More and more frequently, I am getting applicants who own property elsewhere that they are not selling and have chosen to rent. Their credit report comes up with their mortgage obligation on that property....how do you verify additional rental income to cover that expense? Do you
1) request copy of their lease with their tenant;
2) request information from their property manager
3) request income/rental verification from their tenant
I have been offered copies of their tenant's lease with the caveat that they had not run a credit report on the tenant. I don't want that information in my file on the tenant for security/confidentiality reasons.
I have been offered copies of their quarterly financial statement from their agent (quarterly?) showing income and expenses. I am more comfortable with taking that as evidence of their financial capability there are no identifying financial information on them.
Wallace S. Gibson, CPM * GIBSON MANAGEMENT GROUP, Ltd.
Central Virginia
LandlordWhisperer
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Wow! This is a tough one. It would appear to be a big risk based on the debt ratio. Your guess is as good as mine.
Jo
One problem is that this person could be renting the property for an adult child or other relative. But that may be impossible to prove. We look at a tax return if the property has been rented during the previous tax year. Most times, the renter that owns other property can afford both and you may be able to qualify them using both the mortgage and the rent in your ratios.