Tips to Referencing Tenants
We all too often hear about rogue landlords but there are far more “nightmare tenants” out in the community that could be contracted in to one of your properties. The economic climate is very challenging at the moment, making an increase in the number of tenants looking for rental properties.
Landlords cannot be too cavalier with the referencing process. They must ensure due diligence is taken before any tenancy agreement has been signed, and a strict vetting and referencing procedure has been carried out.
Avoiding Nightmare Tenants by Proper Referencing
One of the biggest mistakes a landlord or property owner makes is to get a tenant in and on board, because they just want the rental fees to start paying. Homeowners renting out should accept there may be a void period where no revenue is generated, and time is spent dynamically looking for the right tenants.
When landlords rush in to get the ball rolling on rent, it can end up costing them more if the tenants turn out to be far from ideal. The first referencing a landlord or property owner should do is go with the gut instinct.
All prospective tenants will ask to look around the property and this is where landlords need to be highly alert. Be inquisitive, but not too much, you don’t want to scare potential tenants.
Identification is Important
Identification is very important. It ensures property owners that the prospective tenants is actually who they say they are. The Immigration Act 2014, Section 22, states that landlords in England must check to see if the tenant has a legal obligation to be in the country. Ignore this ruling at your peril.
If these things are not checked and you accept a tenant who is illegally in the country, you may end up paying a fine of up to £3,000.
Tenant Referencing and Checking for Good Credit History
Tenants should provide previous addresses, and name of Landlord/Company they have rented through in the past, in order to check how they have performed previously as a tenant. Credit checks can also be competed for a small price, to ensure tight and plausible credit history exists.
Income Check Must Be Detailed
A landlord should check to see if there is a regular income coming in, and that the potential tenant has been in employment for some time. Work status and income should be assessed to see if tenants can keep payments coming in on time, every time.
The following steps should be applied by landlords:
An ID Check – confirms who exactly your new tenant is and who they say they are.
Credit Check – Any concerns with finances will be discovered at this juncture.
Income Check – Employment and work status are determined here.
Any References from Previous Landlords – This provides excellent information on how they have performed previously as a tenant.
Using the above steps has not failed for Bespoke Living Bristol yet, happy tenant finding.