finding a suitable tenant for your property

Finding & Keeping a Suitable Tenant for your Investment Property

If there were ever three pieces of ‘golden’ advice that landlords need to hear above all other advice about finding & keeping the right tenants, this is what we would say:

  1. Always take a patient approach to properly review letting applications before you offer to rent your properties to any prospective tenants!
  2. The best way to deal with any bad tenant is to make sure they never move in!
  3. And finally, always bear in mind this one focusing question; Why would this tenant want to move out?

THE BASICS: WHAT YOU NEED TO KNOW

We’ve all heard horror stories. Cement in the drains, midnight police raids, the rowdy neighbour always complaining and lengthy eviction processes that can cost you time and money.

Firstly, I want to say on record that these are extreme cases that make the headlines and in 99 cases out of 100, your tenancy will run smoothly. That said, the one in 100 does happen, occasionally. This, however, often only happens to the landlord who does not carry out their due diligence, drops their guard, rushes the process, effectively burying their head in the sand and lets their property to the first prospective tenant that views the property because of their lack of patience or pre-programmed fears of ‘what if it no one wants to rent it’ prevail.

As mentioned above, the very best way to avoid these problematic tenants is to not allow them to move in, in the first instance. With this in mind there are a few preventative measures that can be ingrained into your tenant search to mitigate this.

Agreed, it may not be possible to avoid every problematic tenant out there, but we can lessen the severity of such cases to a tenant who perhaps doesn’t clean the property before they move or leaves a bunch of unwanted belongings rather than one that redecorates with a sledgehammer (which DOESN’T happen to good landlords who are patient and have a thorough tenant find process).  

With a careful and thorough evaluation of a prospective tenant’s background and renting history, paired with a little common sense and a basic understanding of human behaviour, you can create a screening process that will help massively with minimising risk and help to avoid most foreseeable or preventable tenancy disasters.

Over the years, we’ve come to realise that unrealistic complicated processes become unwieldy at best and, at worst, nigh on impossible to implement; they’re just too much work and effort for all concerned.

So, when you’re trying to secure a good tenant, you have to remember the tenant is probably looking at multiple properties. If you take too long with your processes and it’s too complicated, there’s a chance that the best tenants will be snapped up by landlords with more streamlined processes. That said, we need to be thorough in our approach, of course. The answer here is balance.

Fortunately, what we advise here in this guide are efficient, streamlined and undoubtedly thorough & effective guidelines to help you create your own processes for finding suitable tenants.

THE FUNDAMENTAL CHECKS

Tenant screening doesn’t have to be a daunting prospect.

The key is clearly defining the screening requirements early on and, more importantly, understanding the end goal of efficiency and successful tenant selection.

What are the absolute ‘must-haves’ from your prospective tenants, and what are the ‘nice-to-haves’?

For us to determine this, we must first profile the property. And by this, we mean identify who your ideal tenant is, often referred to as KYCs or Know Your Customers. Essentially this should have been determined well before the purchase of the property. However, nothing is ever too late. If this was not done previously, do it now!! We will get deeper into this profiling later in the guide.

The first qualifier for us with a tenant is their ability and willingness to pay rent. As obvious as it sounds, you’ll be surprised what prospective tenants think they can get away with.

With this in mind, there are three things you need to establish to begin with:

1. Their Monthly Income; we like to know that tenants won’t struggle to pay their rent. They should earn no less than 2x the monthly rent but ideally more like 3x. Any less than that, and it wouldn’t take too much to slip into financial difficulties. A relatively small emergency bill, for example, could leave them unable to pay their rent. It doesn’t necessarily matter where their income comes from (within reason, of course) – provided they can prove it.

2. Income Is Steady; We require a guarantor: always if available and definitely if the tenant doesn’t have an easily provable steady income. For example, they are receiving support from the bank of Mam and Dad, receive benefit payments or have some other type of support in this manner. In this case, getting a guarantor’s name on the tenancy agreement will ensure that rent gets paid, even if the tenant falls on hard times.

3. They are sensible – Mature, and fiscally responsible; This is harder to determine as you are most likely meeting them for the first time. But often, you can get a sense of someone from that first meeting and how they have interacted and followed instructions from you prior to that point. We will go into a bit more detail later on in this guide as to the research you can do to determine their likely fiscal responsibility.

SO, WHAT MAKES A GOOD TENANT?

Before getting into detail about the process, it’s important to understand what or who is a good tenant. I suppose we all have definitions of a ‘good tenant’, but we classify a good tenant as a ‘suitable’ tenant. They are, for us, one and the same thing.

The word GOOD is too subjective to classify in this instance. We look at a suitable tenant in the same way that we look at a good tenant. A good/suitable tenant is simply one that pays their rent on time and looks after the property.

We would like to take this further and hope that the tenant is communicative and willing to do smaller repairs on their own accord. That they keep the property immaculate and even improve its condition by means of decorating as well as respecting their neighbours etc.

For the purpose of this guide, however, a suitable vs. good vs. dream tenant is somewhat irrelevant. In essence, all we can really ask of a tenant, and of a tenant we want to keep, is that they pay their rent on time and that they look after the property. Anything else here is a bonus!

WHAT TO LOOK FOR IN A TENANT APPLICATION

There are certain things to look out for when selecting your tenant for your property that can help guarantee your investment and ensure you have a harmonious relationship with the person or people who call your house their home.

