The landlord tenant referencing is the best way through which landlords can make sure that their rental property is in the right hands. It is an exciting journey for both landlord and tenant when a new tenant comes to live in their rental property. After all, it can turn out to be a long, mutually-beneficial relationship. However, it is the responsibility of the landlords to ensure that the tenants are who they say they are. And there is no better way of doing this other than landlord tenant referencing.
The tenant referencing can help landlords in ensuring if their tenants would be able to afford monthly rent or not. It is very important to find the right tenants for your property. It would be beneficial if you hire a company for the tenant referencing services. But if you are going to do it on your own, you must know the right procedure to do it.
How Much Time Does Tenant Referencing Take?
In theoretical life, tenant referencing must not take more than three days. But it all depends on the tenant’s previous landlord and employer. The process will take as much time as much they will take to provide you with the information you require to check their background.
To begin with, you must ask your tenants for their ID and other documents along with their written permission to allow you to check their background. Many landlords believe that they must do the referencing on their own because they think that they will carry out the process more thoroughly and avoid the agent’s fee. However, you can also hire an agency that offers these services. It can be hassling for you but for an agency, it is just a cup of tea.
Checklist for Tenant Screening
No matter if you are doing the tenant screening on your own or hiring a letting agent to do so, it is essential that you do it properly. After all, it is a process that will save you a lot of time and money in the coming future.
Keeping a checklist handy will help you in making a clear picture of your tenant without much hassle. And along with that, you also need to use your judgment. If you find something in their past that bothers you, you must ask your tenants for an explanation. If they accept a mistake, there is no harm in letting them in your property.
Here is the tenant screening checklist that will help you.
- Reference From The Employer
Having their employer’s reference will help you in learning if they are working in the company they said they are and their stated salary too. For guidance, you must check if the tenant’s salary is at least 2.5 times of their annual rent. This will ensure if they will be able to keep up with the monthly rental payments or not and still have enough remaining to survive.
- Reference From The Previous Landlord
When you are renting your property to a tenant, you expect them to take care of your property. You also expect them to pay your monthly rent and not bother you at any cost. You must ask their previous landlords about their overall behavior and how they were as tenants. You must ask if they were reasonable to deal with or not. However, you may find a landlord, who just wants to get rid of his tenants and would say everything to impress you. In such a case, your gut feeling will help. Even if the landlord tells you something negative about the tenant, you must give the tenant a chance to explain their side of the story.
- Tenant’s Credit Check
There are some agencies that can help you in getting the individual’s credit check for the past six years. A credit score of 600 or above is satisfying enough to let a tenant live in your property. At the same time, you must also keep in mind that younger tenants will have lower ratings in comparison to others because they have not had enough time to build up a good credit score.
- Performing A Credit Check
Carrying out tenant credit check yourself is a simple task. First of all, you will require tenant’s permission to begin with checking. You can use any of the main three credit bureaus i.e. Experian, Transunion or Equifax. Or you can hire a company that combines the score from all of these three.
- Check Tenant’s Guarantor
There are some tenants like students, who are not as financially as someone, who has full-time employment. In such cases, you might need a guarantor for them, who will take the rent’s responsibility if the tenant is not able to pay rent. To perform tenant guarantor check, you require their permission too. The guarantor will most probably be a close friend, relative or employer of the tenant. You must also find out if they are homeowner themselves or not.
How Beneficial are the Background Checks?
If you are letting your property for the first time, you are most likely to be really excited about the new experience. This also means that you must not skip any of the steps of landlord tenant referencing. This will ensure that only potential tenants get to live in your property, which will take care of your property and will pay monthly rent in a timely manner.
Letting your Property to Businesses
Letting your property to businesses is similar to letting private tenants live in your property. You must carry out the credit check even if you are going to let out your commercial property. Even a previous landlord check on the business owner won’t do any harm.
For landlords, who are going to let their property for the first time, they must hire an agency that will provide them with the best tenant referencing services. Because they do such checks on a regular basis and it won’t as hassling for them as it would be for you. Take time to make the right decision.
Kattie Myra is the passionate blogger of the leading brand Tenant Eviction Service. It offers the professional tenant eviction services and property management services for landlords in London. Follow me on facebook for more updates.