All landlords have specific rules regarding their rental properties – whether they allow pets, smokers, etc.… But one thing that all landlords want is an honest tenant.
Finding a tenant that is going to pay their rent on time, keep the property clean and maintain the home to a high standard is crucial. So how do you find the perfect tenant?
Before you rent your property to anyone, it is important to find out as much about them as possible, to avoid rent arrears and damages to the home. For this, you will need to vet all prospective tenants.
However, even with the most thorough vetting procedures, financial circumstances can change for anyone, so have Rent Guarantee Insurance in place to ensure you still get paid if your tenant defaults and to provide peace of mind.
How should you go about vetting tenants? We have five top tips for you to remember when you’re looking for someone to fill your rental property:
- Find out who’s really interested
Some people enjoy looking around properties, others may have set their budget a bit high… It is vital that you find out early who is really interested in your property. This way, you will waste no time in finding new tenants and won’t have an unoccupied property for long.
A simple application form and application fee will ensure that only those serious about renting your property will get further through the process. You can find out the basics and collect contact details for future reference.
- Can they pay?
References are the most reliable way to determine who your tenant is, whether they can pay the rent, and what type of tenant they will be.
A tenant referencing agency can conduct a check on your behalf to find out many details. A basic package will usually include checks of:
- The electoral roll to identify the tenant’s current and previous address.
- County Court Judgements (CCJ), bankruptcy and any court-based voluntary financial arrangements to find out whether the tenant has a poor credit history.
- An affordability check to make sure the tenant can afford the rent based on their current income.
- Validate the tenant’s bank sort code and address to make sure that it’s correct.
- Check the tenant’s details against any that have been stored.
The most important thing to look out for during these checks is any CCJ. If the tenant has a CCJ, this means that a creditor has previously taken the tenant to court due to non-payment of debts.
If your tenant passes these checks, it is a good idea to ask for an employer reference and/or a previous landlord reference. Even if they have always paid their rent on time and are who they say they are, it is always wise to have an idea of their character and how they are as a tenant.
- Look over their finances
If your tenant is willing for you to, you should look at six months’ bank statements. If your tenant has come this far through the process, it is expected that they have their finances in good order. But to confirm their financial position, look over their spending habits to identify any issues – they may have a gambling addiction, for example.
You must be sure that the tenant can pay their rent in full each month to avoid falling into rent arrears.
- Remember Right to Rent
From 1st February, it has been a legal obligation for landlords or their letting agents to conduct immigration checks on all prospective tenants, 28 days before the start of a tenancy. You must not discriminate against hopeful tenants when checking their identification documents.
Landlords must take a copy of documents and keep them on file. If you are found to be renting your property to an illegal immigrant, you may face criminal penalties under the Immigration Bill, which is currently going through Parliament.
- Put everything in writing
Whichever checks you or your letting agent conduct on prospective tenants, make sure that you put everything in writing and keep all documents on file. If you communicate with tenants over the phone, make notes of the conversation and date these. All emails should be printed out and placed in a file to ensure you are up to date and keep on track.