Renting to Students and Freelancers: What Every Landlord Needs to Know

Most landlords know exactly how to screen a W-2 employee. Two pay stubs, an employer call, run the three-times-rent math — done. But what happens when the applicant in front of you is a freelance designer, a self-employed contractor, or a college student whose only income is a financial aid check?

In this episode, we walk through exactly how to handle renting to students and freelancers — without guessing, and without exposing yourself to Fair Housing liability. We cover the specific documents to request from self-employed and freelance applicants, why average income and reliable income are not the same thing, and what to do when a student genuinely has little to no verifiable income of their own.

We also get personal — sharing stories from their experience as both landlords and as parents who cosigned leases for their own college kids — and what those experiences taught them about building a lease when the financial picture doesn't look like a standard employee's.

Plus: what lease guarantee insurance is, how it works, and when it might be exactly what you need to say yes to a strong applicant who just can't provide a traditional cosigner.

What You'll Learn in This Episode

• Why average income and reliable income are two very different things — and why landlords confuse them constantly
• The five documents to request from a self-employed or freelance applicant — and which one is the gold standard
• What to accept when a student has little to no income of their own
• How cosigners actually work — and why a letter alone won't protect you
• What lease guarantee insurance is and when to use it
• The federal Fair Housing baseline every landlord needs to know — including what's not federally protected (but may be in your city or state)
• How to structure a lease for roommates, cosigners, and freelancers who work from home

Episodes & Resources Mentioned
Episode 119: Roommates — Do We Recommend Them?
How to Place Your Ideal Tenant (Free 10-Page Guide)
Join our course waitlist: From Marketing to Move-In Course
Tenant Alert (tenant screening & lease guarantee software we use) 

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Transcript

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Introduction & The Non W-2 Applicant Problem

Stacie 0:00

We've co-signed leases for our own college kids, and we've required co-signers from the student tenants that we had in our Chico rental. So we know this topic from both sides of the lease. And over the years, we've learned something most landlords figure out the hard way. There's a big difference between a tenant who makes great money and one who makes it reliably. A freelancer can show you a tax return that looks amazing, but if they earn $40,000 in one big spring project and then barely anything the rest of the year, they may be lacking consistent income that can make paying rent on time an issue. So today, we're walking through exactly what documents to require, how to screen for real income stability, and how to structure your lease so you're protected, no matter who's signing it.

1:04

Welcome to Your Landlord Resource Podcast. Many moons ago, when I started as a landlord, I was as green as it gets. I may have had my real estate license, but I lacked confidence and the hands-on experience needed when it came to dealing with tenants, leases, maintenance, and bookkeeping. After many failed attempts, fast-forward to today, Kevin and I have doubled our doors and created an organized, professionally operated rental property business. Want to go from overwhelmed to confident? If you're an ambitious landlord or maybe one in the making, join us as we provide strategies and teach actionable steps to help you reach your goals and the lifestyle you desire, all while building a streamlined and profitable rental property business. This is Your Landlord Resource Podcast.

Stacie 1:53

Hey, landlords. Welcome back to the Your Landlord Resource Podcast. This is the podcast where we help self-managing landlords like you run your rental property business with confidence and professionalism. I'm Stacie Casella, and I'm here with my co-host and ever-so-wonderful husband, Kevin Kilroy. Kev, how you doing today?

Kevin 2:16

You know, Stace, I'm doing great. I mean, we have that one two-bed, two-bath unit we're struggling to get rented in Sacramento, but other than that, I'm all good.

