As a landlord, you are running a very busy business, and you are expected to wear a number of hats! When managing the rent you wear the Finance hat, it’s Maintenance when a pipe bursts and HR when it comes to deciding upon new tenants.
However, if you manage to carry out your HR function well, and find a great tenant at the start, it can make the rest of the relationship much simpler to manage.
But how do you go about finding down that person? Property Quote Direct has a few tricks to help you track down a tenant that is perfect for your property…
Why it is so important to find good tenants first time?
Obviously, you want the right person in your property, but more so now than ever before. In the Queens Speech at the opening of Parliament last month, she announced that there would be significant changes to the legislation surrounding deposits in rental properties. Landlords will not be able to take any more than four weeks’ worth of rent as a deposit, so if tenants move into your property and do not look after it very well, you will not have as many funds in place to potentially put right any damage caused.
Another potential change mentioned in the Housing White Paper back in November 2016 was the Government’s desire to introduce longer tenancies, in a bid to encourage families to put down roots in rented accommodation. This is great news for landlords who find the perfect tenant, and is designed to encourage people to stay in a property and make it their home - but it might make life harder for a landlord if you find yourself with a nightmare tenant. Whilst you always have the option of issuing a Section 8 or Section 21, it is possible that if a tenant has signed a tenancy agreement for a long-term tenancy, they will have more power to fight this should the case progress to court.
Define who exactly you’re looking for
It’s vital that if you are going to accept only a certain type of tenant (students, no smokers, no housing benefits etc) that you make this clear within your advert. If you don’t, you could risk wasting your time, and that of potential tenants. It is not unacceptable to ask tenants to fill in a checklist before a viewing, asking them to clarify that they meet the requirements of the advert - after all, they would be as frustrated as you to find that you are not willing to accept pets and they have three beloved labradors!
Whilst it is important to be clear what you are looking for, there are regulations in place to make sure that potential tenants are not unfairly discriminated against. The Equality Act 2010 prevents people from being discriminated against due to a number of ‘protected characteristics’, which include:
- Gender reassignment
- Marital status
- Religion or belief
- Sexual orientation
It is not a criminal offence to prevent someone from renting a property, however if a tenant believes that the decision was made because of one or more of these characteristics (they were ‘too old’ for example) they would have the ability to challenge the landlord in court on the grounds of the Equality Act 2010.
Meet face to face
It today’s digital world, it is easy to go through life without having to meet another soul – everything from ordering your food shopping to booking a holiday can be carried out without the interaction of another person. However, when it comes to deciding on a tenant, it is imperative that you meet prospective tenants in person to decide if they are the right fit for your property.
This is especially important if you have other tenants living in the property who they will be sharing with, or if there are close neighbours who the prospective tenant will be interacting with in order to enjoy the property or shared areas. Consider the rights of existing residents, and maybe think about involving them in the process if you can.
Even if you are running an HMOwith tenants coming and going on a short term basis it is, perhaps more important, to meet in person and get a feel for who will be
taking charge of your most important asset.
Be as safe as you can be
If you had a Ferrari would you hand the keys to a person in the street and trust them not to scratch it? Finding a tenant is no different! After all, you are handing over the keys of one of your biggest assets to a near stranger, it’s understandable that you need as much information as possible about your prospective tenant. The safest way to double check is to reference, reference, reference!
Even if you have a good feeling about a tenant, and they appear to be the ideal person for your property on paper, appearances can be deceiving. A comprehensive referencing check should look into your prospective tenant’s credit history, employment, and even their history with previous landlords, so you should get a good feel for their back story.
Put back-ups in place
Even once you have carried out a reference on a tenant, that doesn’t mean that a situation can’t change. Making sure you have a full deposit and comprehensive inventory will give you a good starting block, as should there ever be any damage to the property you will be in a better position to recover some funds.
Additionally, if your tenant’s historical financial references are not as impeccable as they could be (nobody is perfect, this is understandable) you could consider asking your tenant to provide details of a guarantor. A guarantor is someone, provided by your tenant, who legally agrees to cover payment of rent should your tenant be unable to meet payments themselves for any reason. The guarantor must be over 18, a UK resident and earn over three times the annual rent (dependent on referencing), and they should undergo the same referencing process as the tenant – although they will have no claim to the property themselves.
If your tenant’s referencing is perfect, and there is no need for a guarantor, you could consider putting a rent protection insurance in place. Depending on the cover, these policies can cover loss of rent and accidental damage. For more information on this sort of cover, contact Property Quote Direct for their bespoke landlord insurance packages.
Finding someone who will see your investment as their home, and treat it with the same care and love that you do is invaluable, you’ll really have hit the landlord jackpot!
However,Property Quote Direct can help provide comprehensive landlord insurance, ensuring that you, your property and your tenants are well protected against life’s little accidents - taking the worry off your shoulders and leaving you free to focus on the bigger issues, like finding the perfect person to look after your investment.
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