.
Many landlords follow the general rule that a tenant’s gross annual income should be at least three times the annual rent. However, verifying income has become more complicated in recent years as more people turn to non-traditional employment such as gig economy jobs, self-employment, cash payments, and early retirement. While these situations present challenges, there are still ways for landlords to confirm if potential tenants have the financial means to fulfill their rental obligations.
Landlords have several options when requesting proof of income from applicants:
- Ask for a PPS number which is required for registering the lease with the Residential Tenancies Board.
- Request references from previous landlords and current employers.
- Require photocopies of valid photo ID, evidence of residency, recent bank statements, and paystubs.
- Contact employers directly for references in the case of cash-only or self-employed tenants.
- Review assets like pensions and investments for retirees.
Thoroughly vetting applicants upfront reduces the risks of non-payment of rent and costly evictions down the road. It also ensures tenants are not stretching their budgets too thin just to pay the monthly rent. While some situations like gig work and cash incomes present challenges, a combination of the above verification methods should give landlords the confirmation they need.
Protecting the interests of both parties is imperative when signing a legally binding lease. Taking the time to confirm an applicant’s income shows due diligence on the landlord’s part. Don’t ignore this crucial step in the tenant screening process.
Property Management Dublin
KPM Group offers full property management services to landlords in the Dublin area. With over 30 years of experience, we handle all aspects of rental properties including tenant screening and rent collection. Our expertise helps take the stress out of landlording. KPM conducts thorough background checks on applicants including verifying income, references, credit history and past rental history. This reduces the risks of delinquent payments and vacancies down the road. We understand the challenges landlords face in today’s shifting economy. Our staff stays current on Irish rental laws and best practices to ensure your investment is protected. To learn more about our tailored property management solutions, visit KPM.ie or contact us to schedule a consultation.
