Ways for Landlords to Evaluate a Self-Employed Renter

Winston Rowe and Associates

Screening Self-employed renters naturally strike fear in a landlord’s heart. Sure, we admire their moxie. But what about paying the rent? What about the ebbs and flows of business? How can you be sure a dip in sales won’t leave them weeks or months behind on paying up?

The same goes for freelancers, gig workers, and all those other professionals without standard, 9-to-5 jobs. They’re worrisome.

Fortunately, you don’t have to take a leap of faith when these tenants come calling to your rental property. There are many ways to both evaluate a self-employed renter’s income and ensure they’re a good fit for your rental all in one fell swoop. Here are five of them.

1. Ask questions

Get to know the prospective tenant. Ask them about the nature of their business, how long they’ve been operating, what types of clients they work with, and more.

You should also find out about the tenant’s credentials, past employment, and education history. How qualified are they to be doing what they’re doing? How likely is it they have the connections and skills to keep their business afloat?

2. Research the business

You should also research the business. Do they have a website? Are they registered with your state? Are they licensed and insured? These are all indications a self-employed person is legitimate. (You might even be able to check out their pricing if you find their website!)

3. Request bank statements

If you want the most accurate depiction of the tenant’s income, ask for recent bank statements (business ones, if they have a business account). Pay careful attention to the deposits — how much they are, the consistency/cadence of them, etc. — and make sure the expenditures don’t outweigh the incoming cash.

Tax returns can work for verifying income, too, but these often don’t reflect the person’s full earnings — nor are they the most updated picture of their cash flow (they are annual, after all).

4. Pay special attention to their credit report

You’ll also want to pay special attention to the tenant’s credit. Look at the balances on any credit cards, loans, or other accounts they have out, as well as the monthly payment those come with.

You should also look carefully at payment history: Have they had any problems paying bills on time or in full? Are there any collection efforts or derogatory notes in their name? Have they had any bankruptcies or foreclosures? These can all give you insights into the tenant’s financial health — as well as any struggles they may be having.

5. Talk to past landlords

Finally, be sure to ask for the contact information for any past landlords the tenant has had. Call them up, ask about their payment history and, most importantly: Find out whether the landlord would be willing to rent to them again. Typically, if a landlord says “no” here, you’re best off moving to the next candidate. (Just make sure you’re abiding by fair housing laws and not discriminating!)

One last tip

If you’re not sure whether the tenant is a good fit, you can always consider requiring a cosigner, also known as a guarantor. This is someone who agrees to vouch for the tenant financially, as well as cover the rent if they’re unable to down the line.

13 Warren Buffett Quotes For Real Estate Investors

For guidance on investing in troubled times, good times and unclear times – there’s no better person to turn to than Warren Buffet. I’ve taken 13 of his most famous quotes and listed them below. And beneath each quote, I’ve translated it into practical advice for real estate investors like you. Let’s get going…

You must ask yourself. Am I investing in a market? Or am I investing in a DEAL? If the deal is right and your exit strategy is clear, then the market conditions become much less relevant.

13 Quotes From Warren Buffett (Translated)

1. “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.”

REI Translation: Today’s market fluctuations are your friend because they’ve scared off your competition … other investors. They’re also your friend because the fluctuations have caused there to be a flood of motivated sellers. And as any savvy investor knows, buying from motivated sellers is the only way to make it in this business.

2. “Only when the tide goes out do you discover who’s been swimming naked.”

REI Translation: Keep plenty of tools (investing techniques) in your tool belt so that you can adapt to a changing market. What worked best in 2006 doesn’t work best in today’s market. Today, we’re seeing first hand that those with only one investing strategy are taking a beating.

3. “Our favorite holding period is forever.”

REI Translation: To build true long-term wealth, you must buy and hold properties.

4. “Risk comes from not knowing what you’re doing.”

REI Translation: Those who don’t know how to properly analyze, enter, and exit real estate transactions think today’s market is risky. Those who fully understand the intricacies of creative real estate investing continue to participate and profit.

5. “I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”

REI Translation: Now’s the time to buy. In real estate and in life, it’s almost always best to act opposite to the herd.

6. “Wide diversification is only required when investors do not understand what they are doing.”

REI Translation: Naive people are putting their money into stocks, bonds, and savings accounts right now. Smart people continue to invest in real estate, and they’re picking up more bargains than ever.

7. “Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.”

REI Translation: If you’re concerned that you cannot sell for full value, then buy lower – at about 60% of value – and sell lower – at about 90% of value.

8. “We will reject interesting opportunities rather than over-leverage our balance sheet.”