There is a multitude of criteria and background checks we could search regarding tenants but remember the process needs to be efficient and effective. Therefore, it’s crucial to focus on the most important criteria.

The criteria we would determine, at a minimum, are as follows;
(In no particular order)

  • Guarantor: Can they get one?
  • Reference: Can they get one?
  • Rent/bond payments: Are they able to pay at least the bond in full (at once, not on payday)?
  • CCJ’s & Credit Score: Do they have any County Court Judgments, and is their credit score respectable?
  • Length of tenancy required: We’re looking for indications for long-term tenancies
  • Length of previous tenancy: Great indicator of future behaviour. We don’t want a migratory tenant.
  • Sole/Joint tenancy: You’ll want to carry out the same due diligence for both/all applicants.
  • Age: Is this their first gig, or do they have experience?
  • Employed: If so, for how long, where, and how secure is their job?
  • Children: Four kids in a 2-bed… really?
  • Pets: How many, and what?

    Stable job/Employment

    While it is not necessarily a prerequisite for a good tenancy, a stable career is an extremely positive sign for a potential tenant. Of course, many freelancers, contractors and self-employed people will make excellent tenants too. However, the relative insecurity of those job types means you may wish to conduct some additional checks before renting to anyone outside of regular employment. We have already discussed guarantors briefly.

    If your prospective tenant can demonstrate that they have a stable, long-term job with a good employer, then it is highly likely that they will be in a position to pay their rent in full and on time each month without difficulty. What’s more, employers can also act as good character references for tenants.

    To reiterate and for complete clarity, you are encouraged not to dismiss applications from tenants outside of full-time regular employment but instead to be aware that you may need to ask for additional guarantees and conduct extra checks, which are outlined below.

    Affordability

    Regardless of whether your new tenant has a long-term job or is self-employed, you should make sure that their income will comfortably cover the rent.

    As a general rule of thumb, tenants are considered to pass affordability checks if their pre-tax income is at least two and a half times the rent.

    Keep in mind that the two-and-a-half-times threshold is simply a rule of thumb, so you can still choose to rent to tenants who don’t pass affordability checks. But you might want to confirm that they have other ways to cover the rent, such as significant savings or support from family members or guarantors.

    Long-term renter

    The standard tenancy agreement in the UK is known as an Assured Shorthold Tenancy (AST) and usually (though not always) comprises an initial fixed contracted term of the tenancy, usually 12 months, before converting to a periodic tenancy which can be ended by either party with an agreed period of notice.

    Some tenants will seek to have a break clause in their contract before the initial fixed term ends (for example, at the six-month point). While there is not necessarily anything wrong with this, it can be an indicator that your prospective tenant does not intend to stay in the property for the long term. This would lead to higher turnover and greater costs for you to bear as a landlord.

    In exchange for a slightly reduced rate of rent, you may be able to negotiate with a tenant that they will enter into a longer fixed-term agreement, guaranteeing they will remain in the property for at least two years or more.

    This is often the case with families who may be happy to enter into longer-term agreements so that they have a stable family home as their children grow up. Ideally, however, you would seek tenants who sought longer-term tenancies from you rather than any negotiation or persuasion.

    Check your tenant

    Once you have found a potential tenant or a shortlist of possible tenants, then the next stage in ensuring you have the best renter for your property is a series of checks that allow you to vet your potential tenants.

    Credit checks

    As a landlord, you can (and in order to be responsible, really should) conduct a credit reference check on your prospective tenants before entering into a tenancy agreement. This can give you peace of mind, knowing that you have found a tenant who will reliably be able to pay their rent each month.

    A tenancy credit check will help you find out whether the tenant has:

  • Given you their genuine bank details
  • Any County Court Judgements or fraud convictions
  • A history of missing payments deadlines and bills
  • Provided an accurate history of their previous addresses
  • With the three main credit reference agencies in the UK (TransUnion, Equifax and Experian) a tenancy credit check should cost you around £20 per person, though a more thorough background check will cost more. It is also possible to ask tenants to check their own credit scores and report using ClearScore and send you the results of that. At the time of writing, this service is free for the end user.
  • References

    To give yourself the best chance of securing a tenant that is trustworthy, responsible and will keep your property in good condition, you should ask for a reference from one or more previous landlords. Sensible questions to ask a previous landlord as a reference include:

  • How long was their tenancy?
  • Did they always pay their rent on time?
  • Were there any arrears at the end of the tenancy?
  • Did they take good care of the property?
  • Did they receive their full deposit back when they left your property?
  • Would you consider renting to them again in the future?
  • You may also seek a reference from your prospective tenant’s employer, seeking information such as:
  • What is their salary?
  • Are they employed full-time or part-time and temporarily or permanently?
  • How long have they worked for the company?
  • With these reference checks, some landlords will not offer references simply due to time factors and potentially a bad experience with tenants. It is always better to get these answers via email rather than over the phone. You must consider references alone should not dictate your decision to let to a potential candidate. They are to be used to ‘Support’ your decision after cross-referencing with all the other data you are collecting.

    Right to rent checks

    Once you are satisfied with your choice of tenant, before you can officially sign a tenancy agreement with them, you legally have to conduct a ‘Right to Rent’ check if your property is in England (Tenancies in Scotland, Wales and Northern Ireland are not subject to Right to Rent checks, hence a potential tenant does not need to prove their right to rent in these locations).

