Efficient Tenant Referencing and Why you definitely Need it?
Thoroughly referencing your prospective tenants before signing a lease is not only your lawful right as a landlord but certainly a must for everyone renting in the UK and in London especially.
The screening process is anything but time-consuming, so there’s no reasonable excuse to skip it, after all, referencing your tenant is the easiest way to assure that you won’t be dealing with a disastrous person, who will overdue the monthly payments, to begin with.
We get that finding a tenant quickly is really an important task, especially if you can’t afford void periods, still, this shouldn’t be a reason to compromise – at the end of the day it’s your home we’re talking about and what’s the point of having a renter at all costs if he or she will constantly delays the rent.
Efficient tenant referencing is the thing you need if you want to lease your home to someone reliable, it’s somehow like the quality assurance process, which nobody would miss before launching anything on the market.
Still, many landlords keep on doing the same mistakes, which cost them dearly afterwards.
- Accepting the first tenants that come along, just to start the rent rolling in.
- Not referencing their applicants (whatever the reason).
In the long run, rushing to find less than the adequate tenant is far more expensive than extending in time the void period in order to find a suitable tenant.
Yes, it is true that even if your tenant referencing is beyond passable, there’s still a chance to end up with a nightmare renter but at least the chance for this to happen is significantly lower.
All you need to know about the Referencing Process
Probably many landlords have their own methods of referencing tenants, but still, there are some similarities, which we’re pretty sure that you can use as well or at least will find helpful.
So it's time to head up straight to the list, we've gathered for you.
The personal impression always matters
Always meet with your prospective tenants, no matter how busy your day is or how good is the letting agency you’ve chosen.
Your personal impression matters and the chances are that it won’t mislead you. All those new-age life perspectives tell us to trust our intuition, so maybe this is the perfect opportunity to try this piece of advice in practice.
Your gut instinct got you covered so never sign a contract, with a person you’ve just met and seen for the very first time.
emember - If you’re not feeling completely comfortable with or around your prospective tenants, don’t try to convince yourself that they’re worth the hassle, even if your letting agent says otherwise. So let them go and find the right ones. After all, the numbers are not everything that matters.
It’s Mandatory to Check your prospective tenant’s I.D
This is not only advisable practice but your legal obligation as a landlord as well. Due to the landlord legislation, under section 22 of the Immigration Act 2014, Landlords in England are obliged to check their tenant’s proof of ID and citizenship to help in the prevention of illegal immigration.
And that’s not all - Failing to comply could result in penalties to the tune of £3,000. That’s why you must assure that your prospective tenants are indeed the ones they’re claiming to be, before you’ve even thought that they’re suitable candidates to occupy your place.
Require a Tenant Guarantor
According to many experienced landlords, this should be a prerequisite of all applicants. If a prospective tenant cannot provide a guarantor, you should carefully consider whether or not they are eligible to pass the screening process.
Visit the current home of your prospective tenant
This may seem like a bit of a hassle, but many landlords do it because it’s extremely effective – not to mention rather indicative. So try to arrange a visit to the current residency. This will give you the right idea about the standard of living and how the home is being taken care of.
Of course, your host will most likely make an extra effort to clean the property before your arrival but even so, this method is a really good indicator. After all you'll get the pretty good idea what he or she consideres to be in perfect condition and clean enough.
After all, you'll get the pretty good idea what he or she considers to be perfectly clean and in good condition in order to impress you. Have in mind that probably this is your prospective tenant very best so judge fair and choose wisely.
Spend some time on Social Media
Nowadays we're used to living some kind of a double life. One in the harsh reality and one online, so don’t hesitate to add your prospective tenant to your friend list on Facebook and spend some time on his or her
You can dig even further and check the profiles on LinkedIn, Twitter or/and Instagram as well.
Use Professional Tenant Referencing / Credit Check Service
Even though most of the letting agencies will provide a referencing service, which includes a credit check, there’s still more than one reason to use a professional tenant referencing company, especially if you’ve found your prospective tenant via friends or some of the numerous online platforms.
Don’t forget that since the “Tenant Fees Act 2019” started to swing into force on the 1st June 2019, certain fees were banned and restricted to be paid from your tenant’s pocket.
That’s why the chances are that your letting agencies will charge you a premium for conducting such kind of verification. Since you’re going to spend extra cash in every possible scenario, it’s best to rely on the professionals in this field. Plus, this would definitely be much more cost-effective than conducting the same service through a letting agent instead.
What does the Professional Tenant Referencing provide?
There is a good amount of Tenant Referencing Companies which offer basically everything – from routine credit check to electoral roll checks, employment verification, and affordability rating - each of these researches depends on the amount you’re ready to spend (probably one day there will be an option to submit even your future tenant’s blood type and revel his or hers full DNA profile).
There are plenty of different options and packages as well, offering by this profiled agencies (depending on the depth of interrogation and the amount you’re ready to pay) but basically, all of them generally include:
- Identity Check – this one doesn’t need a detailed description since you can do it yourself as well.
- Financial Check – they’ll get the financial background of your prospective tenants (e.g. CCJs and other adverse data) to assure you that they are capable of making the demanded rental payments.
- Tenant Risk score – based on the level of risk of letting a property to a particular tenant.
