How to vet tenants

4th June 2019 posted in LANDLORDS

As a landlord, you know many factors influence how straightforward your work is. However, of all the issues that impact on a landlord’s daily activities, the tenant is at the centre of everything. With the right tenant in place, being a landlord is simple, and the process runs like clockwork. Of course, any landlord who has had an unreasonable or questionable tenant in place will tell you how difficult the role can become.

Therefore, as finding your ideal tenant is essential, you need to know how to vet tenants. At Country Properties, we are pleased to say we have helped countless landlords vet tenants, and we are more than happy to assist you in this process, but you should familiarise yourself with the following steps that will help you vet tenants.

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Request an application from prospective tenants

A fantastic starting point for the vetting process is to have prospective tenants complete a form. This information provides you with a lot of relevant information about tenants, and you can ask them to include details of:

  • Financial history
  • Employment history
  • Personal information

 

When you request applications to be submitted, make sure you state that background checks, credit checks and other tests will be carried out and that by applying, the tenant provides authorisation for these checks.

Many people don’t like the idea of prying into people’s background and circumstances, but as a landlord, you let people into your property. Therefore, you need to carry out some checks on prospective tenants to ensure you find the most suitable candidate.

Things you should look out for in the application include:

  • Details regarding current and previous employers, including how long the applicant has been in their current post and whether they switch jobs regularly
  • The current income level of the tenant and whether this will be sufficient to cover the rent, living expenses and leave some money left over
  • Information relating to bank accounts and credit cards, including minimum monthly payments and balances, as this allows you to create a fuller picture of an applicant’s financial status and their ability to pay rent each month
  • Contact information for previous landlords, if any, including details about the property, level of rent and reasons for leaving
  • Contact information for any personal references and information on the nature of their relationship and how long they have known each other

Some prospective tenants may decide against completing this application form, but if they do, you may surmise that they wouldn’t be a suitable tenant. Once you have received application forms, review them, make sure there is no missing information and form initial conclusions on who the most suitable candidates are.

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What to look out for when running a credit check

The credit check test is essential, and there are several aspects landlords should consider, including; the applicant’s credit history, including any late payments, their credit debt and whether there is anything that indicates the applicant may have issues in making regular payments.

It is also worthwhile speaking with former landlords to ascertain what sort of tenant the applicant was. You might wish to ask if the tenant left any outstanding debt, whether they made late payments if the tenant cared for the property and would the landlord let to the tenant again in the future if the opportunity arose.

This last aspect is often the most illuminating. If the landlord is willing to let to the tenant again, they must be confident in the tenant, but if a landlord wouldn’t let to the tenant again, you must consider them a doubt. If a landlord wouldn’t let to the tenant again, and it isn’t apparent through their previous answers, ask them for further insight into the tenant.

It is also possible to contact the applicant’s employer. This conversation can provide insight into the applicant and can verify or disprove claims made in their application. If their employer states differences between what the application form says and their records, most landlords would start to be concerned.

Once you have narrowed down the potential tenants, take the time to speak with them and get to know them. This discussion will help you to gauge their personality and whether they will be a good fit for your rental property.

Vetting tenants are crucial, but it is understandable many landlords struggle with this work. If you are looking for assistance in vetting tenants and running your letting business, contact Country Properties, and we’ll be more than happy to help.