By Robert L. Cain, Copyright 2022, Cain Publications, Inc.
Fraught with possibilities for fraud is information on the rental application of a gig worker, especially one type of gig worker. With their inability to provide much credible information, it can be difficult for us to be confident about their qualifications. Many exist in a kind of an employment shadow world on the edge of society. But that world grows ever larger Many, possibly the majority, of them are renters.
Zippia Research reports that this segment of the economy grew by 33 percent in 2020, with some 59 million American adults having done gig work that year, amounting to at least 36 percent of the population. According to the research by Zippia Research, “16 percent of US adults earned money through an online gig platform at some point in their lives,” with 9 percent earning gig income in 2020. By 2023, figure 52 percent of American workers will have worked as gig workers.
They contributed $1.21 trillion to the economy in 2020, around 5.7 percent of the US GDP. If overall statistics apply to them, more than 40 percent of them are renters. That’s being conservative because becoming a homeowner with gig income verification presents problems that wage workers and even business owners don’t have. We’ll look at those in a minute.
Who are gig workers? The definition has expanded to include people whom we wouldn’t have thought of as gig workers in the past. The definition includes of course Uber drivers, Door Dash drivers, etc., but now thrown in the mix are the people we normally think of as freelancers and contract workers such as writers, marketers, engineers, and professional photographers, people legitimately in business with that profession, and not just looking for side income. They present more uncertainty when verifying their rental qualifications.
Many people, especially with inflation running rampant, or wanting to save money maybe to buy a house, take gig jobs to work toward financial goals. They have verifiable work income with the gig money as an added attraction. A little more difficult to screen, they do have verifiable income.
Then there is the shadow world of gig workers whose primary income comes from Uber driving and delivering Door Dash food. It gets tougher to ensure that such an applicant is qualified and has told the truth on about income on an application. Add to that only four of the 10 verification steps might even work for screening them and only one offers even remotely dependable verification.
With a normal rental application, we can look at 10 items as evidence of adequate income. The applicant may show up with W-2s, 1099s, pay stubs, a letter from an employer, or even an unemployment statement or workers’ comp statement. What a gig worker might have are tax returns, 1099s, a bank statement, and a Social Security statement, the only document that’s difficult to forge.
Since they are not employees, there’s no employer to supply paystubs. The gig worker to keeps track of his or her own income, taxes, and expenses. If a gig worker presents a paystub as evidence of income, look at that as a red flag. A paystub may well have been forged and could fool the unwary landlord. If a gig worker presents a paystub and says he or she gets one from his “employer,” ask for an explanation from the applicant, but it will in most cases lack credibility. Chances are, we reject them out of hand. Even so, the company the gig worker contracts with may send a monthly statement, something easily forged, as well.
The three items they can present that could work to prove their worthiness to rent are a tax return, 1099s, and a bank statement. Each of those is so easy to forge they are unreliable for evidence. Here’s where we have to adopt the mantra, “doubt everything” and verify everything meticulously.
How then to verify the income entries on a rental application for the three types of gig workers? The first one, the workers who work as freelancers, contractors, artists, and such and whose work provides them with a livable income, is more reliable. They keep books, have business bank accounts, can provide tax returns, and can show 1099s to show who paid them and how much. They also have business cards and maybe even brochures. Here we can confidently take their income statement as verifiable. Just check landlord references, look up their business website, and call people they do business with.
The second category of gig worker is just about as easy. These folks have jobs or maybe businesses with verifiable income and just use gig income as extra money, say saving for a down payment. They have W2s, paystubs, and an employer with whom we can verify the information on the rental application. The gig income is a plus and needs to be verified thoroughly only if that income is required for them to income-qualify to rent a property.
The third one is people whose primary income is as an Uber, Door Dash driver, or something similar. Whatever evidence of income they state can only be considered risky. The rule of thumb with all rental applications is that the person must prove to the landlord’s satisfaction that the application is honest and accurate. It’s not up to us to show it’s false.
First, as with all applicants, they must prove who they are with a driver’s license, passport, or some other form of government identification that can’t be forged. And as with all applicants, they must prove that what they claim as income is true. With it so easy to create phony documents and with so many companies, such as realcheckstubs.com, offering to provide official-looking documents that say whatever their customers want them to say, we need to question every item on the rental application. Unfortunately, we don’t have any foolproof way to do that because the forgeries can look so real. Sure, look at bank statements, 1099s, and profit and loss statements. But those are so easily forged that we need to look at them with skepticism. If inclined to rent to the applicant, landlord and personal references that we can verify as accurate are our most efficacious and possibly only line of defense.
With the number of gig workers growing apace, and considering most likely most of them are renters, they will be knocking on our doors trying to get us to rent to them. Should we?
Written for Zip Reports where they do employment and rental screening.
Contact Robert L. Cain at email@example.com