REI Translation: Sometimes the best real estate deals are the ones you don’t make.

9. “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

REI Translation: If you’re going to hold a property long term, it’s far better to buy a wonderful house at a fair price than a dump at a bargain.

10. “A public-opinion poll is no substitute for thought.”

REI Translation: Most Americans think that now is a risky time to get into real estate investing. Do they know more than you? Most likely not. Only a handful of Americans know the specific techniques for profiting in today’s market. And that’s because they read articles like this, they buy real estate investment courses, they attend their local real estate investor meetings, etc. Most Americans get their “investing tips” from the daily paper. There couldn’t be a worse source. Do you think journalists know how to wholesale houses, do short sales, take over a loan Subject 2, etc.? I think not.

11. “The most important quality for an investor is temperament, not intellect… You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.”

REI Translation: Don’t worry what the masses are doing. Follow the advice of successful real estate investors, and use their techniques to profit in today’s market.

12. “You ought to be able to explain why you’re taking the job you’re taking, why you’re making the investment you’re making, or whatever it may be. And if it can’t stand applying pencil to paper, you’d better think it through some more. And if you can’t write an intelligent answer to those questions, don’t do it.”

REI Translation: Every deal must work on paper before it will ever work in real life.

13. “I really like my life. I’ve arranged my life so that I can do what I want.”

REI Translation: Remember, that’s what real estate investing is all about. Arranging your life so that you can do what you want to do when you want to do it.

10 Mistakes That Kill Real Estate Deals

Mistake #1: Bad Planning

When you make an offer on a house and it gets accepted and you put down your earnest money, you’re probably going to have about 2-4 weeks in between until you actually close on the property. Everything from budgets, schedules and Scopes of Work should be in place.

Mistake #2: Under Budgeting Property Repairs

It’s SO important to make sure that your contractor is on the same page as you are right from the start. You need to make sure that the product you are putting on the market is consistent with the neighborhood.

Mistake #3: Add-On’s

After you have put together your schedule, your Scope of Work and your budge, and you’ve started demo is NOT the time to decide you want to move walls around. If you decide you are going to move walls, that needs to be decided BEFORE you have finished your plumbing, mechanical, HVAC, etc.

Mistake #4: Missing the ARV

Figuring out what the correct After Repair Value (ARV) of your property is KEY. You need to figure out what sets your property apart from the other houses in the neighborhood – whether it’s got neighbors in the backyard or it’s wooded, the size of the lot, the finishes and fixtures, etc.

Mistake #5: Financing Costs

Sometimes I see when students put together their budget, they don’t factor in interest costs, paying points or paying for appraisals. They look at it like, “I’m going to buy $100,000, put $20,000 and sell it for $180,000, so that’s $60,000 in profit.”


You have to factor in your closing costs and financing costs, it eats into that $60,000.

Mistake #6: Holding Costs

This is another big mistake that newer investors make that can eat into your profits. This includes insurance, utilities, property taxes, etc.

Mistake #7: Contractors Missing Days on the Job

This is a very important thing to keep in mind – most of the time, your contractor is NOT working JUST for you, so you will constantly be fighting a battle to get them to dedicate the time to your project. Setting expectations with your contractor is very important so you don’t get behind on your schedule.

Mistake #8: Markup on Materials

It’s incredibly important to find a contractor who will estimate the cost of materials and have a clear understanding of your budget and how much you want to spend to avoid markups. Just starting out as a new investor, it might take a few

Mistake #9: Not Selling Your Property Quick Enough

You put a good property on the market, so it should sell itself and it SHOULD sell quickly. But sometimes, properties just don’t sell as fast as you expect them to. Days on market can kill a property. Make sure that when you go to sell, you are hiring an experienced, elite realtor who has been around for a while and has a great marketing plan of action.

Mistake #10: Your Buyer Flakes Out

What happens when you did an incredible job on your rehab, you list your property and it sells quickly, but then, your buyer flakes out?

People think when they get their property under contract, they are good to go and start dreaming about their profit money. DON’T make this mistake!

Real Estate Investing Mistakes Happen

Trust me, I know better than anyone that mistakes will happen regardless, especially if you are a newer investor just starting out. The biggest thing is to TRY and not to make the mistakes that cost you money. Every extra day that your rehab goes longer than planned, that’s costing you money.

Why people are getting evicted for calling 911

Contact Winston Rowe and Associates

In countless cities across the country, calling 911 can get you evicted. You, the caller, that is, not the person you’re calling the police on — all because of policies called “nuisance ordinances.”

In Maplewood, Missouri, one victim of domestic violence was forced out of her home after contacting the police because of the town’s particularly egregious rental restrictions.