    The ‘Right to Rent’ checks are intended as a measure to help crack down on illegal immigration. Landlords have been obliged since 2014 to check that their tenants have the right to live in the country. Those with a right to rent in England include all UK citizens and holders of:

  • A Biometric Residence Permit (BRP)
  • A valid visa
  • Documentation showing ‘proof of settlement status granted’
  • Legally, it is your responsibility as the landlord to conduct these checks, including checking all the relevant documentation.


    PROTECT YOURSELF AND YOUR PROPERTY

    Taking a deposit

    Once you have found the tenant that you wish to trust with your property, it is usual to request a deposit before they move in. This will usually be an amount equivalent to one month’s rent, but it can vary at the landlord’s discretion up to a maximum equivalent of 5 weeks’ rent.

    A good tenant will be well aware of both the reason for needing to take a deposit, as well as the legal protections they enjoy when their money is taken. The deposit does not sit with you, the landlord, but with a third-party deposit protection scheme until the end of the tenancy.

    Rent guarantor

    A way to guarantee peace of mind regarding your rental income is to ask your prospective tenant to provide a rent guarantor. This can work especially in a situation where you have found a tenant you like and think is responsible but has a less-than-perfect credit history.

    The rental guarantor will co-sign the tenancy document and agree to pay the rent if the tenant is unable to. Guarantors will usually be parents or guardians of tenants, though they can be anyone over the age of 18.

    Crucially, you should always conduct a credit reference check on a guarantor as well as the prospective tenant.

    THE IMPORTANCE OF KEEPING A SUITABLE TENANT?

    In short, and by no means of beating around the bush, the tenant is your profit. They are the cogs of the industry; without tenants, we have no business, no profit and a whole heap of liability.

    This means that keeping (almost) any tenant has its benefits providing you are receiving your rent but keeping a suitable/good tenant is increasingly important.

    For one, anytime a tenant moves out of your property, you are left with some form of expenditure, whether that is merely the council tax liability and subsequent mortgage payments or it is the cleaning, disposal of goods, repairs, and redecoration; it is all expenditure compounded with lost profit.

    Generally, the longer the tenant is at your property, the more this will cost you when they move in terms of redecoration and repairs. The smaller repairs that they felt they could live with won’t be tolerated when the new tenant moves in, so these will need to be dealt with as well.

    Secondly, we have the added factor of hassle. When a tenant moves out, we not only have to check them out of the property, but we also need to inspect against our inventory, deal with any repairs or maintenance that the tenant has either caused or unreported, we need to deal with the deposit, whether that is claiming against it or simply returning it. If we are claiming against it, we may need to request a statutory declaration if the tenant does not reply to the claim, or we may need to use the dispute resolution service if they contest it; all this is a laborious and time-consuming task sometimes involving signature witnessing by a solicitor.

    If only it was that simple! We also need to transfer the liability of the utilities into our name, and there may be debt on the gas and electric meter, meaning that we either have to clear the debt or call the electric company and go through a drawn-out process to have the electric meter reset by means of going to collect a new key from the local shop, using a ‘reset’ code then returning to the property to clear the debt, only then can we return to the shop to add some credit to the key and get our supply back on.

    If only the gas was that simple. In most cases, the energy company will want to send an engineer out to the property to reset the meter, great huh? No, this means we have to wait a few days; we also have to return to the property and hang around for the engineer to attend his 4-hour window. In the cold, I might add!

    We have to transfer the water into our name, notify the council that we are now liable for the council tax, and make the decision to hold off payment until we either find our next tenant or we receive our arrears invoice. If we make the payment immediately, in some cases, we will then receive the overpayment back in the form of a cheque after finding the new tenant, meaning we now have to go to our bank to pay this in.

    OH! Lastly, we have the task of retaking pictures and starting the entire process of listing, advertising, speaking with prospective tenants, viewings, applications, tenant referencing and signing up that suitable tenant all over again! Furthermore, we can never be sure that they will be as good as the tenant we have just let slip through our fingers.

    Ok, so maybe we’re being dramatic here since it rarely would play out like that, but they are all possible scenarios. There will be instances when only one or two of the above needs attention, but there will be instances where more will be involved. Either way, it’s an inconvenience, and we should want to avoid it. ‘Better the Devil you know’, right? 

    We’re not suggesting that we view tenants as an adversary, of course.

    There is no dark art or hidden secret to keeping hold of that ‘suitable’ tenant

    Just ask yourself this one question – ‘why would this tenant want to move?’

    You will generally find the answer yourself or will find the answer because;

  • You’re raising rent continually and excessively
  • You are shirking your maintenance responsibilities
  • You are visiting the property too often
  • You will not reinvest in the property during a tenancy
  • You are not allowing them basic privileges upon request

    PROCESS FOR A SUITABLE TENANT SEARCH

    SPECIFIC PROCESSES

    The specific process you will use to find your tenants will be determined by your requirements as a landlord and the types of properties and areas in which you invest. But to give a general guideline into what such a process may look like, we have detailed below a simple and efficient system which can be modelled and edited to make your own.

    The general process follows these 5 steps:

    1.) Property profile & advertising for the tenant search

    2.) Generating & dealing with enquiries

    3.) Carrying out and managing viewings

    4.) Processing full tenant applications

    5.) Tenancy setup and management of new tenants



    STEP 1.) PROFILE & ADVERTISING FOR THE TENANT SEARCH

    Profiling the Property

    The idea here is to determine what the ideal tenant for this particular property is. Not all properties are created equally, and not all tenants suit every property. For instance, a smaller two-bed property with a single second bedroom would not suit a growing family. In this instance, your ideal tenant may be a single person and or a childless working professional couple; someone may be looking to use the second smaller bedroom for a home office. As an example, we purchased a property with a disability ramp down the side of the house and a downstairs shower room with another attached room that could be converted to a ground-floor bedroom. Our search centred around this, knowing that any tenant that required these features would no doubt be a long-term tenancy due to other properties not having the same convenience for our prospective tenant.

