Letting out a property might seem like an easy way to generate additional income – until you encounter a troublesome tenant, that is.
Late rent payment, noise complaints, property damage and expensive repairs can put a dent in your monthly income whilst also adding a great deal of hassle to running your property. A terrible tenant can turn your dream property investment into a nightmare – so how do you avoid them?
Running a background tenant check can help you spot problems a mile away. Here, we look at what your checks should include to make sure you reduce your risk when renting, and attract high quality, trustworthy tenants.
How to perform a tenant reference check
There are a few steps you should take to make sure the check is thorough and compliant.
The first is to make sure you run all the right checks, including:
- A credit check – you can access a tenant’s credit score and see their history of paying bills on time and get a picture of their financial background
- A criminal background check – check to see if your tenant has been charged with any criminal activity in the past
- Employment background screening – see what the tenant does for a living, and determine things like salary if possible
You may also want to contact previous landlords to get a picture of the tenant’s past behaviour in rentals, noting things like payment and condition the property was kept/left in.
As of February 2016, all landlords in England have a legal requirement to run Right to Rent checks. This means any tenant or lodger over the 18 must be screened by a landlord to ensure they are living legally in the UK, and therefore have the right to rent. Failing to check this can result in a fine of up to £3,000 per tenant. Additionally, it is illegal to discriminate when renting on the base of gender, disability, sexuality or religion, as outlined in a number of different Acts.
It can also help to be as precise as possible when listing your property to make sure you attract the right type of tenant, which can make your screening process a little easier as well.
Running a background check is crucial to ensure you lease your property to respectable, legal tenants who will treat your property with care.
If you feel you do not have the time to dedicate to thorough screening, or feel unsure about exactly what you should be doing and how to go about doing it, professional property management companies exist to help with this process. These companies understand what is required and have the time and dedicated resources available to ensure each background check is run thoroughly, compliantly and quickly.