How To Rent an Apartment With 1099 Income

What is proof of income?

Your proof of income is a document that states, “I make this much.”  Apartment owners and property managers use this to verify how much you can pay per month before agreeing to rent to you.

No one wants the hassle of evicting you, and you don’t want to be evicted. Showing that you have steady income keeps this from happening in most cases.

What can you provide as proof of income for an apartment?

While the most common proof of income is your pay stub or an offer letter from an employer, self-employed people have access to alternative proofs of income.

If you work multiple jobs or have a combination of W-2 and 1099 income, you might need to show a combination of the following forms. 

Pay stubs 

If you freelance on the side, the easiest way to show you make enough money is through your W-2 employer’s pay stubs. Pay stubs are usually found online through your employer’s payroll software. Or you can ask HR to give them to you. 

Note: You don’t have to manufacture pay stubs if you’re a 1099 or contract worker. Fake pay stubs can actually harm your case, since the housing provider will probably want to verify them. 

Offer letter

If you’ve just started a new W-2 job, then you can use your offer letter. This document from your employer states how much you’re going to make at the job. 

Tax returns 

If you’ve been freelancing for long enough, you can use your annual tax return to prove how much money you made last year. 

If you have multiple income sources, your tax return, also known as Form 1040, should show everything from both your day job and your side hustles. It even works if you got paid in cash and reported those earnings on your taxes.

What part of your tax return is needed for proof of income?

For the purpose of getting an apartment, what apartment owners care about is your total income, found in line 9 of the form. That’s the total amount you made before tax deductions are taken out.

If you have any 1099 income, though, you don’t want to pay taxes on your entire gross income — and you don’t have to. As a business owner, you’re able to write off all the expenses you pay to do your freelance work. That means you get to subtract them from your gross income, only paying taxes on what’s left. 

For example, pretend you made $50,000 from freelancing and spent $10,000 on the software, contractors, and home office expenses you need to keep your business running. You’ll use the entire $50,000 to qualify for an apartment, but you’ll only have to pay taxes on $40,000. 

You can use Keeper to track these write-offs, then file your taxes. And if you WFH out of your new apartment, the app can even help you write off part of your rent once you’re all settled in.

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Profit and loss statements 

Profit and loss statements are financial documents that analyze your business’s revenue, cost, and expenses over a period of time. They’re a good indicator of how a business is doing.

You can use this document, if you have it, to verify your income for rent purposes. 

1099 forms 

1099 forms are tax documents that show the IRS how much you earned as a freelancer. The two types that work best as proof of income for an apartment are:

• 1099-NECs showing what a company paid you for freelance services over the course of the year
• 1099-Ks showing how much you got paid through apps like PayPal 

If you don’t have your tax returns, you can substitute your 1099s to prove your self-employment income. But unlike with W-2 forms, you might have to collect quite a few of them to ensure you’re meeting the apartment’s income requirements — especially if you work with multiple clients who pay you a relatively small amount each.

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Invoices

Since you send these out to clients with the intent to get paid, you can use invoices as proof of income. Consider using paid invoices for this, from something like a Square report. Sadly, we all know that some of them end up being late — or end up going unpaid!

Be prepared to provide a whole year’s worth of invoices, from January onward, to show that you’re making consistent income. 

Bank statements 

Yes, you can also use your bank statements. This can be a good way to account for cash payments from freelancing, which won't always be reflected on your tax forms. 

Generally speaking, you’ll want the last six months of bank statements printed and ready to go when signing a lease. This will show your income over time. And while that can vary (believe me, as a fellow independent contractor, I know how much things change), you’ll be able to give your potential landlord a general sense of what comes in every month.

5 ways to make sure you get an apartment if you’re self-employed 

Feel like going the extra mile? Me too. Here are some tips and tricks to really land it with your next landlord. 

#1: Have your previous landlord write you a letter

If you’re in good standing with your previous apartment, ask your landlord to write you a letter of recommendation. 

