If you are thinking about renting an apartment or renting a house, you might be wondering what do landlords look for in your bank statement. There are a few things they might want to check to get a better idea of the money you have coming in and going out each month.
What Do Landlords Look for in Your Bank Statement
You might feel a bit uncomfortable showing your bank statement to your prospective landlord, but there are ways to do so without showing them all of your personal information.
So, let’s find out what they are really looking for and what they can and can’t do with that information.
Can Your Landlord Legally Ask to See Your Bank Statement?
Yes, they can.
Your potential landlord has the right to ask to see any financial information or documents that they feel they need to determine whether or not you will be able to make your monthly rent payments.
This includes your bank statement, your credit report, and your credit scores.
It is all part of the rental application process.
What they can’t do is discriminate against you and not rent you an apartment based on how you earn your income.
So what are they looking for?
A few things actually.
Your Monthly Income
If you work a regular job you can simply show the property managers your pay stubs.
But what if you work for yourself or own your own business?
You won’t have payment stubs.
This was true for me when I was trying to rent an apartment a few years ago.
I had no other way to show my income than to provide my bank statement.
To make matters worse, my income was coming into my bank account through drips and drabs.
I had small deposits coming in that added up, but they can in on a daily basis.
Even so, I was able to highlight all of the income and what it added up to.
That was good enough for them.
Keep in mind, however, that if you said you make $3,000 dollars a month and you can only show proof of income of $2,000 dollars you’re going to have an issue.
How Much Money You Have In Your Account
It’s not as if potential tenants need to show thousands of dollars in their bank account, but a landlord will want to see that you have some money in your account and the ability to pay your rent.
It is none of their business what you spend your money on, but if you’ve only got a hundred bucks in your checking account at the end of the month, they may worry that you won’t be able to pay your rent and that you aren’t managing your money well.
If you are super low on cash, one big emergency might mean you won’t be able to pay your rent on time.
This is something that your landlord will want to know.
If you don’t want them seeing what you spend your money on, you can use a sharpie to cover up that information.
Just be sure to leave the dollar amount visible.
You can do this as well on your income.
That’s what I did when I was renting that apartment and needed to show them bank statements.
I left it so they could see the deposits coming into my account but covered up where they were coming from.
It wasn’t an issue.
Your Financial Responsibility
Your landlord might also look at your statements to determine your financial responsibility.
This goes back to what I said above.
They want to know that you actually have a checking account and to make sure that you not only have the money to pay the rent once the rental agreement is signed but that you still have enough money left over each month to pay for other necessities.
Let’s face it, if it comes down to feeding your family and paying your rent, most folks will go with the food.
By looking at your bank balance and payment history they will have a better understanding of your financial situation, your employment history, and whether or not you will be a stable tenant.
Some landlords might also look for unusual activity in your bank statement.
This could be large deposits or withdrawals that are unexplained.
These could be a sign of illicit activity such as money laundering or criminal activity.
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Beyond Your Bank Statements
Keep in mind that looking at your bank statements is just one part of the screening process.
They will also do a credit check and dive into your credit report.
Property management companies will ask for more information than a property owner.
Proof of income will be a major factor in whether or not you are approved.
Also, your past rental history will come into play.
If you have been a good tenant in the past, see if your previous landlords will give you a letter of recommendations.
This will show that you don’t have an eviction history and are a good tenant.
This is especially helpful if you have bad credit or rocky credit history.
Some property managers will also check to see if you have a criminal record.
Keep in mind, landlords only want to rent to stable and reliable tenants. They don’t want to have to keep chasing you down for the rent which is why they do income verification in the first place.
Not to mention, the eviction process is long and drawn out, and expensive for a landlord, so they don’t want to rent to someone that they may have to kick out down the line.
You may find that your landlord also wants to know your bank account number. While they can’t access your bank account and take the rent money, if it comes down to a lease violation, a court order would let them take money directly from your account to cover a judgment.
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To Sum it All Up:
Landlords can ask for your bank account statements. They use them to help determine your financial history and that you have the money to make rental payments each month on time. You can cover up some of your bank details if that makes the process more comfortable for you.