Choosing the right tenants is one of the most important aspects of being a landlord.
When you’re successful in finding tenants who pay their rent on time and look after your property well, then you’re in for a profitable letting. However, if you have a problematic tenant, it can be a stressful situation and you may actually end up losing money.
Improve your chances of having a successful and profitable tenancy by following our guide on how to choose tenants.
Importance of tenant selection for landlords
When you become a landlord, one of the most useful things to learn is how to vet tenants in order to protect your property. Your tenants will be living in one of your biggest financial assets, so you have to be able to trust them.
If you end up with the wrong tenants, you could end up with a range of issues; late rent payments, poor cleanliness, maintenance issues, property damage, neighbour complaints… the list goes on. Finding the right tenants will allow you to enjoy a hassle-free, profitable tenancy.
It’s worth remembering that good tenants will be assessing you as much as you’re assessing them. They’ll want to feel safe in their home and that they can trust you to fulfil your duties as a landlord.
It’s best to get things off to a good start by making a positive first impression when prospective tenants get in touch. If you’re polite and responsive, this can encourage your tenants to act in the same way.
When you work with a Hunters agent, we’ll do this for you, connecting you with a selection of fully-vetted, qualified tenants for your property. If you’d like to find out more about our landlord services, contact your local Hunters branch now.
Responding to tenant enquiries
First impressions: setting the tone
As a landlord, it’s important to act professionally and to be responsive from the start. Answering initial enquiries in a timely and friendly manner shows that you’re professional and that you can be contacted when needed.
Building up a successful tenant/landlord relationship needs trust, and a good first impression goes a long way to start building this.
Application process
Renting out your home to someone you don’t know can feel risky. That’s why the application process is so crucial; it gives you the opportunity to check that potential tenants are the right fit for your property.
When reviewing tenants, it’s important to find out everything you need to know by asking the right questions and doing the right checks. Some things to look out for include:
- Do they have stable employment/income?
- Have they rented accommodation before?
- Do they have good references?
- What’s your impression of them when you meet them? Are they friendly and polite? Gut instinct can be a good indicator.
- Lifestyle choices; do they smoke?
Standard rental application form
Required documentation: what landlords look for
All landlords are legally required to check that their tenants are allowed to live in the UK before renting out a property to them. This is sometimes referred to as the right to rent check.
The way to check that tenants have the right to rent in the UK is to ask for their passport or residence document, and make sure you keep a copy of these. If tenants don’t have a passport, they’ll need to show two other forms of ID, such as a UK birth certificate and a driving licence.
Credit check
Many landlords do credit checks on prospective tenants as it’s another way to see how they handle money. Credit checks will show whether someone’s been bankrupt or has any unpaid debts with the County Court. Not all landlords do credit checks, but if you decide that you want to, you must ask for permission first.
Importance of credit history
Interpreting credit scores and reports
Credit checks can show whether prospective tenants have had difficulty paying back money that they’ve borrowed in the past.
Landlords use them because they can help indicate whether someone is likely to be reliable for rent payments. However, people can have poor credit scores from simply not having borrowed money before, so do take this into account.
Income verification
As a landlord, you need to know that your tenants can afford to pay the rent. You can ask to see a prospective tenant’s employment contract, payslips, bank statements or proof of benefit entitlement so you know how much money they have coming in.
Personal references: credibility matters
Previous landlord references: insights and red flags
Receiving a reference from a tenant’s previous landlord is a key step in working out whether they’d be a good fit for you.
Previous landlords can tell you whether the tenant was ever in arrears with rent payments. They can also let you know how they looked after the property, and whether there were any issues during the tenancy.
However, bear in mind that if they’re the person’s current landlord, they may be trying to get rid of a problematic tenant. If you suspect this is the case, try and get a reference from another previous landlord of theirs as well.
Five “red fags” to look out for:
- Vague references – this could be revealing. If a reference is non-committal there may be a good reason as to why.
- Changing jobs often, or having large gaps in employment. This could show that the person isn’t a reliable worker with a regular income, which could affect their ability to pay rent on time.
- An incomplete application – you need all the information on the form, and if they’re missing some, they might be trying to avoid revealing something.
- Previous evictions and/or criminal records. These may indicate that this person could be a problematic tenant and pose a risk to your asset and finances.
- Asking to skip the tenant screening checks, or trying to rush through the application process. This could be because they’re trying to hide something important or they’re being forced out of their current accommodation.
Interviewing potential tenants
Talking to potential tenants is the best way to get to know them and to see if they’re a good fit for you.
Key questions to ask:
- Why are you moving?
