Operators who ask for extra assurance aren't trying to burden freelancer renters. They simply want financial stability from their residents and believe that full-time, traditional employment is the best way to secure it. This belief is behind the times. The days when workers would stick with a single employer from graduation to retirement are long gone. Layoff cycles are commonplace in today's corporations, even when the economy isn't in a recession. Just because a resident was employed when they signed the lease, that doesn't mean they'll still be employed six months later.

Multifamily operators cannot rely on traditional screening methods to determine an applicant's capacity to pay in this economy. More important than on-paper stability is the applicant's cash flow. By looking at an applicant's bank balances, cash flow trends, and ratio of discretionary to core spending, operators can get a much better sense of an applicant's ability to pay.

This cash flow-based approach to resident screening prizes financial behavior over paystubs. Freelancers may have instability in their income, but they can offset that instability with positive financial habits, such as conservative budgeting, investing, and keeping a healthy savings account.

Conversely, even traditional employees who rake in big, steady paychecks can cancel out their prodigious salaries with irresponsible spending and other bad financial choices. A recent PYMNTS study confirms that 36% of consumers earning more than $200,000 per year were living paycheck to paycheck in January 2024.

Multifamily operators skeptical of renting to freelancers will soon have to adapt. As the aging millennial cohort continues its homebuying spree, each year millions more members of Gen Z graduate from college and enter the workforce.

These young professionals value autonomy, entrepreneurship, and flexible work environments, all of which freelancing provides. They also prefer flexibility in their housing. A 2023 Apartment List study found that 20% of Gen Z individuals consider themselves "forever renters." Operators who want to attract and retain residents must adapt their screening practices to account for this rising demographic and its preference for freelance work.

Traditional resident screening emphasizes fraud prevention over financial inclusiveness. Property managers should be focused on accurate income verification, which not only stops applicants with fraudulent documents from having the opportunity to lease, but also removes the chance of falsely denying a legitimate applicant.

By checking all legitimate income for applicants, regardless of how they earn their money, cashflow-based income verification solutions create inclusivity. Using real-time financial data directly from applicants' financial institutions, these solutions can be far more predictive than a few paycheck stubs or even a credit score.

This helps property managers approve more and higher quality applicants. Cultivating quality applicants in a community is the best way to reduce aged receivables and bad debt, increase net operating income, and drive asset value for investors.

Today's workers aren't the workers of 70 years — or even a decade — ago. Their values and preferences have evolved, and multifamily operators must evolve with them. To genuinely cater to today's workforce, resident screening procedures must get with the times.