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Family Member renting advice: They want a tax return
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Clinically Insane
Join Date: Oct 2000
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My uncle is trying to rent a new apartment. It's only $1800 a month but pretty nice, corporate managed and upscale. He's concerned though because they're requiring from him not only three months of bank statements but also his most recent tax return. He has over $500K in liquid assets as a beneficiary of our family trust, and he tried to see if it would be sufficient to show proof of that. Nope, they also want his tax return, and he has an issue with that because he didn't have much income last year and was on unemployment after losing his job.
Any advice for him? We've already discussed sticking to his guns, that it should be sufficient to provide bank statements showing his assets, or arguing that requiring a tax return is an unnecessary invasion of privacy. Any other ideas?
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Last edited by Big Mac; Apr 29, 2012 at 04:15 PM.
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"The natural progress of things is for liberty to yield and government to gain ground." TJ
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Administrator
Join Date: Apr 2001
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Where is the apartment? City, where in the city, etc. Corporate management may have some quirks about "ability to pay" nowadays, but with half a mil LIQUID, he should be able to go to someone above the rental office and point out that his taxable income is hardly representative of his ability to pay.
You might also research the management company; some companies are great, others are poo. Knowing which way this one swings is important.
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Glenn -----OTR/L, MOT, Tx
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The family trust is hardly an indication of unencumbered money, depending in the number of beneficiaries and the type of liquid assets, the rental office could consider it an attempt of leveraging more credit than what's appropriate.
People are normally required an income of 3 times the renting cost. Maybe if he can show a personal bank account with 12x3x2000=$72k.
Or maybe show the tax return as a trustworthy evidence for the assets, which should have been reflected in the 1040, but only if previously determined that it helps at all.
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Clinically Insane
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As was explained by my landlord at one point, liquid assets are not a valid security.
Cash is quickly mis-invested, spent on misguided follies, or whatever.
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Clinically Insane
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Yeah, family trusts and various other assets are not particularly helpful in taking out a mortgage either, it's all about monthly income.
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Posting Junkie
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I have plenty of more important things to do, if only I could bring myself to do them....
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Mac Elite
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If he's currently employed, he can show them his recent pay stubs. A tax return isn't proof of current or regular income - and I'd think most management companies would prefer that over proof of last year's income or bank statements.
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Clinically Insane
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Originally Posted by The Godfather
The family trust is hardly an indication of unencumbered money, depending in the number of beneficiaries and the type of liquid assets,
Right, but I didn't mean to imply they were still trust assets. The $500K was distributed into his own account. I only mentioned he's a trust beneficiary to let you know where the money came from. But I understand what you guys mean by that not necessarily being sufficient, even though it seems hard to imagine that such proof of assets wouldn't be good enough to satisfy this type of requirement.
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Last edited by Big Mac; Apr 30, 2012 at 04:13 AM.
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"The natural progress of things is for liberty to yield and government to gain ground." TJ
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Proof of income, not proof of assets.
Don't want to show a proof of income? Don't rent or find another place that doesn't require a proof of income.
Your uncle can offer to pay a year of rent up front.
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Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
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Posting Junkie
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For $500K couldn't he just buy a place instead?
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I have plenty of more important things to do, if only I could bring myself to do them....
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Clinically Insane
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You could stick to your guns, but offer to put a few months worth of rent in an escrow account.
-t
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Clinically Insane
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Originally Posted by Waragainstsleep
For $500K couldn't he just buy a place instead?
He probably could, but that's not smart. Real estate prices are still dropping, and will continue to drop.
There is tremendous advantage in just renting, and being able to move quickly if you need to.
-t
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Professional Poster
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They're gonna run a credit check on him. Trying to hide his previous unemployment is counter productive. Did he rent before? What would really help is a letter from them saying he was/is in good standing.
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Clinically Insane
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They already ran a credit check: He's in the high 800s.