    It is essential that you profile the property and decide (as early as possible) who your ’ideal’ tenant is. In our case above, this was one of the deciding factors in purchasing the property, knowing the advantage to longevity for any well-chosen tenant. The irony here is that this is what put other investors off. We purchased the property knowing we would profile it, and the tenant has now been with us for many years with no intention of leaving. As previously mentioned, our tenant/property profiling usually starts at the point of our Rightmove search and/or at the viewing stage.

    Advertising / Finding the Tenants… Where?

    Online Portals:

    There are multiple places you can look for prospective tenants, and one place isn’t necessarily better than the rest, depending on your requirements and situation. It’s what you do once you’ve found some potential tenants that make all the difference.

    The most common place to begin is with the huge property portals such as Right Move and Zoopla these are by far the best source in their respective categories and the most cost-effective and efficient way of finding tenants, even tenants for commercial properties if that’s what you’re after. For HMO properties, portals such as SpareRoom are a good starting point.

    High-street letting agents generate the vast majority of their enquiries through websites like Rightmove and Zoopla. Long gone are the days when they relied on local newspaper adverts and walk-in trade. The only problem is private landlords can’t directly upload their vacant properties onto Rightmove and Zoopla (they only deal with agents who pay handsome fees for the privilege). However, that’s where OpenRent (If you contact us we can supply you a free code to get a free listing on open rent) swoops in to help… and with very little cost.

    Signing up with an online agent (Such as OpenRent), fill out a form which consists of your property details (including pictures), and for a small fee (£29-£50 on average), they will market your property across all the biggest property portals like Rightmove. Then, you simply watch the enquiries roll in and arrange and host the viewings accordingly.

    When choosing your “find a tenant” package, it’s important to ensure your property is getting marketed across Rightmove and Zoopla. Though we are not limited to only Rightmove and Zoopla the number of eyeballs they attract between them is significant- it’s literally in the tens of millions. There aren’t many other means of tapping into as many prospective tenants.

    Gumtree (& any other classifieds):

    Most of you will know of Gumtree.com; it’s probably one of the biggest classified websites in the UK. It gets millions of visitors every day!

    Many online letting agents will market your property on Gumtree as part of their service. The good thing about Gumtree is that it allows private landlords to directly use their platform (much like eBay) for little to no cost when starting out (subject to gumtrees terms), and you don’t need to go through an online agent.

    Being that using this platform is free to get started with (you get a small number of FREE listings each year) it’s most definitely worth a shot and the results we’ve seen in the past have been positive in terms of finding tenants quickly. It should be noted that platforms like Rightmove and Zoopla are the ‘optimal’ method of finding suitable tenants, however, we understand the budgetary restraint some landlords may enforce so Gumtree does present a free option without the use of an online agent.

    One more point to throw into the mix, or should we say ‘Fair warning’ is that Gumtree can generate leads from scammers or tenants on benefits (we’re not saying the latter is necessarily a bad thing as we previously alluded to providing the right controls are in place), it’s just a case that it’s ALWAYS imperative to conduct thorough referencing, and especially important when processing Gumtree applicants (or any other classified websites).

    Facebook (& other social media platforms);

    Facebook marketplace is the primary platform we’re talking about here. Over the last few years, it’s grown in popularity, and everybody and their cat have jumped on board. The marketplace is very similar to the likes of gumtree, where users can advertise items for sale. This is not limited to physical products but services and things like letting tenancies and accommodation, hotel stays and the like.

    While this platform can generate legitimate enquiries and shouldn’t be written off again, it’s worth noting that the quality of leads can often be lower than traditional means, so once again, the importance of rigorously screening your prospects is essential to avoid poor quality tenants and potential scams.

    Also similar to Gumtree is the fact that while Facebook can generate plenty of legitimate and valid enquiries, the quality of leads can often be lower than the traditional methods, so it’s important to ensure you rigorously vet all prospective applicants, and be wary of scams that may arise.

    In general, we would strongly advise against using Facebook Marketplace exclusively to generate leads. Instead, place your BTL onto Rightmove and Zoopla via an online letting agent, and then if you want or need extra exposure (often Rightmove & Zoopla provides enough firepower, but not always), use the likes of Gumtree and Facebook Marketplace as complementary tools.

    It’s not the most effective method by a long shot, but it’s amazing how effective sending out a tweet or updating your Facebook status at the right time can be. Social media platforms as much as we hate to say it, social media actually works (at times). Even if it doesn’t work, what’s the worst that can happen? It’s always worth a try.

    Most people these days are involved with a social media platform, whether it be Facebook or Twitter for example. The great thing with these social networking sites, Facebook in particular, is that they provide a quick and easy way of connecting with all your local friends and family.

    Something like setting a Facebook status to:

    “2-bedroom property for rent in 123street, 456town. £675pcm. Anyone interested, or know anyone interested?”

