Renting has become increasingly popular in the UK, in turn boosting the demand for residential property to buy or let. If you're thinking about buying with the intention of letting the property, then you will want to fill it up quickly with tenants in order to meet your monthly mortgage repayments.
However, spending some time researching your prospective inhabitants will pay off in the long run, when you find an honest individual who will both look after your property and pay the rent promptly.
How do you find a tenant?
The first route is to consider using a reputable agency. This is useful if you are new to the market and have little experience of being a landlord. The agency will offer information and advice on how to prepare and present your property to prospective tenants and will also be efficient at getting full references.
Once the tenant has been signed up, you can take full control on the management side of the lease. Be wary though, as agencies may have a series of hidden charges and some may even have a continuing fee for every time the tenancy agreement is renewed.
Another way to find tenants is to simply go it alone. There are several ways to find a tenant yourself:
There are various websites on the internet that will advertise your property to prospective tenants for little or no cost.
You can post a notice in a local shop window for a small fee or a local company notice board, especially if the firm is thinking of relocating to your area. Local newsletters and newspapers are also a great way to advertise rental space.
Landlord accreditation schemes are often run by local councils. You will have to sign up to a code of conduct and do some training, and will then be recognised as a landlord who adheres to good standards. Once accredited, other benefits include support and advice on rental issues and likely discounts from solicitors, insurance firms, energy suppliers, inventory and even property maintenance. You will also have, of course, a free platform from which to market your properties and the reassurance that your accreditation will attract responsible tenants who are looking for reputable standards.
How do you check out your tenant?
Whether you are using an agency, or sourcing tenants yourself, you will need potential renters to complete a comprehensive application. This should detail the purpose of property use, contact details and a tenant's employment history. The latter is particularly important because it will be an indicator of whether they are reliable, or more likely to flit between projects.
The most important aspect of the application will be the references, which should come from a past employer, bank and previous landlord. Family members or friends can become guarantors, but not referees, for obvious reasons. Employer references are the most valuable as they will be proof that the tenant will be able to pay the monthly rent, whilst the existing landlord reference may not be entirely accurate, especially if they are eager to get rid of the individual.
An online firm, or one recommended by an insurer or landlords' association, can be used to carry out a full credit check of the tenant, and this will include any County Court Judgments (CCJs). A CCJ is issued if an individual owes money, and has failed to respond to a court action taken against them.
Finally, there is a level of intuition which is imbued in more experienced landlords. Of course 'gut feeling' is not a guarantee, but, more often than not, it can tell you if a tenant is right for your property or not.