How to Check and Carry Out Referencing on Potential Tenants
How to Check and Carry Out Referencing on Potential Tenants
In this article I am going to explain the whole process of how I go about dealing with tenant enquiries for our properties. I’m going to cover the first part of the tenant check and referencing process.
I use an online letting agent for getting our adverts onto the portals.
It is quite simple to write good advert copy and take some good quality pictures, though we suggest you have a look at the quality of photos from other adverts online at Rightmove and Zoopla and also see what other people say about their properties – and how they say it. Learn from the best agents out there!
Always make sure to take good quality pictures, preferably without there being a load of washing up featuring in the pictures and clothes strewn around the place. So it helps to have tidy tenants! Ideally, you should have taken pictures when the property is empty between tenants, so it is also showing just the furniture that you provide.
I like to have the copy describe the order of rooms from going in the front door to ending up in the bedrooms – in a sort of verbal tour. And of course, the pictures should match this order too. Don’t make the copy too long, but don’t make it too short either – and sell BENEFITS not features.
The copy should say what furnishing is included. This is especially the case where the photos feature items that belong to the tenants. It can be good to include a floor plan too.
Next, you simply upload the advert copy and photos to the online letting agent, who will normally, within the space of a few hours, have your shiny advert appearing live on the main portals.
We use Upad and they get the adverts onto Rightmove and Zoopla very quickly. The cost of a basic on line advert with most online letting agents is normally in the range £80 to £120 and for this the agent will feed enquiries to you by text and / or email at your option. You can choose whether the enquirers see your email address and/ or mobile number, so you have control over the first contact – i.e. whether they contact you first or whether you contact them.
We find it important to be clear in the advert copy about when the property will be available to move into and what sort of tenants we want and don’t want. So if you have a No Students / No DWP / No Pet rule you must say so in the advert itself. Also, if you think it should not be for sharers, you might say, “Suit a couple, or couple with a small family”. Obviously, what you say here will depend on the size of the property and the kind of people your research says would make the ideal tenants for the property.
How to Check and Reference Potential Tenants – The First Cut
This is important because the advert is the first “cut” in removing a lot of non-suitable tenants from contacting you in the first place – thus wasting their time (and yours).
OK, so next you will be receiving calls (or making calls) to enquirers.
I think it is essential to actually speak to tenant applicants. Text and email takes too long and anyway you can glean a lot from how they speak and what they tell you, what info they volunteer (and what they don’t) and the answers to the questions you ask them – which you should make a note of.
We like to take control of the call. First, we thank them for their call, tell them our name and obtain their name.
Second, and just in case they did not read the advert properly, we reiterate the address of the property, how much the rent and deposit is, when the property is available from and very briefly summarise what we offer in the way of furnishings – so either “unfurnished” or “white goods only” or “fully furnished”.
The next question we ask is: “Who is the property for?” So, if they are a group of four sharers and your ad said you wanted a small family for your two bedroom house, this is where you might reject them.
The next question is; “Where are you living now?” This is actually an open ended question, which should allow them to open up and tell you more about their situation. We are looking to find out where they live geographically, the type of property they are living in, if they are renting currently, how much rent they are paying and why they are moving.
How to Check and Reference Potential Tenants – Landlord References
You may need to probe a bit here if they are not forthcoming. If they are renting, ask if they are renting from a private landlord or a letting agent. Then you can ask what the landlord or letting agent is like. If they say the agent/ landlord is appalling and that is the reason they are moving, then they are probably the type of agent or landlord who will simply not be bothered to supply a reference. So note that for later!
Next, for non-students – you ask them what they do for a living. This should again allow them to open up with more info. Finally, you ask them what income they are on. (We require applicants’ combined incomes to be at least 2.5 times the rental. If it is not we will not be able to let to them, unless we accept guarantors).
Then you can ask if they have any questions for you. You should be able to tell them all about the property – including what the council tax amount is and roughly what the bills are.
If they (and you) are still keen, you can make an appointment to view the property – which you should reconfirm by email. If it is not for the same day, then reconfirm it on the actual viewing day – or even better, leave it to them to reconfirm it.
How to Check and Reference Potential Tenants – The Process and References
IMPORTANT: Keep reading even if you use a high street letting agent to find a tenant…!!
Along with the reconfirmation, we also send them a document explaining our full processes – what references we need to see and what personal documents we require too.
For the application, we first need:
- full name(s) (including any middle names)
- dates of birth.
- addresses (including full postcodes) and previous address and the dates at those addresses (month/year).
- their agreement to allow me to run a credit check on them and to check the references from previous landlords, and (if required), employers.
We also ask for the following:
To establish income and past rent payments, we need to see sight of their last 3 months original bank statements (or 6 months for the self- employed).The statement must show the address too. If not then ask for a utility bills that does.
A reference letter from their recent landlord. This must state: a) start and end dates of tenancy and rent amount expressed in amount per month b) whether this rent was always paid on time c) whether there were any arrears in rent or complaints regarding antisocial behaviour d) whether they would recommend them as being a reliable, honest and trustworthy tenant. e) whether they would let to them again.
ID – The photo page from their passport will show their photo as well as full name and date of birth.
An employers’ reference
For citizens of a non-EEA country, (the European Union states plus the states of Lichtenstein, Norway and Iceland or of Switzerland), we need to have sight of a permit or visa entitling them to work in the United Kingdom for at least the next two years. Depending on terms of the Brexit deal, we may also need this for EEA applicants. We hope not!
The references and documentation listed above is required in respect of each adult applicant.
The tenant who comes through first with satisfactory references and documents is asked to pay a Reservation Fee. They would lose this if they later changed their mind and were unable to take the property. Otherwise it is taken off the first months’ rent and deposit, payable when they sign the tenancy agreement.
This is a brief summary of our processes. For a more detailed process, see our two books for landlords below.
Important: Even if you use a “high street” letting agency to find and reference check a potential tenant, you should ask them to carry out all these checks and request copies of documents obtained. If they refuse, or start waffling on about GDPR / Data Protection as a reason why they cannot share information with you, they are just not understanding the nature of an “agency” relationship nor the real meaning of data protection rules. So go elsewhere and find another letting agent.
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We advise a range of organisations too to help them develop and improve their services and products for private landlords. David Lawrenson, founder of LettingFocus, also writes for property portals, speaks at property events and is regularly quoted by the media.
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