Stacie 2:27

Yeah, I'm not sure what's going on with that unit. We joke and we call it the jinxed unit. Maybe the universe is trying to tell us something. See you guys, just because we are professional property managers and we think we do everything right for our units and tenants, we still encounter the same problems as everybody else. Anyway, that's off-topic for today. Today, we're talking about a tenant category that I think trips up a lot of self-managing landlords, and that's renting to students and self-employed or freelance tenants. And here's why this matters. If your applicant pool looks anything like ours, you've got people coming through your door who don't have a typical W2 job. Maybe they're a freelance graphic designer. Maybe they're a college student whose only income is financial aid. Maybe they're a contractor or a consultant or a small business owner. And the problem is most landlords screen everybody the exact same way: pull a credit report, ask for a pay stub, run the numbers, and they're done. But what happens when there's no pay stub? What happens when income is not steady month to month? So that's what we're digging into today.

Kevin 3:47

Right. And I be really clear up front. This is not an episode about avoiding these tenants. Students and freelancers can be excellent, reliable, long-term tenants. We're not telling you to steer clear of them. What we are going to cover is how to verify their ability to pay when the paperwork doesn't look like a typical employee's. You know, like what to do when a student genuinely has little to no income of their own, and how to think about lease structure for these tenant types, along with a few legal guardrails to keep in mind. And one quick note before we dive in: landlord-tenant law varies a lot from state to state and even city to city. Today we're gonna give you general principles that apply broadly across the country, but you've got to know your own state and local law on top of what we cover today. What's legal in one state may not fly in another.

Stacie 4:49

You gots to know what you gots to know. Anyway, so consider w- what we say today as general framework, and then go verify the specifics for wherever your properties are located. All right, let's get into it.

Why Average Income is Not Reliable Income

Stacie 5:06

So let's start with self-employed and freelance applicants because this is probably the bucket that confuses landlords the most. Here's the core issue: a W2 employee has income that's predictable. They make the same amount, same schedule, taxes are already withheld, and has an employer that you can call to verify. A freelancer or self-employed person might have made great money last year, but it didn't come in steady on a regular basis. So think about it this way: someone can show you a tax return saying they made $85,000 last year, and that sounds great on paper, but what that number doesn't tell you is whether they made $7,000 a month like clockwork or whether they made $40,000 in one big project in the spring and then almost nothing the rest of the year. Average income and reliable income are two very different things. And that's the distinction that you need to be screening for.

Kevin 6:07

Right.

The Freelancer Documentation Toolkit

Kevin 6:09

So here's what we actually ask for when we've got a self-employed or freelance applicant. First, we ask for the last two years of federal tax returns, specifically their Schedule C, since that's where self-employment income gets reported. Asking for two years lets you see a trend instead of just one snapshot. Second, 1099s, if they have them, especially if they work with a handful of regular clients. Third, recent bank statements, both personal and business if they keep them separate. We'd recommend at least three to six months, and honestly, the longer the window, the better, because that's how you catch seasonal businesses. If someone's income is, say, tied to landscaping or event planning, looking at just one month could give you a completely skewed picture. Okay, fourth, a year-to-date profit and loss statement, so you can see how the current year is trending, not just history. And fifth, if they can provide it, a letter from their CPA or accountant verifying their income. Now, this is really the gold standard because a CPA is putting their professional license behind that verification. It's not just a number on a spreadsheet that the applicant typed up themselves.

Stacie 7:35

Yeah, and that's an important point. None of these documents work well in isolation. A profit and loss statement without bank statements to back it up is just a spreadsheet. A bank balance only tells you what they have today, not whether that income is sustainable. A tax return tells you about the past, not necessarily about right now. So you really want the combination, the history from the tax returns, the current activity from the bank statements, and the trends from the profit and loss statements. Together, those three paint a much more complete picture than any of them alone. Now,

Adjusting Income Ratios, Reserves & Debt to Income

Stacie 8:14

here's a practical tool that a lot of landlords use for variable income applicants, and that's adjusting your rent-to-income ratio. Instead of the standard three times rent, some landlords ask for four or five times rent when the income is self-employed or freelance. And that's not about discriminating against a person. It's acknowledging that someone with variable income carries more risk, so you want a bigger buffer. Another option is requiring proof of cash reserves, say two or six months of rent sitting in a savings account or a money market account. That reserve is essentially a shock absorber. So if a freelancer has a slow month or loses a client or has an unexpected expense pop up, those reserves are what keep rent getting paid on time while they get back on their feet.

