What happens if your prospective tenant is a freelancer? When you’re a landlord, it’s pretty standard to have a minimum set of requirements that your tenants must meet to prequalify or apply to your property. Throughout the process, landlords will look at a tenant’s employment status and income to make sure that the applying tenant is likely to make consistent and on-time rent payments.
This process is especially important if your tenant is a freelancer. Why? Well…
First, let’s talk about what freelancers are.
Essentially, freelancers are self-employed contractors rather than an employee that works for a company. While freelancers may accept short or long-term contracts with companies, they are ultimately self-employed.1
Being self-employed doesn’t inherently make freelancers any more or less reliable than 9-to-5ers. It does, however, make the process of collecting and evaluating their financial and employment records a little tricky. Especially in cases where freelancers work more short-term contracts than long-term.
What should I look for if my prospective tenant is a freelancer?
If your prospective tenant is a freelancer, it will be important to look for patterns of consistent income intake and/or savings accounts that can demonstrate their availability to make consistent rent payments.
Consider: How long have they been a freelancer?
Typically, there is a learning curve when someone strikes out on their own to be a freelancer. It can take them a couple of years to figure out their process, good sources of income, what contracts to take, and how much money to charge. If you have an applicant who’s just starting out as a freelancer, you’ll want to ensure they can demonstrate an ability to secure and complete contract work to make consistent rent payments.
However, prospective tenants who have been freelancing for a few years are more likely to have worked out the kinks in their process and are likely to be more reliable in landing consistent contract work, but it’s still important to ensure they meet your minimum income and employment requirements.
Do they have patterns of consistent income?
Asking for proof of income is pretty standard fare for all tenants, but when it comes to tenants who are freelancers and their invoices or paystubs, be sure to line up the amount and dates. Are they consistently pulling in enough income to afford your apartment? Or, are there large gaps between jobs? Or jobs that pay significantly less than others?
Do they have patterns of consistent payments?
Ask your applicant for consistent proof of previous rent payments. If they’ve been a freelancer for a while and they can demonstrate consistent and on-time payments, it goes a long way to reassuring landlords that they are reliable tenants.
There might be unique cases where a freelancing tenant lived with family or a friend to save money to move out into their own apartment. In those cases, the answers to the next questions will be extremely important.
Do they have a savings account or backup income?
This question is important, especially if they’ve recently moved out of a property where they weren’t paying rent or if there are some gaps in their income. Maybe they have a large savings account for just that reason, or maybe they have a second job to supplement their income. In either case, it can be helpful to know how many months of rent the tenant has saved or if they can supplement their freelance income with a different source of revenue.
Do they have a guarantor?
A guarantor2 is someone with good credit and sufficient income to cover the prospective tenant in case they can’t pay rent. If you’re unsure about an applicant who freelances, you can ask for a guarantor to make sure that you’re covered in the event that the tenant is ever unable to pay rent.
Finally, do they have landlord references?
If your freelancer tenant seems to check all the boxes, one last step you can take is to ask for a landlord reference letter. Especially if the tenant has been a freelancer for a while and has a rental history, landlord references are beneficial to ensuring the tenant has a consistent track record of income and paying rent.
In general, if a tenant is a freelancer and can provide consistent documentation of income, as well as pass any other tenant screening you have, they can be as good as any other tenant, though their career looks a little different. In fact, if your tenant is a freelancer, their home most likely doubles as their office!