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"The natural progress of things is for liberty to yield and government to gain ground." TJ
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Clinically Insane
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This isn't financial/legal advice but general advice.
If you need to use the word "guns" with regards to your landlord, and he isn't even your landlord yet, this won't end well.
A different approach is called for.
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Originally Posted by turtle777
He probably could, but that's not smart. Real estate prices are still dropping, and will continue to drop.
There is tremendous advantage in just renting, and being able to move quickly if you need to.
-t
Depends on the market. Surely many houses will drop another 50% (extreme) through 2014 but the $25k-$50k you are going to flush renting over 2 years has to be greater than the depreciation of an equivalent average condominium.
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Originally Posted by subego
This isn't financial/legal advice but general advice.
If you need to use the word "guns" with regards to your landlord, and he isn't even your landlord yet, this won't end well.
A different approach is called for.
Stick to your Bible/beliefs/traditions against your financial foes?
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Clinically Insane
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If you need to use the word "foe"...
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Finances are war, the customer service rep is just a soldier of your adversary, and your guns are your privacy, your capital, your knowledge of the law, and your community's lobbyist.
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Why doesn't he just offer prepay the length of the lease?
That alone might be enough to get any savvy rental agent to start listening,
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Clinically Insane
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Originally Posted by d4nth3m4n
Why doesn't he just offer prepay the length of the lease?
Should also work, pretty similar to my escrow account idea.
In the escrow account, you might get small amount of interest.
-t
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Clinically Insane
Join Date: Nov 1999
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Originally Posted by The Godfather
Finances are war, the customer service rep is just a soldier of your adversary, and your guns are your privacy, your capital, your knowledge of the law, and your community's lobbyist.
Entering a rent contract with the attitude that your landlord is an enemy is a guarantee for hell on earth.
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Addicted to MacNN
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Originally Posted by Big Mac
My uncle is trying to rent a new apartment. It's only $1800 a month but pretty nice, corporate managed and upscale. He's concerned though because they're requiring from him not only three months of bank statements but also his most recent tax return. He has over $500K in liquid assets as a beneficiary of our family trust, and he tried to see if it would be sufficient to show proof of that. Nope, they also want his tax return, and he has an issue with that because he didn't have much income last year and was on unemployment after losing his job.
Any advice for him? We've already discussed sticking to his guns, that it should be sufficient to provide bank statements showing his assets, or arguing that requiring a tax return is an unnecessary invasion of privacy. Any other ideas?
If the last year tax returns hinder him perhaps providing a few years worth of tax returns could help. I don't know enough about American laws to offer much advice, and its more complicated as its different from State to State. Could a co-signer assist?
But this reminds me of a friend I have denied a $20,000 loan because he didn't have the approved income to qualify. He owns 6 houses clear title, 2 Million in cash and millions more in assets. All of it tied up in a ugly divorce. His rental income from the properties don't "COUNT" as approved income so even though he nets over 10k a month in rental income what the computer accepts is 0 dollar income. Was retarded and the pions at the bank couldn't make exceptions. The computer dictates everything.
This sounds like the case with what you are dealing with. Computer system or rules require a narrow acceptable proof of assets and income and exceptions could be difficult if possible at all even though he totally qualifies for it.
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Last edited by Athens; Apr 30, 2012 at 06:24 PM.
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Blandine Bureau 1940 - 2011
Missed 2012 by 3 days, RIP Grandma :-(
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Professional Poster
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Sounds like he should have had all that real-estate in a business from which he could draw a salary.
Just give them the tax return or go elsewhere.
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Clinically Insane
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Originally Posted by Athens
But this reminds me of a friend I have denied a $20,000 loan because he didn't have the approved income to qualify. He owns 6 houses clear title, 2 Million in cash and millions more in assets. All of it tied up in a ugly divorce.
Your friend doesn't seem very smart. How can you have all you assets tied up like this, nd not have something "stashed" away for emergencies that doesn't get automatically drawn into the divorce.