Kevin 9:13

And I'll add one more thing to keep an eye on. That's debt to income, not just income alone. Let's say you've got a freelancer making $70,000 a year. Sounds solid, right? But then they're also paying $700 a month on a car loan, $400 a month on student loans, plus they're paying their own health insurance out of pocket. By the time you add all that up, there might not be a lot of breathing room left for rent. Compare that, say, to someone making $55,000 a year with a steady job, employer-provided benefits, and a paid-off car. It might be lower income on paper, but it's actually the safer bet because their fixed expenses are lower. So don't just look at the top line number. Look at what's actually left over after their other obligations.

Stacie 10:12

So I want to jump in here real quick and let you all know that freelancers and digital nomads are tenants that we have absolutely dealt with in our midterm rental. Now, for the most part, we have contracted workers. Those consisted of travel nurses. I think we had a travel respiratory therapist, summer interns, people working in government for short periods of time and someone from the Athletics baseball team who stays for six months every time they're here when in season. Those tenants have verifiable income. And because they are short stays, we only need to verify the income for that length of stay. Now, digital nomads or self-employed tenants in our midterm rentals are a different story. We absolutely had to verify their annual income by looking at past tax returns. We had one person who was a digital nomad, and they owned a home that they were hoping to rent out as they traveled around to major cities in the US. But they were still responsible for that monthly mortgage on top of paying our rent. And I'll tell you, it's a lot more work to verify those tenants than ones with a contract or a stable W-2 job.

Kevin 11:28

Yeah. And one more thing to consider is that here in California, we have the issue of tenant protections. Which means that once someone is living in your unit, if you want them out, whether it be from not paying rent or lease violations, it is an absolute pain in the butt to go through the eviction process. There are a lot of hoops to jump through, and it can take a very long time. So this is why tenant screening, regardless if it's for a midterm or a long-term stay, is non-negotiable for us.

Student: How to Accept With No Income

Kevin 12:05

All right, so let's shift to students because this is a totally different situation. Most students simply don't have income that comes anywhere close to three times the rent. I mean, they might be working part-time, but it's rarely enough to qualify on their own. And that's not a red flag about their character, it's just the reality of being a student. So the question becomes, what can you accept in place of traditional income?

Stacie 12:35

Right. and there's a few things you consider. You know, things like financial aid award letters can show what's been allocated for housing, and scholarship documentation works the same way. If a student is receiving a stipend, say, you know, maybe they're a teaching assistant or they have a research position, that's verifiable income too. And some students can show savings or documentation of like a 529 plan or proof of ongoing parental support. But honestly, the most common, and frankly the most protective solution for student tenants, is to have them have a cosigner or a guarantor. And there's a, an important distinction here that landlords sometimes miss.

Cosigners, Guarantors, & Lease Guarantee Insurance

Stacie 13:22

A cosigner, which, you know, is usually a parent or a guardian, needs to be financially qualified just like any other applicant. We'd recommend requiring the cosigner's income to be at least five times the rent, not three. And why five? Because they've got their own expenses to cover in addition to the student that they're signing for and backing up financially. And the cosigner needs to run through your full screening process as well. Credit check, background check, you know, the works. A cosigner with bad credit or a history of evictions does not protect you. And here's the part that really matters. That cosigner has to actually be a party to the lease, not just write a letter saying that they'll help out if needed, 'cause a letter is not enforceable. If the cosigner is on the actual lease itself, they are legally responsible for unpaid rent, damages, and lease violations, the same as the primary tenant. And that's the difference between a real safety net and a piece of paper that means nothing if things go sideways.

