Don’t make the rookie mistake of cutting corners
with reference checks – it’s a sure-fire way to wind up with a nightmare
tenant. A three-minute read.
When
it comes to tenant selection, there’s a saying that all landlords should heed:
Go with the right tenant, not the first tenant.
Sometimes,
landlords are so eager to see rent payments rolling in that they treat the
reference checking process as a tick-box exercise rather than an investigative
one.
But
rushing to greenlight the first person willing to take your property can come
back to haunt you.
What
do reference checks involve?
It’s
a complex process (for a full list get in touch with us here at Ridgewater
Sales and Lettings), but key aspects include:
·
ID checks (to make sure the candidate is who they
say they are)
- Credit history
- References from previous landlords and current employer
Credit
checks
County
court judgments and unpaid debts are obvious red flags, but it’s important to
delve deeper than that. You need to review a candidate’s full credit report and
get a clear overview of their financial commitments and history.
What
kind of outgoings do they have regarding credit cards, loans, and bills? It may
be that technically the candidate can afford the rent, but with their other
debt repayments, it would be a serious squeeze.
Also,
examine their track record when it comes to paying bills. A history of late
payments suggests that they’re disorganised with their finances – bad news if
you want the rent paid on time.
Landlord
references
References
from a candidate’s previous landlords are useful – up to a point. We know of
cases where a landlord has written a troublesome tenant a good reference just
to get shot of them (not ethical, but it happens).
If
you have doubts about a candidate’s suitability, don’t let a positive landlord
reference be the deciding factor in giving them a property.
Employer
references
It’s important
to check a candidate’s salary with their employer, but don’t take a company
email at face value (sometimes people get a ‘mate’ in HR to inflate their
earnings).
Ask
to see payslips and bank statements and ring the employer yourself to verify
the accuracy of the email’s contents.
Top
tip
Gambling
on a risky tenant can turn out to be a costly decision – so invest time and
energy in the tenant referencing process.
Get a
good letting agent on board if you’d like an expert to handle it for you.