When it comes to being a Landlord, tenant referencing should always be top of your agenda!
A “bad” tenant is every Landlord’s worst nightmare and can result in non-payment of rent, damage to your property, and upsetting the neighbours and other tenants with anti-social behaviour.
I have always been of the opinion that the best way to never have a bad tenant is never to let one step over the threshold of your property in the first place!
This is where tenant referencing and due diligence comes in!
A couple of weeks ago, I started a new discussion on Property Tribes to brainstorm the ULTIMATE way to vet a potential tenant.
There was a really great contribution from Glenn Ackroyd of National Property Group, who look after a number of our properties (and are highly recommended).
Glenn said:
“The common route is to simply ‘credit check’ – which we do. However, this is heavily reliant on computer scoring and not intelligence. For example, we see lots of tenants with good credit scores, but from our insight information on their credit files, we can see that they have had Payday loans – for us, that suggests an alarm bell down the road.
Because we have our own in-house credit check system, we have access to this information.
Also, our best check is visiting a tenant’s home – I’ve got a great example tonight on one of my properties. We have a process whereby any tenants who pass credit scoring are approved in principle, subject to home vetting. Here we’ll meet the tenant and their home owner guarantor (we check land registry to confirm ownership).
We use our Imfuna digital inventory app to photo tenant/guarantor. This is date and geo-tag stamped. We then take photo and address ID. We then photo tenants existing lounge, kitchen and garden recording notes whether clean, tidy and house proud.
So, back to my house tonight. A tenant applied with cats – We were warned that she’d been evicted for having ‘10 cats’ at her last house. Unhappy landlord. Our chap visited – the house was spotless. Cats yes, but house trained. For me that is perfect. Also, imagine how hard it is for this tenant to find a house? How likely is it that she’ll be moving from my house now? Now of course if our landlord had a stipulation of no pets, we could also discover this on the home visit.
Home visits are vital to secure the best tenants and to deter the bad ones from applying. It’s our best filter”.
This discussion on tenant referencing caught the eye of the organisers of the Property Business Show 2012 in London, and I was subsequently asked to host the debate on Tenant Referencing at the show!
The panellists were Paul Routledge, Landlord and founder of Landlord Referencing Services, Lynne Abbess, Lawyer & Founder of Landlord Assurance, and Andy Halstead of Let Alliance.
The session was lively with lots of input from the delegates and the one thing that really came out of it, was that a tenant’s “lifestyle” was the unquantifiable bit, the aspect that was the hardest to reference.
In this interview following the panel, Paul Routledge told me that this is what inspired him to found Landlord Referencing Services and how the “lifestyle” of a tenant can take some extreme forms!
So unless you want “Moo Cow” or a similarly disruptive tenant in your property, be sure to take the following steps:
1. Credit reference
2. Previous Landlord reference
3. Employer’s reference
4. Visit the tenant in their existing property
5. Check with Landlord Referencing Services
6. Get a Rental Guarantor for the tenant.
7. Consider taking out some form of rent insurance.
8. There’s also always good old “gut instinct” too!!
Finally, if you do have the misfortune to acquire a bad tenant, then please use my FREE Section 21 Calculator to produce the necessary documentation.
Join the discussion on tenant referencing >>> here.
Vanessa Warwick
Follow me on Twitter: @4_walls
Vanessa Warwick is a former TV presenter, turned professional residential Landlord, consultant, and speaker. Along with her husband Nick Tadd, she founded Property Tribes, which is now the U.K.’s busiest on-line Landlord and investor community. Nick and Vanessa have just launched their new tech product, Yulpa, an on-line “property office/filo-fax” that helps you organise and manage your entire property life in one place. It comes with an iPhone app that does auto due diligence on any property being considered for purchase.
Vanessa and Nick advocate the use of technology and digital and social communications in property, and speak at events all over the U.K. as well as consulting for the BBC on property. They invest mainly in flats London and family houses in the South East and are also big advocates of holiday lets, having two upmarket holiday lets on the South Coast that achieve above-average occupancy thanks to the couple’s web efforts and vertical marketing strategies.