Kevin 14:35

Now, what if a student doesn't have anyone available to cosign? Maybe their parents don't qualify or there's no parent in the picture to ask. So this is where lease guarantee insurance comes in, and it's worth knowing about even if you've never used it. There are third-party companies, there are several out there, they essentially act as a paid guarantor. The tenant or sometimes the landlord pays a fee, often it's a percentage of the annual rent, and if the tenant defaults, the guarantee company pays out the landlord. Similar to how a cosigner would cover unpaid rent. It really is a useful tool to have in your back pocket, especially for situations where a strong applicant just doesn't have a traditional cosigner available. Now, it's not free. The tenant or you have to absorb that cost. But it can be the difference between turning away a genuinely qualified renter and giving them a path to qualify.

Stacie 15:38

Yeah. And honestly, this is a great option to mention upfront in your listing or your application process as well. Letting applicants know that a guarantee service is an acceptable alternative to a cosigner can really widen your pool of qualified applicants without you taking on more risk. For us, we have a service available that is attached to our screening software called, I think it's like Lease Guarantee, I think that's what it's called. We use Tenant Alert to screen all of our applicants, and when it produces the report, it also grades the tenant on a score up to 100, with 100 being the perfect tenant. And with that scoring system, then it comes up with an offer for a lease guarantee that is discounted for the first seven days. After that, the price goes up significantly. And we have not had to use it as of yet, but it's always nice to have that in case it's needed. Okay.

Fair Housing Basics: What Federal Law Actually Says

Stacie 16:40

Now let's talk about legal considerations because I know this might be where people get nervous. And I be upfront here, we're not attorneys, and landlord-tenant law is genuinely different depending on where you own property. What we can give you is a basic national baseline, and then you need to layer your own state and local rules on top of that. So here's the federal piece. The Fair Housing Act protects against discrimination based on seven categories. That's race, color, national origin, religion, sex, familial status, and disability. That's at the federal level. Notice what's not on that list? Areas like occupation, employment type, source of income, or being a student. Those are not federally protected categories.

Kevin 17:37

But, and this is a big but, many states and cities have added their own protected categories on top of that federal list. Source of income protection is very common now, meaning a landlord can't refuse an applicant just because their income comes from, say, a housing voucher, disability benefits, or other public assistance. Some places extend protections further than that. So the practical takeaway is don't assume that because something isn't covered federally, it's automatically fine everywhere. You need to check your specific state and even your specific city because this is one of the areas where local law adds layers on top of the federal floor

Stacie 18:25

Yeah, right. And regardless of what your local law specifically protects, here's the practice that protects you everywhere, no matter where your property is. As landlords, you don't screen the person, you screen the documentation. And what that means is you create one written consistent set of qualification criteria, and then you apply it to every single applicant the exact same way. You're not saying no students. You're not saying no freelancers. You're saying, here's a documentation we require to verify ability to pay," and that requirement applies across the board. That approach protects you in basically every state because you're never making decision based on who someone is, you're making it based on whether they meet your standard criteria that's applied consistently.

Kevin 19:23

And that's a really important distinction. A couple of other things that vary a lot by state and are worth knowing exist, even though we're not gonna get into specifics today, are the security deposit limits for where your rental is located and how much you're allowed to charge for an application or a screening fee. Some states cap deposits at one month's rent. Some allow two to three, and there's a few that don't cap them at all. Application fees often have caps too, and are sometimes tied to actual screening costs. And then there's rent control. Annual rent increase caps exist in a number of states and cities, but definitely not everywhere. None of these are one-size-fits-all, so this is genuinely a go look up your state situation. Your state's apartment association or a local landlord-tenant attorney is going to be the most reliable resource for the specifics.

Stacie 20:25

Yeah, exactly. So big picture here, follow the federal law. But also know that your state and city may add more on top of that. And then build a documentation-based screening process that you apply consistently to everyone. Do that, and you're in a really strong position no matter where your rental sits.

Kevin 20:48

All right.

