Demand for rental property is continuing to rise. With mortgage availability remaining poor, many more individuals are being forced to rent – and this situation looks set to continue for some time.
As demand increases, so too does competition between tenants. This means that landlords are frequently placed in an apparently enviable position in which they are able to choose between several potential options.
But while choice is always good, it can be difficult to differentiate. So what should you be looking for, and how can you help to make sure you choose the right tenant?
1. Check references
References are amongst the most useful tools available to you in the hunt for reliable tenants. The references you request will depend on the nature of your property. But residential landlords would be wise to request at least a verifiable reference from the prospective tenant’s previous landlord. Remember, though, that these are easily faked, so you should always follow up the reference – for example by phoning.
You may also choose to ask for an employer’s reference, but you should remember that this is not a guarantee of the tenant’s ability to pay their rent. Similarly, some landlords ask for an affordability reference from the prospective tenant’s bank. The bank will tell you whether or not, in their view, the tenant is good for the money – but again, you should not use this as your sole indicator.
2 Consider credit checks
You may also consider running a credit check on your prospective tenant. This is particularly helpful in identifying previous bad debts, and its uses are therefore twofold: a credit check can help you judge whether or not the tenant is likely to pay the rent (or, more accurately whether they have a history of non-payment); and it can help you judge whether or not the tenant has existing disputes that might, in the worst cases, cause bailiffs to come knocking at your property.
3. Trust your instincts
The importance of trusting your instincts really cannot be overstated. If the tenant’s references are fine but you are still unsure about the individual, you should listen to your gut feeling. Remember that you are not obliged to let your property to anyone. If you would be uncomfortable doing business with them, then keep looking.
4. Always take a deposit
It is remarkable how many landlords fail to take a security deposit from their tenants. This is one of the most important ways in which you can protect yourself and your property, and you should not hand over the keys to your property until you receive it. The size of the deposit you request will depend on the nature of the property, but most landlords ask for the equivalent of either one month’s or six weeks' rent. Remember that the deposit needs to be protected in a government-mandated deposit protection scheme.
5. Meet your tenants
Whenever possible, make sure that you meet your prospective tenants before making an agreement. A face-to-face meeting is the best way to get an accurate sense of the tenant’s personality, and to determine whether or not you would be happy to do business with them for the duration of the tenancy. It is important that you trust your tenants, and that they trust you – and you can help to develop this trust by ensuring that you meet them.
6. Give yourself time
Whenever possible, try not to end up in a situation in which you are forced to let your property in a rush. Clearly, everyone wants to minimise void periods. But if you don’t give yourself enough time to find a suitable tenant, you risk being rushed into letting your property to someone with whom you are not entirely happy doing business. Remember that finding the right tenant can be a relatively lengthy process. Make sure that you give yourself enough time.
7. Consider using an agency
Finally, you should not discount out of hand the use of a lettings agency. Provided that you choose your agent well, they could help you to find suitable, reliable tenants in a timely and cost effective manner. Look out for more information on choosing a letting agent on Simply Business soon.