For reference... or not!

You may be surprised to know many landlords’ most important criteria when letting out their property is not how much rent they can achieve per calendar month, but getting the correct tenant for the property. Whether it be a fully managed let or a let only finding the correct tenant is paramount.

Many different factors make a suitable tenant for a landlord, and many of these things are personal to the landlord, the property, and the situation. Take the length of tenancy for instance, many landlords may think that the “perfect” tenant would stay for as long a term as possible, this reduces the costs associated with advertising and finding a new tenant. However, in some cases a family member may be due to move into the property in a year’s time, so a short-term tenant of a year or so may be perfect in that instance.

One aspect which is the same for all landlords is referencing. Tenant referencing involves finding and confirming information about a prospective tenant. This helps to make an informed decision on whether to rent your property to that individual or not. Referencing can reassure landlords that a tenant can pay their rent on time and offer an insight into how they will treat the property.

At Galbraith, we use an external company which provides a platform for tenants to upload information, and this information is then reviewed and verified to formulate a comprehensive reference on the tenant.

The areas looked at include affordability, address history, credit history, ID verification, fraud checks, and landlord/managing agent checks. These checks are factual and can go a long way in reassuring a landlord that the prospective tenant will look after the property as their own and take care of it as the landlord would.

Affordability

£Affordability looks at the prospective tenant’s ability to afford the rent by assessing the proposed rental amount against the applicant’s declared income. The income must equal to or more than 2.5 times the annual rent (or the individual proportion of the rent).

Full Income Check

This check looks to see if the declared income is earned and if it is likely to change. References are obtained from the prospective tenant’s current employer during the tenancy term.

Address History

Address history looks at the previous address history of the prospective tenant to ensure they are not trying to hide any detrimental information at an undisclosed address.

Credit History

Credit history checks the prospective tenant’s ability to handle their finances. Tenants will have to declare any detrimental credit history they may have encountered i.e. CCJs, and bankruptcies. The detrimental credit history checks are considered individually.

Identity Verification & Fraud Check

This check is to ensure that the tenant is who they say they are and verifies name, date of birth, and whether the person is still alive.

Landlord/Managing Agent Reference

For this check, the current landlord is contacted to check if the rent was paid on time, the tenant’s suitability, and if the landlord would rent to the tenant again.

These checks are not a fail-safe way of getting the “perfect tenant” however they do give you an idea of the tenant’s history. A landlord can take a decision on anything that is discovered during these checks, however it is always better to be fully informed before choosing a tenant. Having all the facts at your disposal from the outset will enable you to make an informed decision and start the tenancy off on the right note. n

Isla Shaw

01786 434622 isla.shaw@galbraithgroup.com