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Should You Do a Tenant Reference Check?

Tags:
  • landlord,
  • landlords,
  • management,
  • renting,
  • tenancy,
  • tenant reference check,
  • tenants

Letting out your property can be a daunting thought for many. How can you ensure your next tenant will be a good tenant?

Answer: with a tenant reference check.

But, many landlords are still in the dark about what the vetting process involves. So, what is it and why is it worth doing? Time to take a closer look.

What is a Tenant Check?

A tenant reference check is simply a way of determining whether a prospective tenant is reliable, and able to keep up with monthly rent payments.

Of course, there’s no way of guaranteeing how someone will behave in the future. However, tenant checks can give you an insight into who you’re letting your property out to.

Tenant Referencing – What Do They Check?

So, what do landlords check for?

Remember – this is about safeguarding both you and your property. You’ll want to ensure a potential tenant is who they say they are, and that they can keep up with their contractual obligations.

For this reason, the vetting process looks at a number of different areas, which can include:

Proof of Identity

Photo ID is usually preferable, such as a driver’s license or passport.

If this isn’t available, other forms of identification are sometimes accepted, such as a signed bank card. It’s up to you what to accept during the rent check.

Financial Situation

Most landlords’ primary concern is whether a potential tenant will be able to keep up with their monthly rental obligations.

Checking their background allows you to see proof of this. Usually, this part of the referencing process includes:

  • Proof of employment – such as a contract, a letter from an employer and/or recent payslips
  • Bank statements (particularly if someone is self-employed)
  • Proof of benefits claims (if applicable)

Credit Score

For a landlord, a tenant credit check is often seen as essential. However, when it comes to poor credit history, only CCJs and bankruptcy are public.

For this reason, their current financial situation is much more telling than a tenant credit check. Just because someone has fallen into rent arrears in the past doesn’t mean they will do now!

Unless, of course, their recent circumstances prove otherwise.

Right to Rent

It’s essential that your future tenant has a right to rent in the UK.

There are fines issued for private landlords who let to those not legally allowed to rent.

Guarantor Information

If you’re concerned that a certain tenant may not be able to afford their rent, you can ask for a guarantor. This is particularly prevalent in student properties, for example.

Sometimes, you can ask the guarantor to agree to a credit check. It’s also common to ask for recent payslips to ensure the rent can be paid should the tenant fail to do so.

If no guarantor is available, you can ask for a higher deposit upfront to cover any potential problems that may arise.

A Previous Landlord Reference

Ideally, you’re hoping for a reference that demonstrates that the tenant is reliable and trustworthy. This not only includes paying rent on time, but also respecting both the property and the landlord.

Questions to ask the landlord include:

  • Did the tenant have any outstanding rent?
  • Did the tenant cause any damage to the rental property?
  • Did the tenant have any problems with the neighbours?
  • Did the tenant receive their deposit back? If not, why?
  • Would they rent to this tenant again?

If a prospective tenant is unwilling to provide the necessary contact details, this may send alarm bells ringing.

Details of Previous Address

You may also want to see proof of previous addresses, to ensure the tenant is who they say they are.

 

You may also like: Landlord Deposit Rules: What You Need to Know

 

How to Run a Background Check on a Tenant

Some landlords are happy to ask for the necessary information themselves.

This can be a time-consuming process, as you’ll need to gather a number of relevant details, such as guarantor information. You’ll also need to reach out to the employer, establish whether the potential tenant has any current debt and interview them.

Questions you may want to ask the tenant include:

  • Will they be renting with pets?
  • Will they have any family or friends staying with them regularly?
  • What’s their working schedule like? Do they work night shifts?
  • Have they read the tenancy agreement?

If you’re using a letting agent, they should arrange the vetting process on your behalf.

Should You Use a Tenant Referencing Service?

To ensure the background check is as thorough as possible, it’s recommended to use a professional tenant referencing company. For example, the National Landlords Association can run a check for you.

While these won’t be free, they will help minimise the risk of rent arrears or other potential issues that may arise.

For many, the extra cost is worth the peace of mind.

How Long Does Tenant Referencing Take?

The length of the process depends entirely on each individual situation.

Sometimes, if everything runs smoothly, your referencing company can complete the check in around 48 hours.

But, this isn’t always the case. The process can be delayed by a number of factors, such as:

  • If a previous landlord drags their feet about giving a reference
  • If a potential tenant takes a long time gathering necessary financial details
  • If a potential tenant is unemployed, or a freelancer
  • If a potential tenant cannot get a guarantor

A tenant reference check gives many landlords peace of mind. We can also help remove the stress of letting your property, with our professional inventory management services. We’ll ensure you’re compliant with all regulations, protecting both you and your property. Find out more about our services here.

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