Between September 2011 and February 2012, Rosetta Watson was assaulted several times by a former boyfriend, according to court documents, and on at least one occasion he allegedly choked her and refused to leave, forcing her to call 911.

Watson would end up calling the police on four occasions over six months, her legal complaint states. As a result, Maplewood deemed her a “nuisance” and revoked her occupancy permit, which is required to reside in the city. She ended up moving to St. Louis, where her abuser attacked her again; now terrified of calling the police, she took herself to the hospital.

The American Civil Liberties Union (ACLU) filed suit on Watson’s behalf against Maplewood, contending that its nuisance ordinance that penalizes people for requesting emergency services is unconstitutional. The city settled the case in September 2018 to the tune of $137,000 and promised to change its ordinance to adopt “broad protections for victims of crimes or those who seek emergency assistance” and keep the ACLU looped in on nuisance enforcement, among other things.

“I thought calling 911 would help stop the abuse, but instead Maplewood punished me,” Watson said in a statement. “I lost my home, my community, and my faith in police to provide protection.”

She’s not alone. While Maplewood’s specific law is somewhat unique — requiring its residents to obtain occupancy permits — the principle behind it is not. Hundreds of other jurisdictions across the country have “crime-free” policies of some kind on the books. They differ in exact wording, but the intent is to deputize landlords as police officers but with no judge, jury, or due process for tenants. Cities looking to punish or get rid of people they see as “nuisances” without having to charge them with a specific crime implement these policies, with the effect of criminalizing often legal behavior.

In practice, they’re often adopted to keep out minorities, lower-income people, and other marginalized groups. When Bedford, Ohio, was considering adopting one after an influx of Black residents, one local said at a city council meeting that he supported the ordinance because he didn’t want Bedford turning into another “Maple Heights and Warrensville Heights” — two majority-Black cities nearby.

Some nuisance ordinances and “crime-free” laws will designate a property a public nuisance, usually after police are called multiple times to respond to incidents in the same place. Under these laws, landlords are forced to act as an arm of law enforcement and face fines and other punitive measures if they are unable or unwilling to abate the nuisance. Landlords are sometimes pressured to evict tenants who are in any way involved with nuisance activity, regardless of whether they are the victim, the perpetrator, or simply associated with the victim or perpetrator of an alleged crime.

Another form these policies take is through “crime-free leases,” with addendums in rental leases that would allow or mandate eviction after sometimes just a single instance of alleged nuisance activity. Some cities mandate the use of these leases, while others incentivize them. These lease provisions are often enforced by the police, which pressure landlords to evict “undesirable” tenants.

However, the police have a great deal of discretion in when and how they penalize potential “nuisances.” Researchers have shown that this discretion has meant poorer residents, women, and people of color bear the brunt of enforcement.

“Crime-free” housing policies have proliferated.

Quantifying how many nuisance laws exist across the country and how often they lead to evictions is exceedingly difficult. Many localities don’t have their laws uploaded to the internet, and there’s no comprehensive way to search for “crime-free” clauses in leases.

In Ohio, researchers have found nearly 50 of these laws, and in Illinois, a self-described non-comprehensive list numbered roughly 100. Some researchers and advocates say nearly 2,000 localities have them, but it’s unclear how this number is being tabulated; it appears to originate from a group advocating in favor of such policies, an Arizona nonprofit called the International Crime Free Association.

In a Michigan Law Review article, Deborah Archer, a law professor at New York University, traces how these laws were adopted as part of the “expanding web of zero-tolerance policies” that criminalize “relatively non-serious behavior or activities” — most often among Black Americans — without having to find anyone guilty of any crime.

Crime is a real problem. People deserve to feel safe and secure in their communities. But there is a justice system for a reason — if someone is committing a crime, then police ought to arrest them and convict them in a court of law. Americans have constitutional rights that are meant to protect them from facing punishments without due process.

Further, the implementation of these laws reveals that often this isn’t about limiting criminal activity, it’s frequently about the type of person people view as undesirable neighbors.

“They want an extrajudicial process to get rid of [nuisances],” Park explained.

A comprehensive report authored by researchers at Cleveland State University and the ACLU of Ohio found that these laws are usually adopted when “residents express frustration with their neighbors’ behaviors and often perceive the city and police response to their complaints to be inadequate.” These frustrations they note are rarely to do with serious crimes but rather “annoying or rude behavior and their wish for a certain community character.”

