Starting out in the buy-to-let market can be daunting, particularly when it comes to finding reliable and trustworthy tenants. What makes the perfect tenant?
Finding suitable tenants requires a targeted approach. Tenants fall roughly into several categories: students, young professionals, families, corporate, older singles/couples and housing benefit recipients. They all come with their pros and cons, so you need to decide which category will suit you and your property. If you prefer a young career couple, advertise in professional publications, rather than sticking a card up in the local shop window. If students are your preferred tenants, then contact the accommodation office of the nearest university and college. Many letting agents agree, that a corporate tenant is a safe bet. They usually want a minimum lease of one to two years, and often continue for several more. Another popular category is retired couples, who stay long-term and look after the property.
Proving Who They Are
The first thing that’s essential is to get applicants to verify their identities; passports or photo driving licences are two good options. It’s surprising how many people apply under false names.
They should complete an application form, covering the following information:
- Personal details, including time at current address and landlord (if applicable)
- Tenancy details: period of tenancy, number of applicants, date to move in
- Employment details, including salary
- Misc: smoker, pet owner, etc.
You will need to contact the referee and/or guarantor, plus it would be a good idea to contact previous landlords. Ask to see either payslips or current bank statements to verify their salary. This way you can gauge whether they can actually afford the property. You don’t want them to be defaulting or asking to sub-let.
Appearances can be deceiving, and even if the applicant drives a Ferrari, it’s prudent to do a thorough credit check. This will look into their financial history and current state. Some basic checks are free but to get peace of mind, it’s best to go to a reputable firm and pay the fee. You will need the tenant’s permission and for them to sign a release form. It’s worth noting that there are insurance policies available to protect against non-payment of rent by tenants. If this income is essential, if may be worth considering this.
While it is possible to do all the groundwork to ensure you’ve got suitable tenants, if you have multiple properties, it can consume a considerable amount of time and energy. It might be more cost effective to use a reputable online letting agent such as House Network.