6. Your Self-Employed Tenant
Self-employed people and small businesses build economies and can contribute enormously to the growth of any country, but with self-employed people, one needs to check the correct documentation to ensure that they will be paying tenants.
Self-employed people often have no proof of consistent income to start with. One day they have work and the other they don’t. A pay slip from a self-employed person is not very useful as they write their own checks and pay slips to whatever suits them.
In this case, you should ask just like the bank does when giving credit, for at least 3 months of bank statements. You will find that some will offer to provide you with their invoice books to see their income. That is a very nice gesture, and you should look at the invoice books if they are willing to present it. However, the invoice book does not tell you if their customers are paying them, only that they have been invoiced. You need to know the persons cash flow. That will prove affordability. The banks do this all the time, why shouldn’t you? After all, the bank asked the same of you when they granted you a bond, now it is your responsibility to do the same if the tenant is to pay the bond or part of it through his rental.
In summary, check if self-employed people have sustainability and cash flow to pay you the rent.
If you are not happy with the proofs that the person provides, but you think the applicant could be a very good tenant, ask them to provide surety from someone else for the rent. And don’t forget to get the guarantor to fill in the application form if they sign surety, as you will need to do ITC checks. You need to check if the person signing surety is not already in a lot of trouble and not likely to be a good guarantor. Read more about this on point number 9 Non-Earning Tenants.
7. Good Impressions Can Fool You
Remember that good tenants try to make a good impression, but bad ones will do the same. There are a lot of articles emphasizing the impressions you get from the applicants that want to rent your property.
What these articles don’t emphasize is that often con men make a better impression than any honest and sincere tenant. That is why checking and verifying that the information given is correct is far more important than impressions.
8. All Must Sign – No Exceptions!
Beware of couples that only one of the two applicants is willing to sign on the lease agreement. You may end up with the tenant who signed leaving and the remaining tenant left in the property with no signed lease agreement. This is known to have happened.
The other thing is a single parent with minors that are aged 18 or over. Legally a person under the age of 21 needs consent from guardian/parent to sign a lease agreement.
Lets say you rent your property to a single mother with an 18-year-old son. The child did not sign the lease agreement, as he is minor. All of the sudden the mother decides to move to another city and the child is not willing to go because he has a girl friend and a job in this city. The mother leaves, the child does not follow and you have the child and his girl friend as tenants with no lease agreements. That could pose a problem if the child doesn’t pay the rent, not to mention that the minor doesn’t have a lease agreement in place at all.
In these cases, it is wise to sign the parent on a separate consent form that allows the child to lease your property. Then sign them both on the lease agreement.
In the next part we will be discussing how to safely rent your property to non-earning tenants, tenants from other counties with visas, and the best way to know if your potential tenant is a person you really want renting our property.
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Frequently Asked Questions
Both shareholders are deceased and had joint tenancy, who is entitled to the proceeds now?
By: janica73 | 30-09-2008
my (step) great gramma and my (step) grampa had joint tenancy in stocks or proceeds, they are both deceased. my (step) grampa didn't have any children, only step children. my gramma is also deceased. he has unclaimed property with the dept of revenue, who gets the proceeds?
I own property can i receive a sectin 8 voucher ...
By: valerie | 27-09-2008
I own property can i receive a sectin 8 voucher for myself and live in a home that will be paid for by the federal goverment?
Joint Owner Won't Pay Their Portion of Mortgage
By: rockhound98 | 23-09-2008
Own a property jointly and now the parnter in the property is refusing to pay thier portion of the mortgage. What actions can I take?
What are today's top investment property you're ...
By: Adier | 18-09-2008
What are today's top investment property you're currently in?
How to void joint tenants rights of survivors ship ?
By: scott1982 | 11-09-2008
what if i put my parnters name on the deed to my house because i did not wont my sister getting is so i did joint tenants with rights of survivors ship ...now we are breaking up is there a way i can get him off the deed.....i paid for the house with all my money and i can prove he did not put any money on the house
Rental Question
By: Dalrosa | 09-09-2008
due to market conditions the rent I am paying now compared to other homes for rent how can I discuss this with my landlord
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