In 2012, the number of ‘bad tenants’ peaked in the UK, as in that year 99,000 tenants didn’t pay rent for at least two months according to LSL Property Services. Around half of landlords have to deal with tenants who don’t pay their rent at some point but it doesn’t have to be an inevitability for you. The best way to spot a good tenant, avoid a bad tenant – and understand how to distinguish between the two – is to carry out some fairly extensive checks and have some realistic contingencies in place.
Good tenants are those that pay rent on time and understand what their tenancy requires of them. So, carrying out financial checks that will give you a good idea of whether the tenant can afford the rent they’re signing up for is essential. Speak to former landlords too, as this will shed light on what the tenant was like to deal with. If you pick up the phone – as opposed to just using a tick box referencing service – you can get a lot more useful information.
Bad tenants often target private landlords who aren’t using a letting agent, as they hope they will encounter less rigorous checks. There’s no need to sign up for a letting agent service if you don’t want to but if you’re a private landlord looking for tenants you need to be extra careful about finding out who the tenant is, what they do and whether they can genuinely afford to rent.
Right to rent check
Tenants must have the right to rent in the UK and it’s a landlord’s obligation to check this now. Bad tenants without the right to rent can cost a landlord up to £3,000 per tenant in penalties. You can check a tenant isn’t going to cause this kind of trouble by asking for identity documents that prove the right to rent.
If you have any doubts at all about the tenant’s ability to cover rent payments ask them to provide a guarantor. Guarantors stand surety for the tenant so, if the tenant is not able to make rent payments, you have the back up of the guarantor instead. Guarantors should be over 18, preferably a property owner and usually a close friend or relation of the tenant. Carry out the same rigorous checks on the guarantor as you would the tenant just in case they end up being your source of income one day.
Three monthly checks
Regular checks of the property should not be blocked by a good tenant. You need to give plenty of notice (at least 24 hours) and be respectful about not interrupting the tenant’s quiet enjoyment of the property. However, the tenant should not try to prevent the checks from being carried out. These checks will give you an opportunity to check up on the tenant, see the way the property is being treated and to stay on top of maintenance and upkeep.
Sometimes, despite all good intentions and efforts, landlords still end up with a bad tenant and a difficult situation. Under those circumstances, taking legal advice can be the fastest and simplest way to ensure the tenant is removed and the property returned to you as soon as possible.