Lease Structure

Kevin 20:49

Let's talk about how to actually structure the lease once you've decided to move forward with a student or a freelance tenant. First, like we mentioned, if there's a cosigner involved, they need to be a named party on the lease itself, not just referenced in a side letter. This means their signature is on the document, and the lease language makes clear they're jointly responsible for rent, damages, and any violations.

Stacie 21:20

And second, if you've got a student rental with multiple roommates, which is incredibly common, make sure your lease explicitly states joint and several liability. And what that means in plain English is every roommate and every cosigner attached to that lease is responsible for the full rent amount, not just their individual share. So if one roommate stops paying or they move out early, the others and their cosigners are still on the hook for the whole amount until that lease ends. This protects you from a situation where one roommate disappears and you're stuck only being able to collect a quarter or a third of the rent from whoever's left. And for transparency, this is exactly what we had to do for every single one of our kids when they were in college. We cosigned their leases, and we knew we were responsible for the entire home, not just our kid's portion of the lease or the room or whatever damage that he did. And for the most part, it was fine. I think we had some unit damage to kid three's last house when he was at Clemson, and each parent just, anted up and paid their equal portion of it. And additionally, this is what we required when we owned the rental property in Chico that kid two lived in with his college roommates.

Kevin 22:42

And he was a stickler, so we never had anything to worry about. I mean, he treated that house like he was the owner. Did they have parties? Absolutely. Was there damage? You know, we never know because the house was always in good shape when we visited. And kid two is also very handy, so if there was anything that had happened, he would've repaired it before we found out.

Stacie 23:08

I'm gonna jump in here real quick and say, if you buy a student rental for your kid to live in while they're at college, maybe try to follow those roommates on Instagram because you will see stories and things that your own kid does not put up.

Kevin 23:25

Okay. Moving on. The third thing to consider for freelancers, which is something landlords don't always think about, is home-based work. Generally speaking, you can't prohibit someone from simply working from home. That's their right. But you can reasonably restrict things like regular client visits to the property, high foot traffic, structural modifications for a home office or a studio setup, signage, or any kind of commercial activity that goes beyond someone just sitting at a laptop. Spell that out clearly in your lease so there's no ambiguity about what's allowed and what crosses the line into an actual home-based business operation that wasn't part of the original agreement.

Stacie 24:15

All right. So for example, this can be someone who does nails or hair in the spare room of your rental. Do you allow their clients to be walking around the property? And think about the chemicals, because spraying hairspray on someone's head six to eight times a day will get on the floors, the walls, and the ceiling and can make cleanup or painting a nightmare if it's flat-based paint. Will they have to modify the plumbing to add a special hair washing station? Or think about a mechanic that works from your garage. Imagine the oil stains you're gonna have to deal with. Or a contractor who has multiple trucks and tools and machinery to store on your property. My brother was a contractor living in one of our family rentals, and he had all kinds of chemicals and flammable things in the garage. Is this something you wanna deal with at your rental? Because if not, you need to make sure your lease is clear that certain home-based businesses are not allowed. All right,

Managing These Tenancies

Stacie 25:18

let's talk about actually managing these tenancies once someone has moved in. Routine inspections matter more with this tenant group, particularly with the students, simply because they tend to be younger, less experienced renters. And we don't mean to knock them, we had three boys who lived away from home during college. I think we added it up and it was a total of 15 separate years between all of them, so we are acutely aware of how students live. But on the flip side, this is part of the college experience, right? Everyone has to learn how to be a good tenant at some point. But periodic walkthroughs help you catch issues early, things like unauthorized pets, unapproved roommates or subletters, or any property damage, and all before they snowball into bigger problems. So just make sure that you're following your state's specific notice requirements before entering. That's another one of those details that varies by state. Check your local laws on exactly how much advance notice that you are required to give.

