Top tips for tenant screening and reference checks

tenant-screening

Let’s try and get your tenant selection right the first time

A property is one of the most valuable assets a person will own in their lifetime and therefore in an ideal world this asset will have minimal risk and therefore minimal damage or value depreciation.

Lets talk through the dos and don’ts when it comes to finding the right tenants to occupy your properties.

Do you have an ideal tenant in mind?

I’m sure we would all like some tenants who have a regular income, don’t smoke, don’t have any pets, and don’t have a manic social life that could result in loud parties and upset neighbours but these people are rare and you are restricted with your requests that a tenant must meet.

Be sure to follow regulations and legislation

It is important that you follow regulations that prevent any discrimination for those looking for accommodation. There are a number of laws that prevent any discrimination in the UK, for further information read up on The Equality Act 2010.

This covers the basics including; marital status, sex, religion or beliefs, race, age and disability. The basic rules for anti-discrimination are fair but what specifications of a tenant can you request?

Always have backups prepared

As a landlord, one of the last things that you want to come across is a tenant that makes late rental payments or doesn’t pay the rent at all. Make sure that within the tenancy agreement there is a clear protocol in place in the event of the rent not being paid. For many landlords there will be a leeway period for the rent to be paid or a strike system.

If you do unfortunately take on a tenant that doesn’t pay the rent, be sure to have some backup tenants on hand. An empty property isn’t a profitable property so you want to keep this empty property period as short as possible.

If you are concerned about your tenants missing rent payments; our team at Property Quote Direct can quickly find you a quote for rent guarantee insurance. If you would like to know more about this type of policy call us on 0800 515 381.

Guarantee that you will receive the rent you are owed

This is where guarantors come in. For many tenants a guarantor may not be an option but for those that can put this into place, it means that you have an extra level of financial security. If you depend on rental income it is vital for you that these measures are put into place. You may even want to take out rent guarantee insurance alongside any regular landlord insurance.

Rules on referencing and screening tenants

First things first, meet the tenants. Be sure to look out for any warning signs, if they are late this could be a sign that they are unreliable and may not make rent payments on time, if they have animal fur on them they could have a pet, it’s up to you if you allow pets or not. A face to face meeting allows you to get a better feel for what a person is really like rather than over the phone.

Who you should be checking

You should be running checks on all tenants that will be living in the property that are over the age of 18. Even if one of the tenants is not named on the tenancy agreement, as the landlord you can still screen them as they will also be living in your property.

You must check that all lodgers can legally rent in England, you can do this with original documentation that proves they can live in the UK. You must check all new tenants, it is illegal to only run checks on people that aren’t British Citizens. Click here for more information on who you have to check.

There are various best practises that should be taken in order to gain references including guarantors, work references and previous landlord references, find out more here.

How long should each tenancy be?

You have to weigh up both sides before you put a fixed term tenancy into place, for example a 6 month period will allow you to see if the tenants are the right fit but this means that if they choose to leave at the end of the agreement you have to go through all of this again.

Your next option could be a 12 month tenancy agreement which pushes aside the issue of having to find new tenants regularly but it does mean that you cannot use this property for 12 months for yourself if need be.

What to do if you have nightmare tenants?

As soon as something doesn’t run smoothly within your tenancy agreement, you want to get out. One late payment could lead to the next month not being paid at all and one broken piece of furniture could lead to a lot more damage. Here’s what you can do…

Section 8

Under the Housing Act 1988 the landlord has to right to issue a Section 8 to a tenant who has breached their tenancy agreement. In the UK the most common reason for issuing a Section 8 is rent arrears. Once a Section 8 has been issued the tenant will be given a specific period of time before they have to move out of the property so that the landlord can retake possession of it.

Section 21

A section 21 is issued to a tenant from the landlord when they wish to take back possession of the property. The tenant has no control over this and does not have to be in breach of the tenancy agreement.

The Section 21 will give the residents a date in which they must move out by. This notice can only be given to tenants who have an assured shorthold tenancy agreement.

Click here for a quick guide to avoid bad tenants

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