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Monthly Archive March 2020

Vetting tenants: what are the red flags?

As a landlord, it’s quite hard to get the perfect tenant. Renting out is a lottery, and there’s any chance that somebody can come in and cause huge amounts of damage to your property and pockets. That’s why vetting tenants is important, but can you really tell whether a potential tenant is going to be a nightmare before they sign the lease? The short answer is no, but there are some red flags that can warn you.

In this post, we’ll explain what you should look out for, if you want to avoid a long and painful tenancy term.

 

Bad credit

If there’s anything that can suggest whether your future tenant will pay their rent on time, it’s their credit score. This is arguably the most important part of vetting for tenants, because a low credit score should be an absolute dealbreaker. We’d say that 620-650 is an absolute minimum to allow, but that still isn’t great. Try to get a tenant with a credit score as high as possible.

 

Criminal record

Another huge red flag. Unless it's something that can be explained, run for the hills. Try to get more information on this, because there is a huge difference between somebody that ran a red light in 1998 and somebody that murdered their landlord.

 

Multiple criminal convictions

If the last one is a red flag, this is a bigger warning. Parking tickets and the like aren’t necessarily indicative of a bad tenant, but a general rule of thumb is that if somebody has been caught breaking the law on public record three times, they might break the terms of your tenancy agreement. Have a think, does their criminal record scream “I don’t follow rules”? Or “I’m violent”? Or “I don’t pay for things”? It should help.

 

Offering to pay in cash

If a tenant offers to pay for a long-term upfront, there should be some suspicion on your end. Obviously it isn’t completely unheard of, and some tenants do have good reasons for this, but you should definitely make sure you hear their reasoning. There have been cases of people paying for 6 months in advance with drug money, and using the property for illegal activities.

 

DSS tenants

If you want a perfect tenant, DSS tenants might not be the best place to look. Of course the majority of people on housing benefits are good tenants, but there are a lot of bad eggs in that mix.

DSS tenants receive extra money from the government to help with living expenses i.e. rent, but unfortunately, they get a bad rap for some claimants keeping this extra allowance, which hits the landlord in the pockets.

Again, this isn’t the majority by any means, just know the risks.

 

The tenant throws a lowball

Some potential tenants will try their luck and haggle over the rent. There’s nothing wrong with this at all, but in certain circumstances, it’ll expose how difficult it can be to deal with them in the future.

If the property market has taken a hit, and every home has dropped in price, this could just point to a tenant that is up to date and savvy. This could be a good tenant, as they should know their own responsibilities quite well. As well as that, a little flexibility on rent is fine.

If you have a ton of interest from prospective tenants at the price you’ve set, it just means they’re being awkward.

This person will be a lot more likely to complain about everything, expect purely cosmetic issues to be fixed from your pocket and more.

 

Be patient

While an empty property isn’t collecting rent, it’s usually best to wait for the right tenant to come along.

It’s true, the longer a property remains vacant the more expensive it becomes for the landlord. Consequently, landlords are often inclined to accept the first tenant that comes along. While that may seem like the financially safe solution, it can often have the opposite affect. The fact is, finding a bad tenant quickly will cost you more than finding a good tenant slowly.

 

It’s important to take time over vetting your prospective tenants and making sure they’re right for both you and the property.

 

Too much effort?

Our fully managed service will vet the tenants for you, and we’ll provide hassle-free long-term guaranteed rent each and every month to boot. Find out how you can really benefit with our Guaranteed Rent Scheme by clicking the “contact us” button above.