Have prospective tenants suitably verified and references thoroughly checked.
As a property investor and landlord, one of the most important things to think about is the quality of your tenants.
The best way to help ensure proper quality tenants is to have the tenants properly referenced and checked.
What should form part of a top-quality tenant reference check?
- Previous landlord references (preferably more than one)
- Work reference
- Income - Make sure the property is affordable, now and with expected rental increases.
- Credit History (no credit history is ok, it just means they have not had any debt)
- Previous addresses - (this could also highlight undisclosed liabilities etc.)
- "Right to rent."
- Identity Verification
Meeting with the tenants, your agents should have a sit-down meeting with the tenants as part of the referencing process. Face to face meetings can reveal a lot and also bring to the surface things that the tenants did not disclose in the referencing forms. One thing that comes up in these kinds of meetings is the tenant's concern about their ability to make rental payments, whether that relates to job security or a restrictive budget.
If any issues arise during referencing, make it clear to the tenants that it's much easier to stop the process now and walk away. The same goes for you, if you don't believe the tenants will be able to make payments, you could ask for more proof of their ability to pay. (One landlord I know asks tenants do a written budget to show they have the room for the rental dues)
It is much easier to turn a tenant down due to failing reference checking than it is to deal with a non-paying tenant in situ.
You have to be a fair but firm landlord.
Ensure tenants are aware that legal proceedings to evict them from the property will be started as soon as legally possible for the break of the tenancy agreement.
There are alternatives to dealing with issues in income and credit; these could be having guarantors on the tenancy agreement or having tenants pay in advance. It is up to you if you want to go down this road.
I would love to hear other interesting ways to reference check tenants before tenancy.
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