I Am The Agent's Advice on Referencing Your Tenants.

14 August 2018  |  Admin  |  0 Comments

Advice on Screening/Referencing Potential Tenants

Finding the right tenant can be a stressful job, however by doing the right amount of homework, you can find the right tenant who will look after your investment property and pay you the correct rent on time here at I Am The Agent, we cannot stress how important tenant referencing is. It is therefore essential to reference every potential tenant thoroughly before you both sign the tenancy agreement.

At I Am The Agent, the online estate agent, we can help take out the stress by running the full range of background checks on your behalf with one of our comprehensive packages, or you can add this service for only £49.99 per tenant. Checkout the full range of what we can offer to help you rent out your property, from marketing and finding your tenant, through to credit checks and templates for writing your own tenancy agreement here. We can be with you every step of the way.

It always helps to know what you need to ensure your tenant/s are properly screened.

The first and easiest place to start, is to ensure each prospective tenant completes an application form. This should include all relevant personal, financial and employment information. It is also essential that it is stated in writing that this information provided by the tenant, will be used to carry out a background check, a credit check, as well as to obtain a criminal history report. The tenant will also need to know that the information they provide will be used to gain financial information, employment history and personal history (e.g. how they treated a previous rental property etc).

What to include in a Rental Application Form and What I Am The Agent will check with the whole shebang package!

  • Personal details - such as contact information and who to contact in an emergency
  • Rental period required
  • Amount of the rental discussed
  • Length of time spent at current address and at previous address
  • Identifying and accounting for any gaps in the tenant’s rental history over past couple of years
  • ID verification including proof of address/driver’s licence, passport details
  • Proof of income - bank account statement, confirmation of salary and payslips from current employer as well as proof that income can cover rent and reasonable living
  • Current employment status - details of current employer including contact numbers and address, length of time at current employer and information of any other employment within the past couple of years
  • Financial information - in addition to bank statements and bank account details, details will also be needed about any credit cards held and any debts that may require payment
  • Details of previous landlords so that they may be contacted for further referencing
  • Other information such as information about pets and number of occupants and whether they are smokers

Review all the information given and be aware that any missing information could be a potential ‘red flag’ that the tenant may be hiding something. 

Credit and Background Checks

 Using a company to run a credit report and/or background check is very important as this will give a full picture of your tenant’s credit history and any current debt and their past, it is essential. These reports will take into consideration any history of overdue payments, credit card accounts held, loans or mortgages held, an account balance and more serious issues such as bankruptcy, eviction history, criminal history or relevant public records. Any unpaid debts may indicate that your tenant will be unable to maintain regular rental payments.

Questions for Previous Landlords

 Information should be obtained from previous landlords including:

  • proof of promptly paid rent
  • the condition the property was left in/any damages to the property
  • amounts of any unpaid rent or unpaid utility bills
  • reasons why the tenant left the property
  • details of any disputes with neighbours etc
  • whether the tenant was entitled to the full rental deposit to be refunded - if not why?

 

Questions for Employers

Information should be obtained from employers about the tenant such as:

  • Length of the tenant’s employment contract
  • Confirmation of employment
  • Both in verbal and written to lower the chances of fraud
  • A payslip and bank statements from the tenant will provide proof of income as employers are not usually allowed to provide salary history or other private information.

Questions for the Tenant

If you have chosen to vet your tenant yourself, you might want to consider asking some of the following questions. You should bear in mind that there are restrictions and privacy laws in place through the Landlord and Tenant Act, so please do be careful not to overstep any boundaries.

  •  When are you looking to move?
  • Why are you moving from your previous property?
  • How many people will occupy the property?
  • How long do you want the property for?
  • Do you require furnished or unfurnished?
  • Do you have pets that will live with you?
  • Do you smoke?
  • Will you require a rental guarantor?
  • Do you play any musical instruments that might disturb neighbours?
  • Have you ever been evicted?

Should you prefer to take out the stress, I Am The Agent can offer tenant referencing for a low fee of just £49.99 per tenant. This can be added as an extra depending on the management package you choose from us, or is included as standard for up to two tenants if you select ‘The Whole Shebang’ package, which also includes marketing of your property on portals such as Rightmove and Zoopla, 24/7 support and ‘‘to let’ board.