Re-Engineering the Tenant Referencing and Sign Up Process
Ever wondered why letting agents take so long to complete reference and other checks on tenant applicants?
Well, one of the reasons is that they will outsource the job of referencing to a third party who then spend ages waiting for a response.
A standard letting agency will first typically ask a potential tenant to complete an application form, setting out all their personal details, including date of birth and addresses over the last 3 years and to provide full information on their current landlord (if they have one) as well as employer or accountant information (to validate employment and income).
The information thus provided is used (with the tenant’s consent) to run a credit check on them as well as to contact their employer and current landlord to verify their current employment and past conduct as tenants respectively.
Usually the letting agent will be given a decision: ACCEPT or FAIL. If the tenant has failed, the next route may be to seek a guarantor (if that is acceptable to the landlord). The guarantor would have to provide the same information as the failed applicant.
The problem is that waiting for former landlords and employers to respond to reference requests can take a lot of time. And providing a response to such requests is not something that will be at the top of a landlords or employers “to do” list for the day.
For my properties, I use an online letting agent to get the places advertised on Rightmove and the other portals, but I then conduct all the viewings and referencing checks myself.
And it is in the method by which I get the reference checks done, that I have totally re-engineered the process.
Re-Engineering the Sign Up Process
When I have found an applicant who likes the property and who sounds like they would fit my criteria – suitable income, good credit history etc. – then what I do is ask them to obtain the former landlord and employer reference.
I tell them I cannot hold the property for them until I have seen these references and completed my other checks. (As well as the references, I ask for 3 months proof of address and I always want to see their last 3 months bank statements, passport, and if from outside the EU, their UK work permit. The bank statements are used to check income is coming in and rent has been going out – basically the statement act as a double check on the other information).
As the applicant is highly motivated to beat other applicants to my always competitively priced properties, they are also very motivated to supply all the documents I need and to put pressure on former landlords and employers to get the references to me.
By putting them “on the case”, I ensure that I get the employer and past landlord references back far quicker than a letting agency ever gets them back. And this all means that I can stop doing viewings far earlier – thus hugely cutting down on my own time, hassle and costs, as well as getting my time back for myself and my family once again!
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