Everything a Landlord should know about - How to get better tenants
Some landlords go on gut instinct and I have heard many stories saying that this works, but we like to see hard proof before selecting a tenant.
Picking a tenant is a complex matter, and some tenants have mastered the art of appearing wonderful, professional and the perfect tenant.
A month or so later all is revealed: the rent is late, they are not really working, there are twice as
many people living in the property as there should be and the lounge houses a menagerie of animals.
We then have a lot of explaining to do, and we will fall back on the paperwork and
the referencing is done at the outset.
You need to set yourself a list of criteria for your tenant, and stick to it. Be strict with yourself when faced with a lovely tenant who doesn't quite stack up, and have what if' measures.
Putterills always aims for tenants who have been in their jobs for three years, earn 40 times the rent, and are UK residents or have full right to rent. We obtain references from previous landlords and employees. But sometimes, prospective tenants don't fit that mould, so what do you do?
Asking for a guarantor is a good start. These are so useful. When anything doesn't quite stack up - or they haven't quite been in the country for 12 months etc. - we ask for a guarantor.
This is a great way of ascertaining whether the tenant is trustworthy or not. Someone who knows them infinitely better than you is not going to put their name to paper and commit to paying the rent in the case of a default if they know that the tenant is bad news.
Be careful, though: you need to reference the guarantor in the same way as the tenant. You want the guarantor to be a UK~ living homeowner, and they must sign the guarantor's paperwork, too, so there is some extra work required here.
They also need to be made aware of what they are signing and what they are committed to. I've always found though that with a good home-owning guarantor, if your tenant goes into arrears, you are a lot more
likely to receive your rent.
Landlords' references
So many people ask for landlords' references, and this is good as a tenant's former landlord will or should give you a good insight into what the tenant is like, but here is a question for you. Imagine you had a tenant from hell living on your property, and you were trying to get rid of them. If you then got a call from another landlord asking you for a reference for your tenant, who had applied for their property and said they wanted to move in next week what would you say?
That is why you must always go to the landlord before the previous landlord to get a reference. They will tell you the truth. You could even look to the landlord before that! Keep digging. A bad tenant is a bad tenant and they usually leave a string of disgruntled landlords behind them.
Credit check
This is a must, You need the tenant's consent and signature of authority to do a credit search. You can then credit-search them using one of the credit referencing agencies available. These will give you lots of useful information: any county court judgements, bankruptcies, alias addresses, the dates they have
registered on the voters' roll (or not).
Very, very useful tools. We search their alias addresses as well to make sure that if there are any skeletons hidden in the cupboard or they have tried to pretend they have lived somewhere that they haven't, we will find out.
If your prospective tenant is a limited company you can also perform company searches to ascertain their time trading, directorships, net worth and any charges, borrowings or bad debts.
Employment references
These are extremely valuable but often not conducted for some reason. We tend to go back three years. You are looking for someone who has spent at least the last full year in full-time employment without any breaks.
National Insurance number
We always take this as if the tenant defaults and you need to chase them for arrears there are a few things you can do with the NI number, including getting an attachment to earnings to recover your arrears from.
Next of kin
This one works beautifully. You need the next of kin in case the tenant is hurt and you need to contact their nearest relative. But this is also extremely useful if you lose your tenant!
This is the first in our mini-series of Everything a Landlord Should Know