Personal recommendations can go a long way for renters, especially if you’ve always paid your rent on time and in full. The letter doesn’t have to be long. To make it easier on your prospective landlord, you can give them a template to tweak and send over. 

Here’s one that I recommend using:

Dear LEASING OFFICE, 

Moriah has lived in our apartments for NUMBER OF years, from THIS DATE to THIS DATE. She’s always paid her rent on time, and in full. She was prompt with maintenance requests and always handled communication professionally. I appreciated having her as a tenant. 

Thanks, 

LEASING AGENT 

Obviously, you’ll want to personalize it to suit your needs. But that’s a basic template. It doesn’t have to be long, and it shouldn’t rave about you. It just needs to talk about how reliable you were as a tenant. 

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#2: Have someone cosign your lease 

If you’re unable to get an apartment on your own, consider co-signing your lease with someone, like a family member or friend. Ask someone that you trust, and who — more importantly — trusts you. 

A cosigner won’t move in with you, but will establish to the leasing agency that:

1. You’re going to pay your rent
2. You have another person who is backing you saying that you’ll pay the rent

If, for whatever reason, you don’t pay the rent, then your cosigner will be on the hook for it.

The apartment complex will consider both of your incomes when establishing whether or not you’ll be allowed to rent at their place. If your cosigner has W-2 income, you’ll have an easier time establishing proof of income with their pay stubs, and your income will be less necessary. 

#3: Get a roommate

One step up from a cosigner is a roommate. Roommates are great, because they bring more stability and make it cheaper to get housing versus renting an apartment alone. 

You’ll want to room with someone you’re compatible with, because that’s a big commitment to another person. But if you find someone you room well with, you’ll:

• Save a lot of money
• Give your landlords more peace of mind
• Have companionship during your day-to-day life 

#4: Bring cash with you 

Cash is king. When you apply for your apartment, bring enough cash to cover:

• Your first month’s rent
• Your last month’s rent
• Your security deposit in cash

You can even offer to pay a few months ahead of schedule to prove that you’re good on the rent. 

This might not always do the trick. But it can help your case as a potential tenant to bring the cash to the interview, if that's part of the application process.

#5: Rent from mom-and-pop landlords 

While not always the case, sometimes renting from a small independent landlord instead of a big company allows you slightly more flexibility. 

For example, when I was making $16 an hour as a contract worker in California, I found a woman who allowed me to rent for $800 a month, as long as I was also available to take her kids to school and back most days. 

Our arrangement, which wasn’t standard, allowed me to make ends meet. It could only happen with a small landlord. Eventually, I switched jobs, and she raised my rent to $1,000 because I wasn’t transporting her children anymore. 

How to budget for housing as a self-employed worker

When you’re renting an apartment with self-employment income — or income from both a day job and a side hustle — traditional budgeting methods might not work for you. I spoke with Bob Haegele, a fellow freelance writer covering personal finance, who had some great tips for renting on a non-traditional income. 

Tip #1. Keep housing to 25% of your income

 “If you rent mainly with a 1099 income, remember that it can be variable. This can create problems, especially if you spend a lot on housing,” Haegele said.

He recommends budgeting 25% of your average income over the past six months — or less — toward housing. That way, you can afford your housing even during lower-earning months. 

Tip #2. Keep additional costs in mind

Rent is just the bare minimum of what you pay for housing. While it might be cheaper even in the long run to rent rather than buy a house, Haegele recommends adding additional columns in your budget for utilities, trash, and other amenities. 

“Don’t forget moving costs, either,” he warned. “They can run you up into the thousands.”

Tip #3. Buy used to save money

 “Buying secondhand furniture and household goods could make your budgeting easier if you live on… 1099 income,” he said. Assuming your apartment comes unfurnished, “you could end up saving a lot of money buying secondhand rather than buying things new.” 

Ultimately, you might have to put together a stronger case for yourself than a traditionally employed individual. But you definitely can rent your dream apartment, as long as your papers are in order.