    The thing with this approach is, you NEVER know who is looking for a property to rent, or who knows someone who is looking. Spreading the word among your local peers and networking via Facebook is always worthwhile because it’s so quick and easy to do. Facebook do run some initiatives if paid advertising is on your radar, it may be worth a look into. You can find details here; https://en-gb.facebook.com/business/industries/real-estate

    Again, this only supports your primary means of finding a tenant and is not THE primary means.

    To-Let Boards:

    Okay, so here, yes, we have another method but as always there are limitations present. Letting and estate agents are required, under Planning and Highways legislation to place boards only within the boundary of the property and also to remove them within 14 days of a property being sold or let. That’s fine, but what’s the problem here? You’re limited to who can see them.

    Unless the prospective tenant is local there’s no way they are going to see the sign showing it is available for let. A minor issue, but still an issue nonetheless. Your reach just won’t be sufficient. However, the reason they’ve been used for so long is that they do work, so regardless of whether tenants are coming from online or not it would be very easy for a prospective tenant to see a board (if already living local or passing by), then go online and make the enquiry. If you ditch the use of boards altogether, then the agent/ landlord who has both boards, and the same online presence as you (which let’s face it, 90% of the time is a Rightmove account and a poor website) is very likely to outperform you. The choice is yours, but we ALWAYS erect a board. Just ensure yours is professionally ordered from a local sign maker.

    WHAT TO INCLUDE IN ADS AND MARKETING MATERIAL

    As we’ve already alluded to, it’s easier than ever to advertise a rental property to thousands of prospective tenants. However, to get the maximum impact, landlords need to make a property stand out.

    This means that more than ever, to let a rental property efficiently, it’s all about having a good quality set of images showing off the buy-to-let or HMO room in its best light; although not to be deceptive, the property must be depicted in its current state. 

    We know most tenants will now look to one of the big property portals like Rightmove or Zoopla as a starting point for finding a place to live. Increasingly, tenants will view the rental advert on their phones.  This makes the importance of the image critical. 

    When tenants scroll down a list of buy-to-let property details, they are looking for something that jumps out at them and ticks their boxes. This is not always easy when it comes to the ubiquitous nature of the typical rental property.  One neutral interior will tend to look exactly the same as all the others.

    So, what do you need to include in your advertising? Let’s take a look…

    1.) Images;

    The secret to a striking online rental advert is a good set of sharp images. Too often, a photo taken quickly on a phone with a poor camera looks like it has been taken underwater. No good! It has to be sharp and bright (consider using the flash!) Turn on all the lights, including the sidelights, even during the day and ensure the use of bright white light, not that old-style dim yellowy tungsten type light that will help prevent the property from looking as if it is in a cave or dungeon. Led bulbs are relatively inexpensive so ensure you have these installed. Make sure that a decent camera is used, whether it’s on the phone or not. Not all phones have a zoom feature, and that will limit a landlord’s scope when it comes to good-quality images of a rental property, so you may want to check this first.

    The convention is to have an outside shot as the main image. This is not wrong…. but use some discretion. If the property is not much of a looker and has zero kerb appeal, then an inside shot of a high-spec kitchen or sumptuous bathroom might be more sensible. 

    Here is the difficult thing for many hard-pressed landlords, the reality is that a staged or properly furnished and/or decorated interior will always look better than an empty, poorly decorated buy-to-let shell or room. Not always easy to achieve if a landlord is letting their property unfurnished or part furnished, but at a minimum, an empty room can be bright, clean and finished well. When looking at the shot, think about staging the photo with some brought-in furniture. This doesn’t have to be couches or a TV. Things like rugs, candles, pictures or even a vase of flowers will all add depth and colour to a room. Kitchens should have toasters, kettles, tea towels etc, all brought for the images and maybe even the viewings too. Tenants now will spend a fraction of a second zipping through the ads, so make sure the images of the rental property have a wow factor to secure a viewing.

    2.) The Ad Itself;

    The main point to consider here is the aim of any marketing exercise by landlords is to deliver the right message to your customers. Your potential tenants. 

    Inevitably a big part of this message will need to be factual such as: how many beds, does the rental accommodation have, does it have a garden, central heating, off-street parking, etc?

    The next step for a landlord is to think about how they might embellish these details and attract tenants by differentiating the investment property from the competition. This is not easy; especially when a landlord is trying to do it in as few words as possible. Landlords need to remember the old adage ‘a picture is worth a thousand words’ therefore, where landlords have the option of a photograph, they should try to use it to represent their investment property’s best features.

    Other information to include may be factors such as;

  • Price & conditions
  • Description of the property/ letting
  • Who you accept & don’t accept/ Target audience (who is your ideal type of tenant)
  • Location
  • Incentives & tenancy term

    Let’s discuss these points further below;

    Price & conditions

    Don’t forget the all-important numbers such as the rent (what does it include or is it exclusive of all bills?) Landlords need to also talk about the deposit. Some tenants will baulk at paying more than a month as a deposit, but there may be a reason for the increase of this (such as if the tenant has pets, for example). However, if that’s the case, a landlord should consider letting them be somebody else’s tenant, maybe. 

    A letting shouldn’t be entered into with less than 1 month’s rent and a deposit. Otherwise, a landlord will be exposing themselves to an unnecessary and unacceptable level of risk of losing money. The property needs an EPC to be marketed by law. Not that many tenants express any interest in their contents. Often letting websites will include an availability date for the rental property.

