Renting A Home When You’re Self-Employed

Being self-employed is a dream come true for many people, allowing them more flexibility in life and work than they could obtain from a regular job. Unfortunately, there are drawbacks to being self-employed, and one of them is it can be more difficult to rent a home. If you work for yourself and you're looking for a place to live, here are a few tips for convincing a landlord to rent to you.

Can You Pay the Rent?

In general, the landlord's primary concern is whether or not you can pay the rent on time every month for the entirety of your lease. To that end, they will typically require that your monthly earnings equal at least three times the rent. So the first thing the person will ask for is proof of income.

If you worked at a regular job, you would simply present copies of your paycheck stubs or W-2 form. As a self-employed person, however, you'll need to present records that show the amount of money your business generates, your take-home pay, and how stable that income is.

Most landlords will accept certified tax returns (usually the last two to three years is sufficient) and several months worth of bank statements showing regular deposits from your business. However, some landlords may accept or also require a certified statement from an accountant attesting to the amount of income your business is expected to generate the coming year.

Be wary of landlords who ask for more than this or for information that's not related to renting a home. For instance, some landlords have asked for credit card statements. This type of invasive snooping is often a red flag for problems you'll likely have with the person down the road.

However, it may be helpful to be willing to show contracts you have with your existing clientele or a few months worth of invoices to prove you have a storehouse of customers ready and willing to pay you.

Will You Pay the Rent?

Your credit will play a big role in the landlord's decision to rent to you, even bigger than if you simply worked for a company, so you can expect the person to pull a credit report. The Federal Trade Commission reported in 2013 that as many as one in four people had mistakes on their credit reports that could affect their scores. Therefore, take some time to ensure all the information on the report is accurate and up to date.

You'll also be expected to provide references from previous landlords. For convenience sake, it's probably best to have your previous landlord write letters of recommendations to avoid having people call them incessantly. However, providing the name and telephone number should suffice.

If your credit is kind of sketchy and/or your previous references aren't that glowing, then be prepared to furnish a co-signer who will guarantee the lease.

Are You Stable?

Lastly, the landlord will want to make sure you're not a flake who will just pull up roots and leave in the middle of the lease or that you'd rather be unemployed instead of self-employed. So they will look for signs of stability in your data. For instance, some landlords require that you've been self-employed for at least one to two years before they will rent to you. However, the longer you've been in business, the better they will feel about extending a lease.

It may be helpful to supply information that can bolster your case. For instance, if you were employed for 10 years before you struck out on your own, you could give the landlord the name and number of your previous employer.

Renting a home when you're self-employed can be challenging, but it's not impossible. It's a good idea to work with a real estate agent from a company like Sunworld Group Inc. who can help you find landlords that may amenable to renting to self-employed persons.