Apartment Credit: How to Prove Ability to Pay if You Get Paid by Cash

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Apartment credit is difficult to prove if you commonly pay or are paid by tenants in cash. Paying by cash can make it difficult for a tenant to prove he is able to pay rent and for a landlord to determine whether to rent an apartment to a tenant with little to no rental history. In this case, both the landlord and tenant need to engage in special steps to protect themselves.

Below is an explanation of how to overcome these obstacles for both tenants and landlords.

Tenant’s Proof of Ability to Pay

The main concern for tenants that pay by cash is proving that they are able to pay and have a good rental record. Fortunately, there are ways for a tenant to overcome this difficulty.

First, to prove that a tenant has a good rental record, he can obtain a letter from his previous landlord stating that rent was always paid on time. This letter should also be notarized, if possible, or at least contain the landlord’s contact information and a description of the apartment. A tenant that is able to obtain more than one letter, meaning one from each prior landlord, will have a better chance of proving good apartment credit.

To prove that he is able to pay, a tenant should provide pay stubs or prior tax returns to his potential new landlord. These documents will show the landlord how much a tenant makes in a given pay period and demonstrate that he is able to afford the apartment he seeks. If these documents do not show enough income, a tenant should provide documentation of his savings or other financial resources.

Landlord’s Ability to Identify a Reliable Tenant

Still, even after being provided with this information and documentation, a landlord might be wary about renting an apartment to a tenant. This is because these types of evidence are not normally used by landlords when researching a tenant’s background.

The first step for a landlord to determine if a rental applicant is reliable is to run a background check. This check will tell a landlord whether the applicant has a criminal history. Similarly, a landlord can run a credit check on the applicant. While this report may be small because of the tenant’s tendency to pay everything in cash, it may still offer some insight into whether the tenant is reliable. A tenant with high amounts of debt or overdue bills may not be the best choice to occupy the apartment.

If the landlord has been provided letters and financial documents by a tenant as proof of his ability to pay, the landlord should contact the writers of the letters and financial institutions to verify the document’s accuracy. Any indication that the documents are false, such as a purported letter writer being unaware of a letter’s existence indicates that the tenant themselves may have written the letter. In this situation, the landlord should seriously consider whether renting the apartment to the applicant is a good decision.

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