While there are great benefits to being self-employed, like setting your own hours and working on projects you really enjoy, there are a few downsides to not getting a regular paycheck. Aside from the inconsistent income, you also have the added hurdle of proving your income when you want to move to a new apartment. This is something my husband and I are dealing with, because we both work from home.
The standard apartment application includes providing proof of current employment and copies of your latest paycheck stubs. So how do you get approved for a new apartment when you don't have either of those things? Here are a few things to do if you're self-employed and moving to a new place.
Seek Out Independent Landlords
Any landlord wants the best tenants to ensure the rent gets paid on time. But larger property management companies often have stricter policies and guidelines for renting to self-employed individuals, so it may be best to avoid the big complexes.
Opt for smaller, individually-owned duplexes or triplexes, where you can connect to an independent landlord. Their rules may be a bit more flexible, and allow you to apply for an apartment without a traditional paycheck. It's also a good idea to ask local contacts, friends, or family members if they know of any landlords who are open to self-employed individuals.
We have an appointment with a landlord who was introduced by one of our family members, and on top of being lenient with self-employed income, we may also get a discount on our rent because of our connections.
Enlist a Real Estate Agent to Help
Of course, a real estate agent can help you buy a new home, but they also come in extremely handy when you're looking to rent an apartment — particularly in a new city. It's a real estate agent's job to know the local laws, as well as contacts for landlords who accept self-employed applications.
They will be able to most effectively help if you share all the information about your work and lifestyle situation. I have a freelancer friend who had a difficult time finding roommates because they didn't want someone working from home all the time. I'm not sure why, but perhaps it's because many people view at-home freelancers as lazy or messy.
In any case, be up-front with your needs and explain how you work during the day. This will also help you be the most productive if you need a place that's quiet and free of outside distractions.
3. Keep Your Financial Records Organized
There are several things you will likely have to hand over to your landlord or apartment management company during the application process. So it's important that your financial records are accurate and organized.
Since you don't have the advantage of simply printing off copies of your latest paycheck stubs or W-2s, you'll most likely need:
Six month's worth of bank statements
Three year's worth of tax returns
Copies of long-term client contracts or big projects that prove consistent income
A healthy savings account that covers at least three month's worth of rent
References in writing from previous landlords
If you don't have a lot of extra debt, this will help your case as you become much less of a risk to the landlord. Obviously a few other things that will help are to dress appropriately when meeting the landlord, and sharing any other advantages you bring as a tenant (in my case it's the fact that we don't have kids or pets). Sell them on how great a tenant you are and make them feel good about having you in their apartment.
Finding a new apartment is a bit more difficult when you're self-employed, and you'll likely have to save up a bit more money to prove you're financially responsible. However, by using these tips you can find a new place that works for both you and your landlord. Happy apartment hunting!