It still amazes me how many Landlords & Agents don’t reference tenants, or only carry out a basic credit score! Think about it, you don’t just hand over possessions to someone without them being a close friend or someone you trust; so why do landlords hand over a massive investment without ensuring they have done all they can to protect it?
A basic credit score is very subjective, all it will provide you with is a credit profile (CCJ’s, IVA’s, Bankruptcy). An individual who has never taken out credit will have a poorer credit score than someone who has numerous credit cards etc. While a credit score is useful it is not giving you the complete picture.
I have always fully referenced any prospective tenant, while this is not failsafe it will help me make an informed decision. Initially I will ask for all personal details i.e. Full Name, Address, DOB, National Insurance #, Telephone # and Next of Kin. With this information, you can carry out a basic credit score, N.B. you must have the tenants consent to carry out any searches. If a tenant vacates and they are not returning your calls you have the next of kin details to fall back on.
Previous landlord references are a must, ensure you obtain references from all their landlords not just their current one. There is good reason for this, if the current landlord wants the tenants out due to late rent payments they are likely to provide a favourable reference as he knows the tenant will no longer be his problem. The previous landlord has nothing to lose as the tenants are no longer in their property.
Employment reference, always ensure you get a landline telephone number and check the company is trading – it’s relatively easy to register a company. Asking for payslips is also a good way to establish authenticity.
Bank statements, these will give you an insight to their spending habits. You could have a tenant earning £100k but if their outgoings are above this meaning they are not as strong as you first thought. A bank statement can also be used as proof of address.
Character reference, people often say to me “what’s the point”, they will undoubtedly provide a glowing reference but that is not the reason for asking for one. As with next of kin this is another avenue to use if your tenant vacates owing rent or they have caused damage.
Always obtain two forms of identification. In February 2016, the government introduced ‘Right to Rent’ checks; this is a whole subject in itself, a landlord you must check that a tenant has the right to rent before letting them a property – a blog for another day!
There is much to take into consideration when letting your property, in my opinion full referencing is a must!
For more information contact Kavanagh & Co Lettings 0121 550 1384