How to avoid bad tenants

Posted: 4th Jun 2014

One of the most important facts of life for any landlord to grasp is that once you have agreed to let tenants move into your property, you effectively lose certain rights of ownership until such time as the agreement comes to an end and they move out.

A painful lesson

In some situations that can prove to be a painful reality if you are unfortunate enough to find yourself with problem tenants.

What this means for you as a landlord is that your selection processes for tenants have to be as effective as possible if they’re to help you avoid unintentionally letting people into your property who subsequently prove to be troublesome.

Just in case

For a start, you need to be fully aware of your legal rights and responsibilities in terms of rental agreements, deposit management and the like.

Having a landlord’s insurance policy in place, like those on offer from providers such as ourselves at Cover4LetProperty which cover malicious damage by tenants, might only be plain common sense.

Avoiding trouble

Almost inevitably, it’s better to avoid problems than to try and find ways to solve them. This leads into the subject of tenant vetting .

Here are a few things you may wish to consider before signing up with a new tenant:

  • interview them. This is not the same thing as a casual chat while showing them around your property. Instead, put 30 minutes to one side to sit down over a tea or coffee and have a chat with them. Try to find out something about their backgrounds, attitudes and views. It can be extremely helpful in helping to spot potential trouble. Remember your job here is to listen and assess rather than to use it as an opportunity to relate your life story to them;
  • take a credit reference check. This is fast and cost-effective. People with a bad credit history might cause you to think twice;
  • make sure to obtain and check several references. Think laterally here though and verify the source, as people are only likely to offer references they know will support them;
  • check directly with their last two landlords if possible;
  • ask their employer to verify their employment. You typically won’t get a lot of detail but you may at least be able to check that they are employed;
  • ask them to provide recent copies of their last utility bills plus details of their bank. You won’t be able to check their bank balance (unless they’re willing to show you statements) but at least that they have an account;
  • make it mandatory that they provide copies of their last two payslips. Their net monthly salary should be roughly 3-4 times larger than your monthly rent if they are to be able to afford it;
  • if they’re self-employed, you should ask to see copies of their bank statements showing the sums they are withdrawing by way of salary;
  • visit them in their current property;
  • ask to see copies of a passport to verify their identity;
  • see if they hold any existing credit cards.

Of course, almost any of the above can be manipulated and falsified but performing these checks may significantly reduce your chances of problems downstream.