The bank is right: someone who "owns" millions, and still needs a $20,000 loan can't be trusted.
-t
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Clinically Insane
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Originally Posted by Spheric Harlot
Entering a rent contract with the attitude that your landlord is an enemy is a guarantee for hell on earth.
I had a landlord **** me out of a lease within 24 hours of having signed it. I could have "stuck to my guns" and sued him to get my lease reinstated. I'd have won too, with damages.
I didn't, because that would have been stupid.
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Originally Posted by turtle777
Your friend doesn't seem very smart. How can you have all you assets tied up like this, nd not have something "stashed" away for emergencies that doesn't get automatically drawn into the divorce.
The bank is right: someone who "owns" millions, and still needs a $20,000 loan can't be trusted.
-t
You mean to commit a crime? The money was needed to pay out some legal bills, and my point was about the inflexibility of banks and rental companies.
Originally Posted by subego
I had a landlord **** me out of a lease within 24 hours of having signed it. I could have "stuck to my guns" and sued him to get my lease reinstated. I'd have won too, with damages.
I didn't, because that would have been stupid.
I've been dealing with a landlord that's been trying to evict or drive me out since last November after learning I'm Bi and my roommate is gay. Tried to charge me parking fees, tried to kick my pets out, tried to a numerous other things and been to one dispute court already. Going back a second time as she gave me a new eviction notice last Friday.
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Blandine Bureau 1940 - 2011
Missed 2012 by 3 days, RIP Grandma :-(
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Clinically Insane
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Clinically Insane
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Originally Posted by Athens
You mean to commit a crime? The money was needed to pay out some legal bills, and my point was about the inflexibility of banks and rental companies.
Whatever it takes to survive.
If you own millions, but you have to borough $20k, you have structured your finances poorly.
-t
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Clinically Insane
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Originally Posted by Big Mac
Any advice for him? We've already discussed sticking to his guns, that it should be sufficient to provide bank statements showing his assets, or arguing that requiring a tax return is an unnecessary invasion of privacy. Any other ideas?
This isn't subsidized, is it? Seems weird to be asking for so much information. Usually a clean credit record and proof of income is enough. Certainly not a tax return.
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"…I contend that we are both atheists. I just believe in one fewer god than
you do. When you understand why you dismiss all the other possible gods,
you will understand why I dismiss yours." - Stephen F. Roberts
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Originally Posted by turtle777
Whatever it takes to survive.
If you own millions, but you have to borough $20k, you have structured your finances poorly.
-t
Must work different where you are from. Generally speaking when going through a divorce here all assets and finances must be reported or you risk this thing called Jail.... And its pretty hard to hide stuff from a spouse who knows where it all is....
Originally Posted by olePigeon
This isn't subsidized, is it? Seems weird to be asking for so much information. Usually a clean credit record and proof of income is enough. Certainly not a tax return.
A Tax return is a pretty good indicator of some ones proof of income for qualifying for acceptance. I've run into it as a requirement for loans. Also used to find out if there are any liabilities to the government from unpaid taxes since governments can freeze accounts for unpaid tax debt or seize income to pay debts. If some one has a tax debt they are high risk to rent to from possible bank action to recover that debt leaving the renter with no money to pay rent.
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Blandine Bureau 1940 - 2011
Missed 2012 by 3 days, RIP Grandma :-(
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Posting Junkie
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Originally Posted by turtle777
Whatever it takes to survive.
If you own millions, but you have to borough $20k, you have structured your finances poorly.
-t
Or that your assets are all being leveraged for other purposes. Or that there are other factors involved that require your finances to be structured in a way that would otherwise be undesirable. Or that credit is cheap and you'll be financially better off with $20k of relatively low-interest debt compared to liquidating other assets and sacrificing whatever long-term gains you might have gotten from them.
