Everyone dreams about being a boss. Well, there are a lot of good benefits to being self-employed, like being a small business owner, freelancer designer, or writer. You can easily set your own working hours, own flexible schedules and only do the projects you enjoy. On the other hand, most of self-employed people find themselves in unpleasant situation when they have to move out and seek a new apartment. Standard rental lease application is written for employees who can provide the supervisor’s contact, employment status and recent salary stubs.
Landlords want to make sure that all of their tenants will pay rent on time. Contractual work, in landlords’ eyes, means that you don’t have a stable paycheck every month, which is a huge risk to most of landlords. They just want to minimize the risk that tenants will not pay the rent. The biggest question every landlord will ask is “Can you pay the rent every month?” That’s it.
So, the key here is how to convince your landlord that you are able and willing to pay your rent every month on time.
You don’t want to deposit 6 months of rent up-front
Traditionally, the first choice is to tell your landlords “I can deposit 3 or 6 months of rent up-front.” If you say this, I guess most of the landlords will say “Yes, of course”. This is a risk-free strategy for property owners. But as a renter, you don’t like it, do you? In most cases, more than 30% of people’s monthly income goes towards paying the rent. Now, paying 6 months of rent in advance means a huge burden to your cash flow.
Don’t hire agents if you can find apartment by yourself
First, real-estate agents don’t like rentals. They don’t make a lot of money in rental deals. To close a rental lease, one agent has to bring a potential renter to visit several different places, without knowing that he will end up renting any of them. The commission agents can get from renting an apartment is a tiny portion of what they can get if they sell a house. So, most agents don’t even want to deal with rental side.In big cities, NYC for example, brokerage firms always train their new brokers with closing rental deals before they can get into buy-and-sell part, senior brokers deal with home buyers.
Usually agents/brokers don’t know more about the unit they are showing you, than you do. If you go with them to a new property, their only job is to open the door for you. Hiring an agent doesn’t increase your chances of getting into the apartment, it just increases your costs. You still have to go through the exactly same rental application and provide same documents. And your biggest issue still remains the same: “I am self-employed, without steady monthly income (which doesn’t mean I don’t have money in the account), but I still want to pass the screening process by landlords and get the lease.”
Some good tips:
Here is something you can do to put their mind at ease. Rental lease is negotiable. You can tell your landlord to check your previous rental history. “Make a phone call to my previous landlord, he/she will tell you how good I am and that all of my payments were on time.” You can also show them that you have a good amount of money in your saving account. Showing them your bank statement is much easier to do than depositing cash into landlords’ accounts, which will result in getting a lease.
Credit score shows how creditable you are and what’s your financial history. A good credit score will also help you a lot. It will make your negotiation process much easier. Another good way to prove your credibility is to find a co-signer, someone who will be responsible to pay your rent if you miss a payment.
Being self-employed is great, you are your own boss! Although it is great, sometimes it can be challenging but if you follow these few steps, renting an apartment shouldn’t be a problem.