Verifying a potential tenant’s monthly income is a vital part of the rental screening process. The most common way for tenants to show proof of income is by providing pay stubs, which show the tenant’s earnings, year-to-date payroll information, and deductions. Ensuring that a rental applicant can afford the monthly rent helps ensure they will pay rent on time.
Unfortunately, it’s all too easy to produce fake pay stubs.
Many online companies offer to create fake check stubs for a small fee. Some say they do this legitimately to help freelancers or self-employed people prove their earnings for rental applications. However, legitimate reason or not, the pay stubs are still fake. And it is impossible to know if the payroll information is genuine.
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How to spot a fake pay stub
The difference between a fake and a real pay stub can be challenging to spot. But a few tell-tale signs can help you identify fake stubs during the application process, such as errors, an unprofessional appearance, and missing information.
Here are some things to look out for to determine if the applicant has provided an actual pay stub or not.
1. Lack of professionalism
Look to see if the check stub appears professional. It’s rare for a real company to produce unprofessional documents that look fuzzy, contain spelling errors, or use strange fonts. Also, ensure that all the characters and decimal points are evenly lined up. A doctored pay stub could have text or figures that seem out of line with the rest of the information.
2. Round numbers
Are the applicant’s monthly earnings perfectly rounded to the nearest thousand? On the face of it, there may seem little difference between earning $3,000 and $2996.30. However, which figure seems more realistic? People rarely take home paychecks with a round number.
3. Letters instead of numbers
It’s not uncommon for counterfeit paycheck stubs to use a capital O in place of a zero. The difference may be subtle, but it could be a sign that the stub is fake.
4. Fake stubs usually have inconsistencies
Legitimate pay stubs always contain consistent information. Check that all personal information—name, address, and social security number—matches other official documents the tenant provides. There also may be information listed in multiple places. It’s vital to ensure it all matches up.
5. The figures don’t add up
If you have suspicions about a counterfeit check stub, do the math to see if the figures match up. It should be easy to calculate earnings and deductions. However, if there are miscalculations, it could be a red flag.
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Use other income verification methods
It may not be possible to tell a fake stub from a real check stub just by looking at it. Some check stub services produce counterfeit stubs that look like the real thing. If you are a landlord or property owner, it’s a good idea to use additional methods to verify income.
Here are some ways you can check pay stubs for genuineness to strengthen your income verification process.
Request a W-2 form
It can be helpful to request the tenant’s W-2. But, of course, it is possible to fake this form. However, it’s more challenging to produce a counterfeit W-2 than a pay stub. You can use the same methods for checking the tax statement as for the pay stubs.
Call their current employer
On the rental application, you should request employment references from the tenant’s previous and current employers. Typically, if the applicant knows you will call their boss, they are less likely to commit pay stub fraud.
Employers are not obligated to reveal precisely how much an employee earns. However, you can determine where they work and their position.
Of course, it is also possible to counterfeit a company letterhead. So always do an online search to verify the company’s address and contact number so you can speak to the actual employer.
Request bank statements
A tenant with nothing to hide in their finances will be able to provide bank statements. The statement should show the applicant’s wage as a deposit from the employer. This figure should match with the information on the pay stubs.
Ask the tenant to request Form 4506
To be sure of an applicant’s income and ability to make regular rent payments, you can ask them to fill out Form 4506. This application authorizes the IRS to release a copy of the applicant’s tax return to a third party—in this case, the landlord. You can also use this income verification method if someone is self-employed or works in the gig economy.
Run a credit check
You can also run your own credit check to verify the rental applicant’s ability to pay rent. If you use property management software, it should have a feature to request a credit report. You can also include this function in an online rental application and charge the prospective tenant for it.
Always do due diligence
Unfortunately, it may not be possible to spot every fake pay stub or fraudulent application. Therefore, it is crucial to carry out thorough and robust tenant screening.
On the rental application, you can insist on at least two forms of income verification. You can then verify that actual income is enough to cover the cost of the rent. It is also good to check their employer and previous landlord references and run a credit and background check.
Remember, it is harder to get a bad tenant out of an apartment than allow them to sign the lease. Trust your gut instinct and do your due diligence before approving a rental application.