- Income Reference – which will verify the tenant’s employment and income status by confirming his or her job title, employment start date, the length of the employment and received monthly salary.
Previous Landlord Reference – we advise you to demand this one – after all, it’s the best way to be sure that you’re about to sign a contract with someone reliable enough.
What is a Tenancy Application Form and why you need it?
Basically, it’s a simple form which prospective tenants are asked to complete either before or during a viewing. Although it’s not a mandatory practice, it’s always good to have some extra information about your future renter, which may come in handy, when choosing the One to sign with. It should include the following:
- Details about the future tenancy: property address, rental period, number of applicants, proposed tenancy start date (and if there's such - end date, as well)
- Tenant’s personal details: name, contact details, and current address
- Details about the Current Landlord
- Details about the Referee / the Guarantor Details
- Employment details
- Details about all the people that will occupy the property
- Additional details (such as smoking and pet status)
As additional documentation you should ask for: Proof of identity and Proof of address. Here you can .
NB! – Have in mind that since it is designed for tenants to complete, this form is not set up as a pdf form, which can be completed online. It should be printed out and filled in by hand.
NB! - If you’re using a professional referencing service, they may verify the references on your behalf. Either way, ensure everyone gets contacted for proper verification.
The good news is that you can do all of the above for FREE, so there really are no excuses to skip the process at once.
The two Warning Signs before signing a Tenancy agreement
If a potential tenant offers to pay in cash - If a tenant offers to pay the full amount of the fixed term rent up front in cash – that doesn’t mean financial stability but can actually be a classic sign of a criminal tenant, who wants to convert your property into a cannabis farm or worse. This offer is commonly combined with your tenant’s desire to keep you away from the property and should definitely raise a red flag.
Don’t trust the miserable ones - If you have applicants, who insist for immediate accommodation in this desperate times and try to persuade you to let them in without conducting the normal checks, just say “no”, no matter what heartbreaking reasons they may pull out. Too often, in this case, you’ll have to deal with a truly terrible tenants, so don’t allow any exceptions at all cost.
Do I need a Rent Guarantee and what does it cover me for?
It’s always good to know that someone has got you covered no matter what, so maybe you should consider a Rent Guarantee in case that something goes wrong even after you’ve carefully passed the entire tenant referencing process.
THe Rent Guarantee covers unpaid rent, while your tenant or ex-tenant is still in your residential property. You can make a claim once the rent has been overdue for a period of at least one calendar month. It covers you for up to £250,000 per claim and there’s also no limit to the number of claims you can make per year.
The cover will also pay 50% of the rent you had previously received, (for up to three months or until the property is leased, whichever happens first) while letting the property out so that any necessary or unforeseen repairs can take place.
As a tenant (especially one in London) there are surely some questions, which are bothering you once you've read our Landlord's Guide on Referencing. So we've gathered a bunch of advice for you, as well.
How to Successfully pass the Referencing process?
The constant rise in renters in the capital means that landlords have the opportunity to be picky, so it takes quite a lot to be the one who ends up living in the desired property. The tenant referencing process may be fairly simple to get through since you’re informed what the potential obstacles may be. So let’s get you through the whole process unharmed:
Being upfront matters
Don’t let anyone or anything speak for you. If there’s anything, (especially if it’s unpleasant one) that you feel your future landlord or letting agent should know, it is better if they learn it directly from you.
Things such as bad prior experiences with past landlords and the reasons behind any poor reference, or a sketchy credit rating are the type of things they’ll be interested in – so be upfront about it and don’t try to hide the truth away. We assure you that it will find its way to reach you and drag you to the bottom if you’re not well-prepared.
Being honest from the start is definitely the best possible strategy, which will prove that you’re a reliable person who can be trusted. The fact that you are willing to broach a subject that may not present you in a good light, shows that you have the guts to put your cards on the table and will surely be in your favour.
Get all your paperwork together on time
The tenant referencing process may be a real hassle with all those things that you should provide to your prominent future landlord, so if you’ve you’re among the ones who managed to deliver them on time, this is another plus on your table.
The paperwork you’ll need includes references for renting (both employer and previous/current landlords), bank statements, plus, passport and visa when necessary. Having these ready to produce immediately will cut down the time you’ll have to wait considerably, and could mean the difference between getting the tenancy or not. So you’d better have them ready in advance.
Inform the referees you’ve pointed out
All good tenant referencing checks will include at least one call to your employer and/or the previous landlord, so don’t accept that as another formality and don’t forget to inform your referees.
Secure yourself with a guarantor
It’s always a good idea to secure a guarantor before the tenant background search begins. That way, even if you can’t pass the credit check, you’ll have a guarantor’s details to hand out and you’ll be able to present your landlord or letting agent with a viable alternative.
Still, even if you’re renting is just about perfect, don’t just skip this one and reach closer to the desired property.
PS: It’s strongly advisable to make your own credit rating check, before beginning the process of finding a new place to call home.
Well after we’ve got you ready for the referencing process, don’t forget that you’ll need a proper thorough cleaning before leaving your former address. so don’t hesitate to call us to get the job flawlessly done.
And if you’re a landlord, just remember that a bright and clean property automatically means a higher paycheck each month - so spend some time to view our offers and get a quote to ensure that you’ll get nothing less than perfection.