 Few landlords now accept anyone on face value. Worried about landing themselves with 'tenants from hell', most screen and verify prospects' details through one of the tenant verification companies.
It is vital to find out if applicants are who they claim to be, can afford the rent and won't turn your house into the headquarters of a satanic cult, but before you call in the experts, you can start the filtering process yourself. So here's a step by step guide to finding the right tenant - everything from getting the initial ad right and conducting viewings to using professional checking services. |
Step 1. The Advertisement
 As long as it is clearly targeted at the right audience, your ad should be the first stage of the screening process.
Like any advertising agency, you need to spend time making sure that your ad is likely to be seen by the correct sector of the market, while being clear about who the property would not suit. |
Step 2. The First Contact
 This initial contact is a chance for you to give a full description of the property for rent, and to take some vital details from them. Having a checklist ready is a good idea, so that you don't forget anything.
You will need their details, contact numbers (including the invaluable mobile), and personal circumstances, such as reason for moving, if they have children or pets, do they smoke, and who will give their references. If they cannot, or will not, answer any of your questions, it's time to call it a day with this particular prospect. |
Step 3. Visiting the property
 Alan Thurlow, until recently the joint of MD of Leaders the UK's largest independent letting agency, says that this is the time when you often find out useful information about people's circumstances.
"When people are taken out they begin to talk to you, and you find out what they really need. If they have children, do they really need a bigger place? I had one couple who said they wanted a flat, but then told me they had two dogs." Unlike selling a house, where once you've handed over the keys you can forget all about the new inhabitants, your tenants' happiness should be important to you, if you don't want to be advertising again in six months. |
 The landlord advice website Landlord Zone gives good advice on observing your prospects.
Do they arrive on time for the viewing? Is their car a mess? Are they smartly dressed and clean? And, they advise, watch how they treat the property even as a visitor. Do they wipe their feet on the doormat? Do they touch the furnishings? And - worst of all - do they smoke in the home? |
Stage 4. Tenant Verification Services
So, assuming they commit no faux pas during the two initial contacts, now is the time to hunt for skeletons in their closets.
Many landlords pay one of the expert companies to provide an opinion on the suitability of a prospective tenant. Using one of the online sites ID verification, credit history, as well as referencing can often be done within 48 hours.
Firstly, they will ascertain that the tenant is who they claim to be. ID fraud is a rare, but real risk, so they will make sure their name and previous addresses check out.
Then they will look for CCJs and other detrimental information, and fraud and credit risk scores will be awarded.
There is usually an option for references to be collected from previous landlords and employers, or you can carry this out yourself.
On the basis of their income, a tenant's ability to pay the rent will be ascertained (the rent would be expected to be no more than around 40 per cent of their salary).
Tenant Checks: The Pros
It is important to note that before running checks on any prospective tenants, you must have their agreement. This is, in itself, part of a filtering process - anyone that does not agree may not be an ideal tenant anyway.
According to Fiona Dawson at Experian's Tenant Verifier, which provides a white label service for many of the other verification systems, knowing that the checks will take place makes people less likely to be dishonest.
"It's almost a prohibition for someone who hasn't got good references, so we get a greater number of positives. It pre-screens people."
But, she says, there is always the odd one. "We do find bad references because although people give their permission, they're surprised we take them up."
Miles Ritchie of Property Risks, a service that uses the Experian data and is available to small landlords, says: "People tend to pay their rent before their credit cards, so, in general terms, they tend to be good for their rent check.
"ID fraud is relatively rare, but undeclared CCJs are more common. Few people lie about their employment, but there are instances where people think they can get away with it."
And large London letting agency ludlowthompson.com say that their system has saved their landlords thousands by identifying serial offenders that have avoided paying rent and run up arrears in the past.
Tenant Checks: The Cons
But, as well as a pass/fail result, these reports give an explanation of the information that leads to their conclusion, allowing landlords to make their own decision based on the evidence.
Alan Thurlow of Leaders believes that potentially good tenants can be missed if their circumstances are not properly understood.
"We look for CCJs. But if someone explains that they owed £200 because they were on holiday when a bill came in, we can accept that if we get it confirmed."
But when it comes to payment, he stresses that it's not only landlords that can lose out if a tenant takes on a rental commitment that is too high.
"It's dangerous to our landlords if the tenants don't pay, but it's dangerous for tenants too to allow them to take on a tenancy they can't afford. Acute financial stress destroys relationships and landlords.
"Sometimes we find someone to not be credit worthy, but the landlord likes them. We'll say that we can't recommend them, but if they really want to go ahead we'll ask for a reference waiver," says Thurlow.
Tenant Checks: The Cost
And the cost? From about £10.00 per person for the most basic check, though it's worth shopping around for the features you need.
And, if you do land a tenant from heaven, you shouldn't have to pay out for another check for a long time.
Choosing A Tenant: Top Tips
- Don't rely on a bank reference. Banks can be reluctant to give negative information about their customers.
- Make sure the previous landlords are genuine. Ask to see a utility bill for the address with your prospect's name on.
- You may get a glowing reference from a current landlord who can't wait to get rid of the tenant, so think about contacting the landlord before last.
- No history? For students, those in their first job or migrant workers always ask for a guarantor, but make sure you submit the guarantor to the same stringent verification and referencing process.
- If your tenant is self-employed, ask for references from his/her customers.
Tenant Horror Stories
Some of the horror stories recounted by letting agents include:
- A group of young tenants set fire to everything in the property including the floorboards, doors and skirting boards. They took the plaster off the walls to burn the wooden batons behind.
- One lady tenant established two "massage parlours" with visitors throughout the night. She was eventually evicted after a costly legal battle.
- A tenant took 12 months to vacate his property and paid no rent for the entire period. He was an expert in Human Rights legislation.
- A professional con man used a property under a false name for a succession of credit card frauds and benefit cheats. He has still not been traced.
- One tenant removed everything from inside the property including the carpets and left it in a pile in the garden before departing.
- A catering company used an up-market property like a hotel and wrecked it causing almost £10,000 worth of damage.
Note: before all you tenants out there start writing in about dodgy landlords, we do know there are two sides to the story. Next time we'll be looking at how to protect yourself as a tenant.
Nikki Sheehan
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