Finding the right tenant for your properties can mean reduced void periods, fewer rent arrears and increased landlord satisfaction. But how do you find the right tenant?
There are quite a few things to look out for in a rental application from a tenant. Your agency will need to properly screen each prospect to make sure that they will be a suitable tenant. One of the main concerns that letting agents and landlords have is worrying if a tenant will be able to pay their rent on time.
By initially selecting the right tenant, you can eliminate the likeness of stress and conflict later down the line.
Checking potential tenants’ credit scores will help you to determine whether or not they will be able to pay their rent on time. Current debts, payment history and overall credit score can be seen through a tenant’s credit report.
For tenants that do not have a credit score or provide a sub-par credit score, it is possible to request more information that will help you determine if the tenant will be able to pay their rent.
There are many software that will help your agency to check tenants’ credit scores such as TransUnion. This software platform allows letting agents to access and evaluate a potential tenant’s ability to pay their rent quickly and efficiently. This comprehensive check gives property managers an accurate picture of their potential tenants within seconds.
Checking a tenant’s employment history and current employment status can also help you determine if a tenant will be able to pay their rent. By acquiring this information, you will also be able to call the workplaces to verify that the tenant has the job.
Employees will not be able to give you detailed information about the tenant, but they will be able to verify the time that they have been working for the company and they can verify the current income level that they are receiving.
Software such as Advanced Tenant Referencing will help you to verify the employment information sent by tenants rather than you having to do it manually – saving your agency both time and money. With a simple push of a button, the information is sent out for reference. Your agency can also easily track the progress of the reference. Your team, the landlord and the tenant will be informed of the outcome.
Proof of income is arguably the most important thing to look out for in a rental application as this will definitely determine whether a tenant will be able to pay their rent. It is common that landlords will check their payslips or any tax returns that the tenant receives. Your agency can also request other documents that show income such as bank statements.
Using Advanced Tenant Referencing will also help you to verify potential tenants’ current level of income and has the tools to perform an affordability analysis. Rather than your agency having to manually verify documents with banks or debate about the validity of documents, the software will do this for you.
To ensure that you are taking on the right tenants, your letting agency should request contacts to provide landlord references. This step is often overlooked but is very important as previous landlords might be able to flag any issues that they had with tenants in the past.
You will also be able to ask them important questions surrounding rent payments or any specific areas that you might need to know. If you are unable to contact previous landlords, or if the tenant has not had any previous landlords, there is software available that will help you screen your potential tenants based on other information.
According to Homeppl, around 2% of tenant applications are either completely fraudulent or contain fraudulent information.
Using software such as Homeppl will actually help to filter out fraudulent applications with their automated platform by using data points and fraud detection tools.
Lifestyle Choices and Personality
The lifestyle choices of potential tenants play a big role in whether certain tenants will be a good fit for the property or not. It is important that you consider whether the potential tenant has pets or if they smoke, for example.
Completing a personal background check that may identify any potential issues is also beneficial. For example, your agency might run a criminal background check that could identify any felony charges or misdemeanours that the tenant was involved in.
There are also more general questions that need to figure out important interests that a tenant may have, especially if they have to share a space with other tenants in communal areas. For example, if the potential tenant is a young university student that is likely to have guests over frequently, they might not be the best fit for a property that already has working professionals living there that enjoy peace and quiet.
Carefully considering tenants’ lifestyles and personalities will help you to lessen the chances of conflict and frustration in the future.
*Disclaimer: please note this blog is only intended as a guide, and is not to be taken as legal advice*