Landlords Should Not Take Risks On Tenants

Tuesday, June 30, 2015
Landlords Should Not Take Risks On Tenants

Landlords Should Not Take Risks On Tenants

How To Get The Best Tenants For Rental Properties

All UK private rented sector landlords should be aware that they must take adequate precautions to ensure that they rent their property assets to reliable and trustworthy tenants or else the landlord could end up seriously out of pocket.

By far the best single piece of advice for landlords is to use the services of a reputable and professional letting agent to source tenants. Tenant find fees may vary depending on the agent but monthly management costs are around 10% of the rental income. Using a letting agent does provide landlords with some peace of mind, however, landlords should remember that this relationship will need to be constantly managed in order to ensure continued quality of service.

If landlords don’t use the services offered by a professional letting agency then the duty of care to perform background checks on all potential tenants, arrange tenancy agreements, secure deposits and make any property repairs required falls directly to the landlord.

If landlords prefer to source and vet tenants themselves, there are a few pieces of advice that they need to follow:

  • Ask prospective tenants to complete an application form to provide basic information that can be verified including – details of their last three years residences, date of birth, National Insurance number, a minimum of two referees and next of kin details.
  • Request to see original proofs of identity including driving licence or valid passports and take copies. Two forms of identity are better than one and should be checked against each other to make sure they match.
  • Ask to see tenant applicants last six months bank statements and recent utility bills – checking the name and address at the top of each page of the statement matches other forms of identification presented.
  • Always use a professional tenant referencing for tenant applicant background and credit checks. A small investment up front could save landlords a small fortune later on. If the reference comes back with any doubt, disregard the applicant immediately.
  • Landlords should utilise Rent Protection insurance after successfully tenant referencing applicants, prices start form just £55pa.
  • Landlords should make regular periodic visits to their rental properties, every 3 -6 months, and tenants should be given at least 24 hours notice in writing prior to the visit.
  • Landlords should ensure that they have adequate landlords buildings insurance to cover the fabric of the rental property and
  • Take a deposit to cover damage property and encourage the tenant not to simply default on the last month’s rent.
  • Build the cost of Tenant Liability insurance into the monthly rental price to cover accidental damage to the rental property that could be caused by the tenant.
  • Advise tenants to take out their own Tenants Contents insurance policy to cover their belongings and possessions in the rental property as these are not usually covered under landlord insurance policies.
  • Serve tenants with a Section 21 notice on the day they move in. Tenants should sign a copy of the notice after the deposit has been lodged in one of the three Government approved tenancy deposit protection schemes.

Following the simple tips given above should aid landlords to get more reliable and trustworthy tenants

This was written by Mike Clarke. Posted on at 11:30 am. Filed under Insurance, Referencing. Tagged , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.