When moving into your first apartment, you’ll quickly question some requests made by the landlord. Although most are understandable, many people miscomprehend the reason why apartment landlords ask for bank statements. After all, it’s highly confidential data, so is this even allowed?
A landlord can legally request information that showcases your financial stability (for example, a bank statement). By supplying this, apartment landlords can quickly verify your monthly income, total funds, and financial responsibility to guarantee the tenant can afford the unit.
Landlords want to make easy money and would like to avoid creating any lawsuits for non-paying renters. Additionally, they want to ensure you can physically pay for the apartment comfortably so you don’t fall into any financial difficulties.
It’s a common practice that you’ll need to show a bank statement when applying for rent in either a house or apartment. Therefore, you shouldn’t be worried about this request, as it’s something that almost all landlords do.
If you want to learn more about the reasoning behind property owners asking for bank statements, I suggest you become familiar with the below.
Why Do Apartment Landlords Need Bank Statements?
It’s common for new renters to suspect suspicious activity when a landlord asks for a bank statement, as the information is incredibly confidential.
However, it’s a relatively standard practice that most landlords implement when choosing a tenant. But why do they do this? Here’s what you need to know:
Monthly Income
The first and most prominent financial factor they’re looking for is average monthly income (usually over several years). By understanding this metric, landlords can quickly determine whether you can afford the rent payments each month.
Notably, they might not only request a bank statement to prove this. They could additionally ask for a breakdown of your income and where it’s coming from.
For example, if you’re employed and self-employed, you’ll need to declare how much income you’re receiving from each of these after-tax.
Total Funds
Another factor they’ll consider is the total funds within the account. Showcasing this isn’t as significant as your monthly income, but it’s certainly helping the landlord to decipher whether you’re a good candidate for the apartment unit or not.
The likelihood of multiple people asking to rent the same apartment as you are incredibly high. Because of this, the landlord would usually ask various possible tenants for their bank statements.
They’ll identify the candidate with the highest monthly income, total funds, and best financial responsibility when reviewing them.
By implementing this type of strategy, they can rent to tenants, which will unlikely cause them any problems in the future.
Financial Responsibility
Including the above, there could also be an evaluation of your financial responsibility. For example, if you get paid $2,000 a month, spending $1,900 on clothes every month doesn’t showcase immense levels of responsibility.
Because of this, the landlord can suggest that you’re not fit for their tenant requirements.
Therefore, it’s a good idea to implement a money management strategy into your financial life before you initially apply for a rental agreement.
A plan that many people use worldwide is something called the 50/30/20. Which means:
- 50% of your income will go towards necessities (rent, utilities, insurances, gas, etc.)
- 30% of your income will go towards wants (new clothes, games, holidays, etc.)
- 20% of your income will go towards savings or debt repayment
If you want to undergo this saving technique, you’ll want to consider using an online calculator to make the process more straightforward.
Unusual Activity
Lastly, a bank statement can look excellent but also fake or fraudulent. Because of this, landlords might overview your bank statement to see if any unusual activity occurs.
Typically, they’re searching for large deposits or withdrawals, which can’t be explained. If they believe suspicious activity is shown in your bank statement, they might reject your tenant offering.
Landlords are looking at a bank statement to verify your financial well-being to confirm that you can afford to rent the apartment each month.
Because they get tons of applications for new tenants, why wouldn’t they choose the most stable one?
How To Improve Your Apartment Rental Acceptance Rate
In some events, tenants can get rejected from their rental proposal. It often happens because there are a ton of different tenants asking the landlord for a lease agreement.
However, how can you improve your apartment rental acceptance rate to ensure you receive the opportunity to rent an apartment unit?
- Offer to sign a longer agreement – Typically, a landlord will suggest a minimum loan agreement on a rental listing. For this example, we’ll say one year. Tell the landlord that you’ll sign a contract for a minimal rental period of 3 years if that’s the case. In most events, if you pass all background checks, they will choose you as the tenant.
- Pass all background checks – This is easier said than done and depends on your financial pass. However, if you can, start saving some dollars, improve your credit score, and make structured money management plans, which you can show your landlord to increase the chances of passing all the background checks.
- Be the first applicant – Being the first tenant to request an agreement will undoubtedly help. But it won’t necessarily improve your acceptance rate. What you’ll want to do, is get your foot in the door. Visit the unit, ask questions, and become friendly with the landlord.
- Have your documents ready – All of the above are excellent ways to enhance your acceptance rate, but you’ll need legal documents to verify all your information. Because of this, make sure you have them ready, so you’re not waiting for anything.
Currently, 39 million people in the United States rent apartments, which is forever increasing because of their popularity. Therefore, you’ll want to maximize your chances of getting accepted by implementing the above strategies.
After reading the above, you should have become knowledgeable on why landlords of apartments ask for bank statements.
They want to verify your financial stability to guarantee that you can continuously afford the apartment without falling into any problems.