Reference Check For Tenants
If you’re against the clock to let out a property you have acquired through inheritance or some other unplanned means, it can be tempting to rent it to the first ‘nice’ person that comes along.
Paying two mortgages is no joke, after all. So, you sign them up and promise yourself you’ll check out their references later when you have the time.
But would that still be the case if you were armed with the fact that one national debt charity is currently dealing with around 1500 calls from tenants on a daily basis?
National Debtline states that one in 10 of their calls are from tenants struggling to pay the rent - and that number has risen in recent years.
Official advice from the Money Advice Trust and other financial assistance bodies insist rent should be a priority debt, and therefore the first bill to be paid on your list of outgoings.
However, that’s not always the case and it’s why it’s crucial that landlords check a prospective tenant’s details.
- Employment. Check with their employers that they do actually work there, for how long, and whether or not it’s a contract position rather than on-going employment. Ask for a wage slip or bank statement from the prospective tenant to allow you to verify that they can afford the rent ‘on paper.’
- Identity. Ensure the individual really is who they say they are by checking a passport or driving licence.
- Credit references. Do they have a bad credit score because they may have had problems paying bills in the past? You’ll need written permission from the tenant to perform a credit check and it will have an additional cost, but it can certainly be worth doing.
- Previous landlord. If they have rented before you could contact their last landlord and ask if he or she enjoyed a stress-free let and if the tenant always paid on time.
The bottom line – why you need to check
- Voiding your buy to let mortgage. One main reason you need to reference check is that failing to do so could result in your mortgage and landlord insurance becoming void. Many buy to let mortgage lenders insist tenant checks are carried out as part of the application process.
- Carrying out an eviction. One event guaranteed to be stressful, not to mention costly, is having to evict a tenant. Not only will you lose the rent for those months the tenant is still in the flat as you wait for the court system to kick into action, but you’ll also have to pay solicitor’s fees (depending on your landlord insurance policy). It’s also a difficult thing to have to do to another person, and it can be avoided by ensuring that the tenant can afford the proposed payments.
- Replacing property. Having to replace furniture, white goods and other items in your property which have been damaged by tenants could wipe out your profits.
Have we convinced you yet? Find more landlord advice, check out or dedicated resources. To chat with one of the team about our tenancy management services then call 0131 555 4444