How to Pick the Perfect Tenant for your Rental Property

Letting a property - Handing over the keysWe know the potential pitfalls you can face when choosing the right tenant to rent your property. In the current economic climate, more and more people are looking to rent rather than buy. But a tightening of financial belts has also led to a growing number of ‘bad tenants’, with one in three landlords nationally reporting cases of rental arrears.

With more than 600 properties in our lettings portfolio, we understand all the dos and don’ts of choosing the right tenants, and are delighted to share our top tips with you:

Awesome Advert

Advertising your property correctly can help you get a flying start to finding the right tenant. Firstly, make sure it’s clear, concise and accurate – don’t make bold claims that you can’t back up. This will get you enquiries from people genuinely interested in the property and weed out the potential timewasters. And second, recognise that most people search for properties via the internet, so ensure it is advertised on property search websites.

Good Form

Produce a professional and in-depth application form for potential tenants to fill in, so you have all the information, history and contact details you need to carry out your vetting of candidates at your fingertips.

Research, Research, Research

It’s crucial you take great time and effort to investigate a potential tenant’s background to find out whether they are the right person for your property. It’s quite common for people to exaggerate or omit vital details from their application forms, so it’s essential you follow-up all references personally to uncover as much information as possible. A good agent will let you see copies of references and credit reports.

Personal Profile

What sort of person wants to rent your house? Meet your prospective tenants to find out why they are moving – do they set off any possible ‘warning lights’? And get in touch with their previous landlords to see what sort of a tenant they were – did they pay the rent on time? Did they look after the house? You don’t want to discover any nasty secrets further down the line!

Find Out About Finances

You might think you’ve found the perfect person, but what if they don’t have the money to pay the rent? Carrying out a full credit check is a fundamental part of the vetting process and is something we do for all our clients, which will flag up any problems such as County Court Judgements or insolvencies.

Just The Job

Ask for proof of employment, such as a number of consecutive monthly payslips – ideally rent shouldn’t total more than 40% of a tenant’s salary. And contact the person’s current and previous employers to learn more about their job, their salary, and their personality. How long have they worked with their existing company? Are they on a permanent contract? Are they a good employee? Possibly even in line for a promotion? Finding out little nuggets like this can help you make your final decision.

First Isn’t Necessarily Best

Accepting the first offer for a quick deal might sound like a great idea, but even if you think you have the perfect tenant lined up, take your time to consider all the alternatives. Choosing the wrong tenant quickly will cost you far more in the long run than finding the right tenant carefully.

Cash Isn’t Always King

Don’t be duped by tenants who offer to pay large sums up front. It may sound an ideal scenario, but there could also be an ulterior motive. For example, a tenant might be looking to cover-up a terrible rental history, or they may be someone who doesn’t want to be disturbed by a landlord so they are free to carry out more unsavoury – and often unlawful – activities.

Possible Purchaser

Ask the prospective tenant whether they would be interested in buying the property outright in the longer-term. Tenants are much more likely to take care of a house that could become their own home in a few years time.

Get a Guarantee

For tenants with no previous rental history or a low credit record, ask for a guarantor, and then rigorously check their background and financial track record as you would with any other prospective tenant.

Perfect Paperwork

Once you’ve chosen your top tenant, make certain that all the necessary contracts and tenancy agreements are professionally produced and above-board. Set out notice periods, deposits, days on which rent is to be paid, and a detailed inventory of the property’s contents, to protect yourself against any possible disputes further down the line.

Ensure You Are Insured

Check you have the appropriate landlord insurance policy in place. And always take out a Rent Guarantee insurance policy, to protect your rental income if tenants can’t afford to pay, as well as cover for any legal expenses you might incur in cases of repossession, tenant default or debt recovery.

Document That Deposit

Landlords and estate agents are required to protect their tenants’ deposits under a scheme set out in the Housing Act 2004. If you, or the agent, fails to register your tenant’s deposit with 14 days, a court could order the landlord to pay its tenant up to three times the value of the initial deposit.

Get Good Advice 

Take away all the stresses and strains of choosing a tenant yourself by teaming up with a reputable lettings agency that are registered and regulated by the Association of Residential Lettings Agents (ARLA). With more than 25-years lettings experience and a well-earned reputation for professionalism and customer service, Nock Deighton provide comprehensive background and credit searches on all potential tenants. We also offer a full management service, where we will carry our regular property inspections and all maintenance required once your tenant has moved in.

Stick with our advice and you’re sure to find your top tenant!

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