If a potential tenant is self-employed, such as an Uber driver, how are affordability checks completed?
I’m planning on using the service offered by OR for reference and affordability checks.
I’d expect income to fluctuate throughout the year and there is no income when on holiday or off-sick. Am I correct in assuming there is a higher risk in taking on someone that is self-employed and this needs careful consideration?
need 3 years of accounts as a minimum, no greater risk in my opinion, but then I am s/e and have done good
Taking someone who has a proven record of earning money through self-employment is a lower risk than taking someone who may be employed but does not live within their means.
Each applicant is an individual. I’ve always treated them as such.
@farouq1 its up to you whether to use a referencing co to do affordability checks.(probably needed if you want RGI) or to do yourself eg looking at bank statements getting credit ref checks etc.
If self employed more important they have insurance to cover ill health as no employer sick pay, and to have savings to cover monthly fluctuations in income.
Check rent is no more than 30% of gross income and what they have been paying in current place - you should see income and outgoings in bank statements. Average income in london for an uber driver is (according to google ai) 30k-36k so they can afforx 750pcm to.900pcm. In london that’s a room or a studio in some areas.
Consider RGI and legal expenses insurance in case you need to evict. Consider if they can offer a guarantor and whether guarantor can afford
Good luck
The risk comes from two places – their work drying up and they have an accident or get sick and can’t work. It’s the latter which really puts me off taking them on. They’re too exposed and so you’re too exposed.
employed can be made redundant. I know many well off S/E people making a lot of money. risk either way Always ask what their job is ,some are riskier than others
Agree. Makes sense to understand their situation employment, income, outgoings, history of paying rent on time, whether they have savings to cover slack periods, whether their work is seasonal etc. I’d think an uber driver likely always has work but they are unlikely to be rich or get a big pay rise either.
Best