13:56 PM, 23rd April 2012, About 11 years ago 5
When it comes to being a Landlord, whether you self-manage or have a fully managed service, tenant referencing is a major priority and never a task to underestimate the importance of.
A “bad” tenant should be avoided at all costs. They can stop paying the rent, damage your property, and their anti-social behaviour can cause problems with neighbours and other tenants alike that could have on-going “loss of rent” implications.
Unfortunately, unlike the picture above, tenants do not come with signs on them, nor do they look like they might cause problems, and it is only once they are in your property that the cracks start to appear!
The best way to never experience a bad tenant is actually very simple. I’ll share it with you now:
Never to let one step over the threshold of your property in the first place!
This is where tenant referencing and due diligence come in, and this was the recent topic of discussion on Property Tribes where the community brain-stormed the ULTIMATE way to vet a potential tenant.
There was a really great contribution from Glenn Ackroyd of National Property Group, who look after a number of our properties (and are highly recommended).
“The common route is to simply ‘credit check’ – which we do. However, this is heavily reliant on computer scoring and not intelligence. For example, we see lots of tenants with good credit scores, but from our insight information on their credit files, we can see that they have had Payday loans – for us, that suggests an alarm bell down the road.
Because we have our own in-house credit check system, we have access to this information.
Also, our best check is visiting a tenant’s home – I’ve got a great example tonight on one of my properties. We have a process whereby any tenants who pass credit scoring are approved in principle, subject to home vetting. Here we’ll meet the tenant and their home owner guarantor (we check land registry to confirm ownership).
We use our Imfuna digital inventory app to photo tenant/guarantor. This is date and geo-tag stamped. We then take photo and address ID. We then photo tenants existing lounge, kitchen and garden recording notes whether clean, tidy and house proud.
So, back to my house tonight. A tenant applied with cats – We were warned that she’d been evicted for having ‘10 cats’ at her last house. Unhappy landlord. Our chap visited – the house was spotless. Cats yes, but house trained. For me that is perfect. Also, imagine how hard it is for this tenant to find a house? How likely is it that she’ll be moving from my house now? Now of course if our landlord had a stipulation of no pets, we could also discover this on the home visit.
Home visits are vital to secure the best tenants and to deter the bad ones from applying. It’s our best filter”.
Just last week, I was asked to host the debate on Tenant Referencing at the Property Business Show at Excel in London.
The panelists were Paul Routledge, Landlord and founder of Landlord Referencing Services, Lynne Abbess, Lawyer & Founder of Landlord Assurance, and Andy Halstead of Let Alliance.
One key thing that really came out of the session was that a tenant’s “lifestyle” was the unquantifiable bit, the aspect that was the hardest to reference & uncover and the bit that could potentially cause the most problems.
In this interview following the panel, Paul Routledge (who himself was stabbed five times in the head by a drug dealing tenant) told me that this is what inspired him to found Landlord Referencing Services and how the “lifestyle” of a tenant can take some extreme forms!
So unless you want “Moo Cow” or a similarly disruptive tenant in your property, be sure to take the following steps to avoid him/her:
2. Previous Landlord reference
3. Employer’s reference
4. Visit the tenant in their existing property
5. Check with Landlord Referencing Services and other landlord networking sites
6. Get a Rental Guarantor for the tenant
7. Consider taking out some form of rent insurance
8. There’s also always good old “gut instinct” too!!
Finally, if you do have the misfortune to acquire a bad tenant, then please use my FREE Section 21 Calculator to produce the necessary documentation.
Join the discussion on tenant referencing on Property Tribes >>> here.
16:27 PM, 25th April 2012, About 11 years ago
This is an excellent article - The interesting thing for us is that when we initially introduced Imfuna to our Property Managers, some where skeptical believing it would take longer - We had an Iphone go on the blink recently, so our PM had to revert to the old system and he was cursing for his Imfuna back 🙂
It is also interesting that you have Let Alliance on the panel, we've just started to use them based upon a recommendation to improve our tenant application process. We're now finding that we are getting 5 applications for some houses at once, so the assistance of dedicated resource is great. They also have great systems - Which is an interesting feature of your exhibitors - They are all embracing new age systems to revolutionise processes.
17:19 PM, 25th April 2012, About 11 years ago
Thanks for commenting Glenn.
On the topic of Imfuna, I spoke to a lettings agent who said she has recently spent 8 hours, yes EIGHT hours, doing an analogue inventory. That was eight hours when she wasn't doing viewings, answering the phones etc. A digital app such as Imfuna can speed up the inventory process very significantly, literally saving times and money.
We have a recent discussion on Property Tribes about "going digital in business" and I do believe that this differentiates you from your competition and also future proofs a business, as customers of the future will expect digital delivery.
Mark Alexander - Founder of Property118
17:22 PM, 25th April 2012, About 11 years ago
Good to read that you too are having good experiences with Let Alliance. My brother and I are equally impressed.
16:29 PM, 25th April 2012, About 11 years ago
Thanks for commenting Glenn.
On the topic of Imfuna, I spoke to a lettings agent who said she recently spent 8 hours, yes EIGHT hours, doing an analogue inventory. That was eight hours when she wasn't doing viewings, answering the phones etc. A digital app such as Imfuna can speed up the inventory process very significantly, literally saving time and money.
We have a recent discussion on Property Tribes about "going digital in business" and I do believe that this differentiates you from your competition and also future-proofs a business, as customers of the future will expect digital delivery.Digital is definitely the future, and those who adopt it now will be the success stories of the future too! :)Here is the link to the Property Tribes discussion:http://propertytribes.ning.com/forum/topics/are-you-going-digital-in-your-property-business
3:47 AM, 8th February 2013, About 10 years ago
Hi Vanessa, do you invest in Guildford? I live in the surronding areas and am looking into guildford. Some advice would be great. I have followed you on twitter. if you could follow back so that I can personal message you that would be great. @knights_j