As more and more of us choose to rent where we live instead of buy property and we move even closer towards becoming a nation of renters – inevitably the lettings market is stronger than ever – just as society thought.
Of course this is great news for landlords and letting agents, but with a larger number of potential tenants, it is vital to follow the tenant checking process to the letter to avoid complacency and ensure you let to the right people.
There isn’t a single landlord who would be happy to find out their tenants have disrespected and damaged their property, failed to pay the rent or caused problems through antisocial behaviour – and by having a thorough tenant checking and referencing process, letting agents can minimise those risks and take away the element of ‘he who shouts the loudest is heard’.
In the worst cases, problems with bad tenants can lead to solicitors’ fees and court costs in an attempt to obtain an eviction order and claw back costs which usually results in a lot of stress and uncertainty about the property. Taking steps to find tenants who are reliable and trustworthy, as well as financially secure, is just common sense.
Asking potential tenants to fill out an application form is a simple way of acquiring the relevant information that will help to decide who to offer a tenancy agreement to. While it’s important not to pry too far into people’s lives, there are several pertinent questions you should ask.
This not only allows you to find out whether the potential tenant currently earns enough to cover rental costs, but also gives you some insight into their reliability. A steady work history is reassuring, whereas long periods of unemployment or signs that someone switches jobs frequently might merit further investigation. You can also ask for a letter from the prospective tenant’s current employer to confirm the details of their employment and salary but more often than not you can contact the employer yourself to confirm the prospective tenants employment status.
A credit check provides valuable information about someone’s financial past. Whilst one or two missed payments doesn’t necessarily mean somebody will be a bad tenant, a poor overall credit score or a history of late or non-payment will raise a red flag.
Current debts should also be taken into consideration as these could affect someone’s ability to pay the rent.
You have the right to request copies of the prospective tenant’s bank statements, usually for between the previous three to six months, but bear in mind that they also have the right to refuse. Asking to see payslips instead might be a good compromise.
Details of previous addresses
It is so important to ask for references of previous landlords and even more important to get the reference. A tenant’s reason for leaving their last home can say a lot about their current situation so be sure to ask, as well questions such as any missed or late rent payments, unpaid utility bills and if the deposit was returned in full at the end of the tenancy – and if not, why not. Also, bear in mind that even if they are a bad tenant, the current landlord may give a favourable reference because they want to get them out of their property. And maybe just maybe your prospective tenant is just a normal person with the ability and sense to pay on time – so try not to be too cynical – Lots of people choose to rent for lots of reasons these days.
Lifestyle & personal interests
Some landlords would prefer not to rent to smokers or pet owners at all. Others might be ok with someone who has a cat, but wouldn’t want a tenant who owned three large dogs. This is entirely down to personal choice, but don’t forget to ask so that you can make an informed decision. You will also want to know who will be living in your property – whether it’s a single person, a couple, or a family with small children for example.
Any thorough referencing process should include obtaining personal references although most don’t because they don’t contribute facts to a potential tenants case, just subjective opinion. If you do decide to ask for personal references be prepared to tell the prospective tenant why you have chosen to do so and ask for full names, their relationship to your potential tenant and length of acquaintance, and contact details that include a phone number.
Some landlords may also request a DBS check (Disclosure & Barring Service – formerly known as a Criminal Records Bureau or CRB check) which can reveal whether someone has been convicted of any criminal offences. While not a common practice when it comes to renting out property, it is an option for those who feel it is necessary.
Bear in mind that tenants may ask for details of any information, such as a credit report, that is the cause of their application being rejected so ensure you keep copies of any reports and paperwork in case this happens.