With landlords experiencing more scrutiny and pressure on their budgets than ever before, securing good, reliable tenants for your property has arguably never been more important.
Bad tenants cost money - it's that simple. It costs money and time to remove them through an eviction notice not to mention attempting to reclaim any rent arrears.
And it then costs even more to re-market your property once they are gone.
Good tenants, on the other hand, are worth their weight in gold. But how do you sort the good from the bad? And how do you keep them long term?
The answer is tenant screening and effective property management.
The best way to reference your tenants, keep them happy and ensure all your landlord responsibilities are being met is by using a letting agent.
The key to obtaining good, reliable tenant references is in a structured and thorough process.
It's crucial to judge each tenant individually and with a clear head and your letting agent's experience and know-how is key to this.
While void periods are hugely frustrating, your lettings agent will not rush the screening process simply to get the rental income flowing again.
It could end up costing you more in the long run if your quick fire tenants turn out to be bad eggs.
Methods lettings agents use to vet prospective tenants for landlords will vary, but the following are essential steps in the screening process...
Tenant background check
One of an experienced lettings agent's key weapons is plain, simple gut instinct.
If our agents get a bad feeling about a prospective tenant when they meet them for a viewing, there's a strong chance they're right.
That doesn't mean your agent should rule them out, of course. But it pays to keep those first impressions firmly in mind as the referencing process moves forward.
When your agent meets your prospective tenant, they should take the opportunity to ask questions about what they do, their previous employment and why they are keen to rent in the area.
If they are commuting to work from the property, how far will they have to travel? If it's borderline unrealistic, the tenant could find themselves forced to move job which could make the rent unaffordable.
They should also ask about previous properties they have rented and their experiences.
Getting to know a tenant at this stage can help your agent and you make a sound judgement call on the tenant's suitability for your property.
Among the vast array of obligations you have as a landlord, the Right to Rent check is one of the most important.
Brought in under the Immigration Act 2014, all residential landlords are legally required to check their tenant's proof of identification and right to live in the United Kingdom.
Failing to do so could land you with a fine running into thousands of pounds.
If you decide to use Whitegates' tenant find or full management services we will undertake these ID checks for you to ensure peace of mind.
To undertake a Right to Rent check an agent must:
* Ask for original documents proving each tenant aged over 18's right to live in the UK. These documents could include:
1. A British or EU passport or National Identity Card
2. A non-EU passport showing the tenant has indefinite right to reside in the UK
3. A Home Office certificate or residence permit card showing residency status
4. A certificate of naturalisation
* Check the documents provided are genuine with the tenant present
* Make copies and date the documents
* Note dates to undertake follow-up checks should the tenant's right to remain not be indefinite
Tenant referencing services
If you opt to find a tenant though a letting agent, crucial tenant referencing will be done for you.
Undertaking thorough referencing is still an integral part of the tenant screening process.
There are a host of tenant referencing services available to lettings agents like Whitegates and most will provide landlords and agents with a report including:
* A financial check which could highlight things like County Court Judgments (CCJs) or a poor credit history
* An income reference clarifying the tenant's employment status, salary, job title and length of employment
* Previous landlord references which will provide a view of the tenant's suitability and reliability
* A linked address check, which will check the tenant's name against a database of addresses they may not tell you about. This could reveal CCJs or unpaid rent.
Tenants are no different to any other house hunters: They will often be guided by their hearts rather than their heads.
That can bring affordability issues to the surface and neglecting to perform a 'stress test' on your tenants can mean a big financial headache for you as a landlord during the tenancy.
Using a letting agent like Whitegates to find your tenant and manage your property can ensure issues of affordability never rear their head.
A good agent should take your tenant's monthly salary and look at it against the monthly rent, projected utility bills, council tax and other costs of living.
At this stage it can be worth adding an additional cost amount for simply having a life. After all, your tenants are sure to have one!
If the overall costs of renting your property are too close to the tenant's monthly salary, your agent should raise the issue with you and you will need to consider your options.
If the numbers don't stack up, that could mean rental arrears during the tenancy and all the problems that come with that scenario.
One option available to you as a landlord is to stipulate your tenant must have a guarantor in place.
Using an agent to find your tenants and draw up a tenancy agreement can take away the additional workload sparked by the need for a guarantor.
In the case of a 'touch and go' stress test as outlined above, a guarantor can be a vital safety net for you to avoid the pain of rental arrears and potential eviction costs.
A lettings agent like Whitegates can ensure everything is in place to protect your investment.
If a tenant can't, or won't provide a guarantor then it might be better to continue your tenant search through your agent than take a risk.
Using a letting agent is the best way to remove the stress and hassle of referencing tenants and ensure your rental property and income is in safe hands.
With so much legislation currently piling the pressure on UK landlords, making use of a good managing agent to find tenants and help protect your buy-to-let property on a long-term management basis is the most cost-effective way to ensure peace of mind that all your landlord obligations are taken care of.
Bad tenants will usually rent from private landlords in order to avoid the lettings agent referencing process, so using an agent automatically means your tenants will be more reliable.
In turn, that means you will receive more money from every pound of rent as those bad tenants will have already been weeded out for you.