    Description of the property

    After the images, the property description is probably the biggest asset to a landlord. Landlords should start with the state of repair (if applicable) of your investment property. The expression ‘newly refurbished’ will give a good indicator that the investment property will be clean and tidy. A landlord could suggest a more comprehensive programme of works by mentioning the new bathroom and ‘Ikea’ kitchen. Tenants like the word ‘new’; it reassures them. Often, we hear tales from tenants who have been relieved to find our property after parading around a whole range of dirty, shabby properties.

    Therefore, even if you have just had a few walls repainted, then a description of ‘newly redecorated’ will reassure many tenants that your property isn’t a dive. Increasingly, landlords are buying new investment properties to rent out. This, of course, is attractive to many tenants, and this fact should be drawn to a tenant’s attention. If a landlord’s investment property isn’t new, then other stock phrases that give an indication of a reasonable condition are ‘clean’ & ‘well presented’.

    How many words should a landlord use? Try to get your message across in as few words as possible, unless the investment property is an upmarket or specialist let when it is probably worth a landlord spending a little more ‘announcing’ its existence. Make sure that the rental advert draws attention to the properties’ positives. If the property has an outside area such as a garden, garage, patio, balcony, additional storage areas or utilities, this is a real bonus for a lot of tenants.

    Does the property have a style that might help to sell it to a tenant? A modern property and contemporary style are always positive. Some tenants will be bowled over if the property has a wealth of traditional features such as sash windows and cast-iron fireplaces or something completely modern and up-to-date. 

    It is also important to tell them details such as whether or not the property is furnished or part furnished. This can be slightly confusing to some tenants. Part furnished means not furnished (apart from white goods such as cooker, dishwasher & fridge freezer for example). Unfurnished does mean without anything apart from the very basics like carpets and perhaps curtains. Furnished does mean that the property has the basic level of furniture and appliances such as sofas, a bed and for students, obviously a desk is a welcome addition, even if they do all their studying lying on the bed with the laptop.

    Who you accept and don’t accept (Target audience/KYC)

    This is really a case of setting expectations and filtering out unwanted prospects from the start. It is not a case of stating in no uncertain terms of who you don’t want here but merely providing notice of terms where a prospect may not fit your letting criteria. This can be as simple as a polite notice like; PLEASE NOTE: If you have any outstanding CCJ’s or poor credit history, then you would not fit our criteria to be considered for a viewing. This allows the tenant to know from the start whether or not they should apply, saving them and crucially, you time in the application process. Each landlord may have different criteria here so you must consider this from your perspective as the landlord and the type of property you are letting and to whom. Alongside this, it is good practice to suggest attributes of the ideal tenant you are looking for that can be contained within the advert itself or listed with some general terms such as ‘Working professionals’, ‘References required’ would suit a ‘small family’ etc

    Location of property

    It’s essential to tell a prospective tenant where the rental property is. Be sure to include the postcode for all those tenants that can’t navigate and rely on their Sat Nav or phone.  Remember, often new tenants will not know the area if they are from out of town. A lot of the marketing websites will allow a landlord to post an online map with the ad to help tenants to find the property and will use the postcode to locate the property so make sure it’s right. Some tenants may be without a car. If they have a vehicle, however, then it would be useful to mention whether there is parking available at the property. Tell the tenants if the property is near shops, local amenities, and schools. Being close to a train station or bus stop is a big bonus for some, so be sure to include these details in the rental advert where applicable.

    Incentives and tenancy term

    If, as the landlord, you are looking for certain terms to be met, then you clearly need to state these. For example, if you would want a longer-term tenancy say 12 months minimum, it is wise to state this in the advertisement, again setting expectations for the applicants. However, you must be careful not to list too many requirements preventing no one from applying and the fact they haven’t even yet seen the property, so this should be considered as a light method of filtering applicants but not necessarily preventing them from applying outright.

    STEP 2.) ENQUIRIES

    PRE-VIEWING APPLICATION PROCESSING

    Generating enquiries is only the first step of filling your vacant property, but it’s definitely NOT the most important step.

    Finding a “good tenant” is key because bad ones can chew through your time and profits.

    It doesn’t matter how or where you have sourced a tenant, in (un)experienced hands, landlords are ALWAYS prone to fall victim to rogue tenants. Remember, if you’re using an agent, and they get this part wrong, it will cost YOU, not the agent.

    The best we can do is minimise the risks, and the best way to accomplish that is by thorough tenant referencing, and that truly begins at the pre-viewing stage.

    One of the most annoying aspects of finding a new tenant is the massive time-wasting that comes along with it, especially if you’re not vigilant from the get-go.

    If you asked us to tally up how much time is consumed on average by all the tire-kickers, unsuitable applicants and total blaggers that apply for each tenancy, it wouldn’t be entirely surprising if we’re left with very little faith in humanity.

    It can be tedious beyond belief, especially if you get inundated with applicants (which is becoming more and more common as rental demand outstrips supply).

    One of the most common mistakes landlords make when processing tenancy applications is granting and scheduling every applicant with a viewing slot. There’s no need to do that. Of course, if you want to needlessly waste time, then go for it. But remember, your time is precious. We invest in property to get our time back not to have it taken up by tenants.  Minimising time-wastage by separating the wheat from the chaff is crucial. Not only for the sake of your sanity but also because you’re more likely to end up with better-quality tenants.

    You should only be scheduling viewings with suitable applicants. Typically, that means someone that suits the profiling of your property, someone that can get a guarantor, someone that can provide references, and someone that fits the lifestyle of your property.