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Clinically Insane
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Originally Posted by nonhuman
Or that your assets are all being leveraged for other purposes. Or that there are other factors involved that require your finances to be structured in a way that would otherwise be undesirable. Or that credit is cheap and you'll be financially better off with $20k of relatively low-interest debt compared to liquidating other assets and sacrificing whatever long-term gains you might have gotten from them.
Uhm, I'm not exactly sure what your point is.
Are you trying to tell me it's smart to invest millions of dollars in a way that leaves you that exposed that you need a $20k loan ?
It's NOT smart. You should always have some cash, readily accessible, and be prepared for the worst.
-t
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Posting Junkie
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Originally Posted by turtle777
Uhm, I'm not exactly sure what your point is.
Are you trying to tell me it's smart to invest millions of dollars in a way that leaves you that exposed that you need a $20k loan ?
It's NOT smart. You should always have some cash, readily accessible, and be prepared for the worst.
-t
I'm saying that it's more complex than that. Depending on your situation it might actually be the best way to go; i.e., you wouldn't have those millions of dollars at all if they weren't so invested. It's smarter to have millions of dollars in highly leveraged assets than it is to have neither the money nor the assets.
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Originally Posted by turtle777
You could stick to your guns, but offer to put a few months worth of rent in an escrow account.
-t
I would suggest a modification of this. If your relative still doesn't have a job then he's going to be paying for the rent out of his trust fund distribution anyway. So why not just put up an amount equal to the entire lease term's rent into an iron clad escrow account that gets distributed to the landlord monthly? I certainly wouldn't pre-pay up front because that gives the landlord no incentive to address any maintenance issues on a timely basis. But if the landlord won't go for that then clearly they have other motivations for wanting tax returns. To which your relative should politely suggest they kiss his ass.
OAW
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Side-way topic, what is renting like in the US. I imagine its different from state to state but what protections are there for renters in general. I read comments like "no incentive for timely repairs" and it sounds like there is little in laws to protect renters.
@Turtle777 Frozen assets, means frozen. Unable to access due to legal proceedings. Stocks, Bonds, Cash, property, foreign investments untouchable. The court controls and manages everything.
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Blandine Bureau 1940 - 2011
Missed 2012 by 3 days, RIP Grandma :-(
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Originally Posted by Athens
Side-way topic, what is renting like in the US. I imagine its different from state to state but what protections are there for renters in general. I read comments like "no incentive for timely repairs" and it sounds like there is little in laws to protect renters.
Tenant laws are different from state to state, or even city to city.
Usually residential rentals have more rights than commercial rentals. With residential rentals, it's usually the landlords responsibility for repairs. Not so with commercial rentals. The lease agreement would specify the details of the repairs and timeframe which repairs are done. The only thing urgent is probably plumbing issues or a leaking roof.
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Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
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Clinically Insane
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My uncle got his lease. Thank you for all the responses.
There are a lot of renter's protections in the US, Athens, but you're right it does vary from state to state and even by municipality.
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"The natural progress of things is for liberty to yield and government to gain ground." TJ
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Clinically Insane
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Originally Posted by Athens
Side-way topic, what is renting like in the US. I imagine its different from state to state but what protections are there for renters in general. I read comments like "no incentive for timely repairs" and it sounds like there is little in laws to protect renters.
Here in Chicago proper, there's a two-page list of tenants' rights.
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Originally Posted by Big Mac
My uncle got his lease. Thank you for all the responses.
There are a lot of renter's protections in the US, Athens, but you're right it does vary from state to state and even by municipality.
Did he have to submit a tax return? What happened? You can't blueball this thread like that. < >
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Clinically Insane
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I'll have to ask him if he submitted his return. I think he did but I'm not sure because he didn't mention it specifically, but he said that he got to see one of the managers and she was very, very nice. He did say they requested the first month's rent be a cashier's check, however, which is strange.
Edit: I asked, and yes he did submit his return along with a copy of his brokerage statement.
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Last edited by Big Mac; May 2, 2012 at 02:19 PM.
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"The natural progress of things is for liberty to yield and government to gain ground." TJ
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