How Do Landlords Verify Income?

Income verification can be a frustrating part of the approval process for a new rental, particularly since the income requirements are so high in some major cities (we're looking at you, NYC). But it's pretty much unavoidable if you want to land an apartment—so it's best to go in prepared. We'll walk you through the documents landlords use to check your earnings, common income requirements across the U.S., and how the process changes if you're a freelancer.

Why is income verification important?

Landlords need to make sure you’re going to be able to pay your rent before they sign on to have you as a tenant. Think of it this way: they have bills to pay, too. Your apartment building is likely financed through a mortgage in your landlord’s name. If you don’t pay your rent, they can’t pay their mortgage. Plus, eviction sucks for everyone involved. Gambling on whether someone can afford rent doesn’t make fiscal sense for landlords or tenants.

What documents do landlords use to verify income?

Income verification can come from a variety of different places, so be prepared for at least two (or more) of the following to be requested by a potential landlord:

• Credit check
• Tax returns
• W2s
• Pay stubs
• Bank statements
• A letter from your employer
• Proof of government-funded income, like unemployment, pension, or disability payments

Some are more commonly requested than others—you’ll pretty much always need to do a credit check and supply pay stubs. The others are more likely to be requested if the landlord is having a tough time actually verifying what you make on a regular basis.

And don’t worry too much about privacy—under the Fair Credit Reporting Act, any credit reports or other screening reports legally can’t be shared, and must be trashed in accordance with rules set by the Federal Trade Commission.

What are “income requirements” for an apartment?

To rent an apartment, you’ll need to meet the building’s income requirements. Landlords typically require that your annual or monthly income hits a certain threshold. Or, if you have roommates, then the collective income of everyone living in the apartment needs to meet the income requirement. That’s why so many people in New York City, for example, have roommates—the combined annual income of everyone in the apartment must be at least 40 to 50 times the monthly rent. That means if you want to rent a place in New York for $2,500 a month, you’ll need to make $125,000 per year.

Other cities are a little more relaxed about income requirements. In general, landlords want your monthly income (or the combined monthly income of everyone living in the rental) to equal at least three times the rent. So that same $2,500 apartment would require you to earn $7,500 monthly, or $90,000 annually. Here’s a breakdown of common income requirements across several major U.S. cities:

• Chicago: Three times the monthly rent (per month)
• Dallas: Three to four times the monthly rent (per month)
• Los Angeles: Forty times the monthly rent (per year)
• Philadelphia: Three or four times the monthly rent (per month)
• San Francisco: Three times the monthly rent (per month)—but since San Francisco has such a high cost of living, some landlords are more flexible about these requirements
• Seattle: Three times the monthly rent (per month)

Why do I have to earn so much more than the monthly rent?

Although rent may be one of your biggest monthly expenses, it certainly isn’t your only one. Maybe you have student loans that you’re paying off, or monthly car payments. You’ll need to budget for food, renters insurance, and transportation costs. And, of course, there are always unexpected expenses—medical expenses (maybe for you, or maybe for a pet) or replacing a broken phone or computer. These are all reasons why landlords set income requirements so high. They want to make sure that, even with everything else you pay for each month, you can still comfortably afford rent.

How do apartments verify my income if I’m a freelancer?

If you’re a freelancer, sole proprietor, or just don’t have traditional income, verification can be trickier. You don’t have a typical W2 to show a landlord, so you’ll have to rely on—at minimum—several months’ worth of bank statements and tax returns. Landlords might also request to see copies of past 1099s, current client contracts, or even a certified letter from an accountant verifying you have steady income. If that still doesn’t convince a landlord that you can pay your rent, you may have to consider getting a guarantor to cosign your lease, or putting several months’ rent down upfront.

Should I put my gross or net income on the application?

When you apply for an apartment, landlords will be looking at your gross income—how much you make before tax—to see if you can afford their apartment. They may check your tax documents to determine what your net income is, but usually gross income is the standard when you're filling out a rental application.

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