    One method you typically employ to sort the good from the bad right at the start is to employ a viewing application independent of the main tenancy application:

    Email each applicant the same tenancy application form, and get them to complete it. Trust us, construct a screening process before you take viewings, and you’ll be surprised and overjoyed at the same time by how many unsuitable tenants you almost met. In the past, some applicants have actually been disgruntled by the screening process, and it’s sent them running for the hills. That only means the pre-viewing screening process is working because any reasonable person will understand and happily assist with answering the questions. What we are doing with this pre-viewing application is also pre-filtering.

    An example (but not exhaustive) list of questions on a typical screening form at this stage could be: (Remember here there is an element of efficiency with your process required so choose your questions carefully – but don’t skimp on what you need to gain a good picture of the potential tenant);

  • Name (First & Last)
  • Contact details: Email, Phone (Home/ Work & Mobile)
  • D.O.B
  • Property address that you would like to view?
  • Would a sole or joint tenancy be required? (Collect details for both tenants)
  • Your full current address
  • Who is your current landlord or agent?
  • Would your current landlord or agent give you a reference?
  • Reasons for moving from your current address?
  • How many children would be living at the property?
  • When would you be looking for your tenancy to start?
  • How long would you like your tenancy to run?
  • Would there be a request for a CAT or a DOG or another pet?
  • Please list what type of pet/s /breed you have?
  • How is your rent paid?
  • Please state your total monthly income from either employment, benefit entitlement or a combination of both (note: if this will be a joint tenancy application, please include both incomes, separately)
  • Would you be able to get a guarantor if requested?
  • Can you pay the deposit in full
  • Any Credit Issues?
  • Any County Court Judgements (CCJ) issues?
  • Are you currently employed? If yes, what is your occupation and where are you employed?
  • Do you have any viewing restrictions over the next 5 working days i.e work, appointments or other?
  • Please add anything else you feel would help your chances of securing this property

    Once you have the information (in full), then it is wise to filter and shortlist your applicants at this stage. Depending on your requirements as the landlord and the property offered, then the parameters you will filter by to prioritise applicants to proceed to view will differ from one landlord to another, but as a general guide, we would recommend the following at a minimum (*note this is in no particular order);

  • Guarantor – Yes/No.
  • Reference – Yes/No.
  • CCJs & Credit – Yes/No.
  • Length of tenancy required – The longer, the better.
  • Length of previous tenancy – The longer, the better.
  • Age – Your discretion, but the younger, the less experience they have.
  • Employed – Your discretion. It will entirely depend on your property and its profiling.
  • Number of children – Consider the bedrooms in the property and the age of the children. A couple with a 1-year-old and a three-year-old may be ok sharing a 2-bed, but soon enough, their children will want their own rooms.
  • Pets – Your discretion.

    We have given an example using Microsoft forms to show how this form may look. If you wish to create a form of your own it is quick and easy to set up a Microsoft 365 account which will include Microsoft Forms as part of the package. 

    [Pre-Viewing Application Form Example]

    STEP 3.) VIEWINGS

    VIEWINGS

    Many landlords use the services of letting agents purely for the avoidance of not having to deal with viewings, and that’s cool. We totally get it; taking viewings can be time-consuming, especially if you do not follow our pre-filter process. However, in my opinion, time & location permitting, you’d be much better served to take your own viewings.

    Landlords are inherently always going to be better equipped at referencing tenants and finding tenants than an agent, and that’s because we will always naturally care more about our property than anyone else.

    So that means, during a viewing, we’re more likely to pick up on signs which make it clear whether or not the applicant is suitable, and these are signs an agent, through no fault of their own, isn’t always genetically wired to detect. If you are a new landlord, this will come with experience but in the early days lean on your screening and application process to cross-reference what you note when meeting the potential tenants at a viewing, you’ll be surprised what you can gain a good sense of at this stage.

    We’re talking about paying attention to things like mannerisms and hygiene (yes, really), how they have got to the property, their language and use of questions about the property etc, are all crucial qualities that we all want in a tenant, agreed?

    We all want a polite tenant that upholds certain standards of hygiene, right? These are aspects some agents completely ignore because they’re busy focusing on payslips and employment references. But the reality is, there is so much more to a ‘good/suitable tenant’ than simply what’s on their application form, and landlords are generally better at processing and detecting those other attributes that make for a good tenant. But more importantly, recognise when they’re missing.

    If you are convinced and you’re ready for the challenge of taking viewings (a wise decision, by the way), here are a few top tips:

    Don’t accept the first interested tenant just to keep the void period to a minimum: new landlords are often so eager to fill their vacancy ASAP that they end up accepting the first application for the wrong reasons.

    Yes, the first applicant might legitimately be the best applicant, but it’s a dangerous and high risk to accept the first interested applicant just to keep the void period to a minimum! It’s usually best to take the time to assess all applicants so you get an overall better picture.

    Don’t stop taking viewings: so many landlords make this reckless mistake, so we urge you to refrain from falling victim because it may end up costing you..   it is a good idea to continue looking for tenants up until the point you have completely secured a tenancy, which means someone has 1) paid their deposit 2) paid their first month’s rent 3) signed contracts 4) moved into the property (strictly speaking, point 4 should not even occur unless 1-3 have been completed).

    Until all the above is fulfilled, keep on taking viewings and processing applications. Tenants can delay move-in dates or even pull out of the deal altogether, and the majority of the time, there’s little landlords can do to recoup that lost time/money because nothing has been signed.