Robert McNamara is a senior attorney at the Institute for Justice, which has sued Granite City, Illinois, over its nuisance ordinance. He told Next City that he believes these laws are “part of a broader contempt that government officials have for renters. … A lot of cities are hostile towards rental properties and their ‘less desirable’ occupants.”

Several researchers have pointed to the trend of cities adopting these ordinances as a response to demographic change, not burgeoning crime. Archer points to the example of Faribault, Minnesota, where the Black population rose 214 percent between 2000 and 2010, which led to residents complaining about an increase of crime, including drug activity and theft. However, Archer notes that “police reported that records did not support any claims of an increase” and that the chief attributed issues to “cultural differences.”

Mark Talbot, the chief of police in Norristown, Pennsylvania, he hadn’t seen “any evidence that this is a reasonable method of crime reduction.” He added that these laws “run counter to our mission. What about this is protecting? What about this is serving?”

Talbot has advocated for the elimination of these policies both in the cities where he has served and in other jurisdictions, citing reduced community trust in police: “Any police department will say we want people to call us when there is a problem. … You can’t both be mad when nobody calls and mad when they do call.”

Park, who has been leading the charge against nuisance ordinances from the ACLU, said that she has “never seen and there’s never been any studies or data … that show that somehow these ordinances make their communities safer.”

Nuisance ordinances are often in violation of civil rights laws and the Constitution

Challenges to nuisance ordinances fall into a few buckets: Fair Housing Act (FHA) violations, First Amendment violations, due process violations, and violations of the Violence Against Women Act. By and large, these challenges succeed.

“I can’t recall any instances where I’ve heard the challenges [to nuisance laws] defeated,” said Kris Keniray, associate director of the Fair Housing Center for Rights and Research.

Vox couldn’t confirm that challenges have been 100 percent successful, but the case of Somai v. City of Bedford exemplifies many of the ways nuisance ordinances have been found to violate the Constitution and various laws.

The complaint, filed by Beverley Somai and the Fair Housing Center for Rights and Research, details how the ordinance was implemented in Bedford — and that residents worried about the “mixture of the community,” as one man put it during the 2005 city council meeting where officials would unanimously adopt a nuisance ordinance.

In response, the mayor noted that “we believe in neighborhoods, not hoods” and that students walking down the streets “are predominantly African American kids who bring in that mentality from the inner city where that was a gang-related thing by staking their turf. We are trying to stop that.”

Comments like these bolstered the plaintiffs’ claim that Bedford’s law violated the Fair Housing Act’s protections against racial discrimination. Their argument is one the Department of Housing and Urban Development itself has clarified for localities, noting in 2016 guidance that a local government would be in violation of the FHA if their policies have “an unjustified discriminatory effect, even when the local government had no intent to discriminate.” The department specifically calls out the “selective use of nuisance or criminal conduct as a pretext for unequal treatment of individuals based on protected characteristics.”

This isn’t unique to Bedford’s policy: Sociologists Matthew Desmond and Nicol Valdez studied nuisance citations in Milwaukee over a two-year period and found clear signs of disparate treatment. Of the “503 properties deemed nuisances, 319 were located in black neighborhoods, compared to 18 in white neighborhoods,” they write. They also found that this was not because residents in these places were placing more 911 calls than other places.

The Bedford plaintiff also argued that the nuisance ordinance interfered with “Ms. Somai’s First Amendment right to petition her government for redress of grievances.” Essentially, the right to call 911 is protected by the Constitution.

This case also centered due process rights. Nuisance laws generally do not afford due process for tenants, as the legal dispute is between the city and the landlord — like an unmanicured lawn or a fallen tree. Often, tenants have no idea why they’re being evicted or are unaware that the police are enforcing a nuisance law against their landlord. And no conviction or even arrest is necessary for an individual to lose their home under these laws.

Somai’s complaint noted that Bedford’s nuisance ordinance “does not require any notice to tenants … nor does it give tenants an opportunity to contest” the allegations against them.

The suit highlights the protections provided by the Violence Against Women Act, which the complainants write “express a clear federal policy that is inconsistent with … the City’s policy of penalizing survivors of domestic violence.”

As is often the case with these types of lawsuits, the city settled, agreeing to repeal the law within 30 days and pay $350,000 in damages.

With nuisance ordinances, victims of violent crime rarely seem to be the object of concern. Rather it’s the irritation they may cause their more affluent neighbors that worries enforcers. Desmond and Valdez document the case of Sheila M., who had called the police several times after being “beaten” repeatedly. Her landlord outlined his plan on how to “abate a nuisance” in an email to the Milwaukee Police Department:

“We suggested she obtain a gun and kill him in self-defense, but evidently she hasn’t. Therefore we are evicting her.”