Kevin 26:25

Now, for multi-roommate situations, it's worth spelling out expectations around noise and shared space directly in the lease or in a house rules addendum. Quiet hours, guest policies, or how shared spaces like kitchen and common areas are supposed to be maintained. Setting that expectation up front avoids a lot of friction down the road, both between you and the tenants and frankly, between the roommates themselves. You know, we did an episode on roommates and why we don't prefer them, but that was more for our current properties and not the student or college-based ones we used to own. In that episode, we did give some really good points on how to avoid roommate disputes, like having them use a roommate agreement. So if you are interested in owning student housing, maybe go back and give episode 119 a listen. You can find it at yourlandlordresource.com episode119. And of course, we will link that in the show notes.

Stacie 27:34

Right. I mean, the title of that episode is focused on why we don't like roommates, but as always, we did talk quite a bit about how to handle them if you do have them as tenants. And then for student rentals specifically, you want to make sure to keep the academic calendar in mind when you're planning turnovers. Most student leases end in May or June, so start marketing that unit early. And I'm telling you, January is not too soon. The earlier you're in front of next year's applicants pool, the less vacancy time you're looking at between school years. When each of the kids were looking to get out of the dorms, we were signing leases for the following school year in February of the previous year.

Kevin 28:21

Yeah. I remember the first time we had to do that, I was like, the next school year isn't for another seven months, but housing is very competitive, and if you have a rental in a prime college area, even if the current set of students living there are not renewing, you really shouldn't have a problem getting that property fully rented to a group of students not long after the new year hits. All right.

Key Takeaways & Resources

Kevin 28:46

Let's wrap up with the big takeaways from today. Number one, don't screen the person, screen the documentation. Build a consistent written policy and apply it to everyone. Number two, for self-employed and freelance applicants, combine tax returns, bank statements, and a profit and loss statement to get the full picture. And consider a CPA letter as the strongest verification. Number three, for students, financial aid documentation and stipends can help, but a qualified cosigner on the lease or lease guarantee insurance when a cosigner isn't available is usually your strongest protection. Number four, know the federal fair housing baseline, but don't stop there. Your state and city likely add their own protections and rules around deposits, fees, and rent increases, so go verify those specifics for your market. And number five, structure your lease intentionally with cosigners on the document, joint and several liability for roommates, and clear expectations around home-based work.

Stacie 30:02

Yeah, students and freelancers are not riskier tenants because of who they are. They're just tenants whose financial picture looks a little different on paper. Once you know how to read that picture properly, you can screen them with just as much confidence as anyone else. And if you want more on tenant screening in general, we have a free guide, and it's called How to Place Your Ideal Tenant. It's 10 pages, and it includes creating qualifying standards and policies, understanding marketing for your unit, the application process, performing background checks, and handing over the keys and move-in, and much more. You can get that free guide over at yourlandlordresource.com/landlordguide. We'll link that in the show notes. And if you're interested in our upcoming course called From Marketing to Move-In, which we will take a deep dive into tenant screening, along with marketing your property, how to handle showings, criteria, leases, and the move-in process, you can join the waitlist at yourlandlordresource.com/m2mwaitlist. That's Marketing to Move-In, so it's M as in Mary, the number two, then M as in Mary again, and the word waitlist. We'll link that in the show notes for you. We're hoping to have that out sooner than later.

Kevin 31:32

Yeah, and we will link those along with all the other podcast episodes mentioned here today in the show notes for you as well.

Stacie 31:40

All right, so that is our show for today. Thank you so much for taking time out of your busy schedule to listen to what we have to say about self-managing your rental properties. You guys, we are very grateful and humbled to be able to share what we know to help you in your journey. Now, if you enjoyed this episode and got some helpful information out of it, would you mind helping us out by leaving a kind review? We would really appreciate it. Even sharing this podcast with another landlord that you may know, that really is helpful as well. If you hear more, follow or subscribe to the podcast so that every week the episodes are downloaded right to your favorite podcast platform. We have newsletters, free guides, and a private Facebook landlord page. If you learn more, just check out the show notes for this or any of our episodes. Thanks again for sharing your time with us. We sincerely appreciate it. I think that's about it. So until next time, you've got this, landlords.