This can give you a lot of information about the prospective tenant. Listen carefully to see whether their reasons seem legitimate (e.g. to be closer to work, to have a garden, more space etc.). Watch out for any problematic reasons, like arguments with their current neighbours, as this may indicate that they’re troublesome tenants.
- When are you looking to move?
You want to know that your timelines match up so that the property isn’t sat empty with no rent money coming in. However, if they’re in a rush to move then make sure you find out why.
- How long have you been at your current home?
Asking this can give you an indication as to whether they move around a lot, or whether they’re more likely to stay put for a while. If they’re a good tenant, the longer they stay, the better it is for you. If they move every few months, you’ll have to spend time and money finding another tenant soon.
- What will the reference from your former landlord say?
This may give you an indication as to whether they’re leaving on good terms or not. It will also be interesting to compare what the tenant says to what the landlord comes back with in their reference, to see if they line up.
- What’s your income?
It’s important that you feel secure in the knowledge that your new tenants can afford to pay the rent every month. Asking people’s income and to see their payslips is a good way to verify this, otherwise you could be facing late rent payments.
- Are you currently working, and if so, how long have you worked there?
This can show how stable and established their employment situation is, and whether it’s likely to be ongoing. If they’re not working, you’ll need to find out how they’re going to pay their rent, otherwise they could quickly get into arrears and leave you out of pocket.
- How many people would be living here?
This is a crucial question. Two people may come to view the property, but that doesn’t mean that they don’t want to share with others. If they end up with several friends living with them you may be breaking the law by overcrowding the property.
It’s important to keep up with current legislation.
- Do you have pets?
Have this discussion early on so that both parties know what’s expected regarding pets in the property. Tenants may not mention their pets so you need to find out whether they have them before they move in.
- Do you smoke?
Smoke can cause damage to your property so many landlords don’t allow it inside. It’s important to establish your policy on smoking from the outset so your tenants know what’s expected of them.
- Do you know what you’ll be responsible for within the property?
This may seem obvious, but it’s worth clarifying whether your tenants need to cover utility costs, and damages/repairs so there’s no room for arguments later. Explain what’s in your tenancy agreement regarding costs and responsibilities so that you’re all on the same page.
Our experienced agents know exactly what to look out for in interviews – if you’d like some advice or support, then contact your local agent today.
Evaluating the application
Once you’ve gathered all the information you can about a potential tenant, it’s time to weigh up whether they’re the right fit for you.
If a tenant has no obvious red flags and they can prove that they’ve got a regular income, it’s looking positive. However, if they’ve never rented out a property before, it’s difficult to know whether they’ll be a trustworthy tenant or not.
Sometimes you have to follow your instincts; how did they interact with you when you met them? How have they responded to messages and requests for information? People give off many indications about their character through these interactions, and sometimes you have to trust your gut. If you don’t see any issues and you’ve started to build a positive relationship with them, then give them a chance.
When assessing applications, make sure you’re up to date with current legislation. When you work with your local Hunters agent, we’ll make sure you’re compliant with the latest legislation.
FAQS
What are the most important factors landlords consider when choosing tenants?
Landlords screen tenants for potential red flags. The most important parts of screening are income verification and references from previous landlords.
How do landlords verify a tenant’s income?
Landlords ask to see payslips or P60s so that they can be certain that tenants can afford to rent their property. Being in regular employment is a big plus, but if your prospective tenants are on short term contracts then ask to see their bank statements instead. These will show if they have enough money coming in throughout the year.
What credit score do landlords look for when screening tenants?
A higher score generally indicates that a tenant is reliable with their finances. However, many landlords don’t have a set score when looking at credit reports for their tenants.
As a landlord you can only perform a “soft” credit rating on tenants. This means that you’ll only see information that’s available publicly, such as whether they’ve had to declare themselves bankrupt, or had a county court judgement.
Credit scores are a good tool when used alongside other information in the application, such as the person’s income and references.
Can a tenant be rejected for having a prior eviction?
Landlords can reject tenants if they know that they’ve been evicted previously. Previous evictions are a big red flag because it’s much more likely that the tenancy will be problematic.
Are landlords allowed to ask for personal references?
Yes, it’s good practice to ask for references from the tenant’s previous landlord, so you know that they paid their rent on time and treated the property well. You can also ask for a reference from their employer, to confirm that they have ongoing employment.
What information do landlords seek from previous landlords?
It’s important to find out how people treated their previous tenancies, so ask questions like:
- Can you confirm the tenant’s identity?
- How long was this person your tenant?
- Did they pay their rent on time?
- Did they maintain the property well?
- Did you have to serve notice or begin eviction processes for this tenant?
When you rent out a property, there’s a lot of work involved in vetting and selecting tenants. If you’d like some advice about registering as a landlord, then contact your local Hunters branch now – we’d love to help.
