The Importance of Reference Checks
The Importance of Reference Checks
Conducting reference checks is an essential part of selecting the right tenant for your property and should not be overlooked. By doing the right checks, you find out a lot about prospective tenants.
Such as, whether the tenant has a good credit history, whether their salary is sufficient to make the rent affordable and whether they have steady employment. It’s also important to collect the thoughts of any previous landlords, as well other character references to ensure the person is reliable and genuine.
The stats on eviction
According to statistics from a Ministry of Justice report from February 2018, in the UK every day there are nearly 170 evictions carried out. With the increasing number of people seeking to rent privately, there is increasing risk to landlords and agencies when selecting appropriate tenants.
How do we check?
There a number of methods when it comes to conducting reference checks. Appointing an experienced local agency to carry them out will offer you some peace of mind, knowing they can recognise the warning signs and have a level of intuition when it comes to establishing whether the applicant will maintain your property and pay their rent.
The types of checks you should expect are:
- Credit Check – Checking financial history, ensuring all re-payments are made reliably.
- Employer Reference – Checking their employment status, salary and track record.
- Character References – Usually two references from suitable referees.
- Previous Landlord References – Was rent paid on time? Was the property maintained well? Ensure no other complaints relating to tenant’s conduct.
- Suitability Interview – An informal interview to assess character and lifestyle
The tenant interview is only conducted by a few estate agents but we believe it is one of the most important methods of assessing tenants. The agent/landlord conducting the interview will need to be experienced and capable of detecting whether the tenant is just saying what you want to hear or is genuinely a suitable applicant. This is the test where you can measure the tenant’s motive for wishing to acquire the property.
What is the lifestyle they plan to lead while living in the property? What are the types of activities they expect to conduct at the property? Who will be staying in the property? The interview helps gauge how long you expect them to stay and whether they are the type of person to take pride in their home. It also helps understand what they may expect from you in return for their rent. Will they be reasonable about leaving at the end of the tenancy or agreeable when it comes to negotiation rent increases, and so forth. If this aspect is overlooked you commence a tenancy only knowing your tenant can pay the rent! Is that really good enough? From our experience there is a vast difference between a good and bad tenant and this can be hard to spot purely on the basis of references and financial details…
Here at Jameson and Partners, we take pride in carefully selecting appropriate tenants for our properties. And our landlords know they can rely on us to choose the right people for their property.
We recommend taking the risk out of the situation by appointing a diligent and highly experienced agency. The cost of choosing to wave appropriate references can be far far greater than the cost of conducting the right checks in the first place.
Please be aware that at present, the tenants pay an application fee to cover the referencing. However, new government legislation is expected to come into play in 2019, which will ban agents charging the tenants for these checks, meaning the landlord will have to cover this cost. Some landlords will be tempted to avoid these expenses, but in our opinion, this could be at great expense to themselves.
If you are a landlord and would like to appoint a trusted, local estate agency to select appropriate tenants for your property, contact the team at Jameson and Partners today.