    Don’t take your tenants’ word or allow them to earn your trust at this early stage, regardless of how much interest and intention they show, don’t hold the property. Their words mean nothing until they can transfer funds

    Be flexible: Try to be flexible with your timing and availability but at first aim to create hierarchy – Try to get movement on viewings or at a time that suits you. You want as many people through the doors as possible. Tenants rarely wait around, so if you leave them waiting too long, you’re effectively telling them to go away. Since Covid rules were relaxed we are now back to block appointments – This means we pre-select a date 2-weeks after the property goes live and spend that one afternoon showing tenants.

    Know your property: You should know the details of your property, which include:
    1) how much the council tax is
    2) which utility suppliers are currently connected to each service
    3) the location of local amenities etc.
    The more you know, the better. Be prepared for the questions.

    Be honest: if you don’t know the answer to a question, be honest. Don’t go down the path of fabricating answers, because it will come back to haunt you. Furthermore, don’t make promises you can’t keep, always be direct and honest.

    Cover all the essential details: reconfirm with the tenant what you expect in terms of rent, the length of the tenancy and the conditions you have in place regarding smoking and pets.

    Ask questions: don’t be afraid to ask the tenant relevant questions, like why they’re vacating their current premises, how much they’re currently paying, what brings them to the area, where are they working etc. Be curious and don’t be shy. Communicate to tenant accordingly. All these questions will help give you a sense of the tenant’s character and intentions, which is extremely important.

    Be on time: Be respectful by being on time. Punctuality goes a long way and starts the process off on a positive note.

    Don’t be pushy: If you need to force a hard sale, then there’s something wrong with the property or your business. If you did your homework and prepared your property appropriately, it should sell itself. But the last thing you want is to let the tenant know that you really want them in. It changes the hierarchy. You should be in the driving seat, not the tenant

    Get confirmation: Ask them to confirm 1 hour before (Call) DON’T show if they don’t confirm. In 90% of cases you will be wasting your time. If they show and you don’t it will show them that you don’t mess about. If you ask for something, you expect it to be adhered to. They will, in most cases book back in and if they don’t, how bothered were they. We are after good communication from tenants, not ‘Oh I didn’t read the email’ or ‘I forgot’.

    Get there early: Get to the property early (15mins) and turn on the heating, lighting, freshening up, extraction – tidy mail etc. Again, present your property at its best.

    Go with your GUT: Do their answers match previous details, are they coy with their answers? if you have a bad feeling TRUST it. THERE CAN BE NO RUSHING THE TENANT SEARCH!

    STEP 4.) APPLICATIONS

    FULL APPLICATION PROCESSING – Steps to take

    After the tenant has ‘passed’ the initial stages of screening, so to speak and viewed the property, we then need to send them a full application. Remember, the good tenants will have no problem completing this, whereas you may be challenged by others because they’ve ‘already filled in their details’ this isn’t a tenant you want as it can show they are lazy or can’t follow simple instructions or that it’s just not important enough to them. The good news here is due to your pre-filter stage, this stage will be easier. You will already have a good idea that those who viewed meet your criteria, and now, coupled with meeting the prospective tenants, you will have more of an idea of who they are and whether or not you want to continue the process with certain individuals.

    The application requirements at this stage are full completion of the below checks;

  • Application to rent (Exemplar templates of this form can be obtained for free online by joining associations such as the NRLA or BLA and most local landlord associations will have these.
  • Carry out an affordability check. establishing the applicant’s income and checking the rent is c. <40% of income.  This is easily done by requesting 3 months’ bank statements.
  • Landlord’s reference but can also check if they do/did own their own house – use the land registry website which costs around £3 (unless the house was sold more than a few months ago)
  • Credit & CCJ check (online firms) It would be sensible to outsource this work. Check exactly what they will do for you before you start chasing any documentation, no point in doubling up the work
  • Employee referencing check
  • Confirm guarantor (offer tenancy contingent on this)
  • Guarantor form to be filled out at this stage and ID obtained from ALL parties
  • Once you have sifted through the applicants that meet ALL the criteria given above to a satisfactory standard for you (as the landlord) and the property requirements. You can then choose your tenant(s) on a provisional basis and notify them of the next stage of the application to confirm the tenancy.

    STEP 5.) TENANCY SETUP

    Setting up the tenancy:

  • Request a holding deposit* to hold the property (note this balance comes off the first month’s rent NOT THE PROTECTED DEPOSIT). (*The Tenant Fees Act 2019 commenced 1st June 2019 and applies to all assured shorthold tenancies, tenancies of student accommodation and licences to occupy housing in the private rented sector in England. The Act limits the amount a tenant can be charged for a holding deposit and security deposit and defines what a tenant can be charged in addition to rent. The current maximum limit for a holding deposit cannot be more than 1 week’s rent for the property.)
  • Request that the BOND/DEPOSIT be paid in full giving plenty of time to register and print the required documentation ready for check-in (we usually request 2 weeks)
  • Register the bond/deposit with either the DPS the TDS or MY DEPOSITS (we use the DPS)
  • Print the prescribed information off for the tenant as well as the deposit certificate etc. Details/exact requirements can be found on all three of the websites
  • Request the rent (minus the holding deposit) to be paid no later than 72 working hours before the tenancy start date – A top tip is to issue the tenants with a recognisable reference.
  • Collate the following documentation ready for the check-in (either print or email or both for reference);

  • Right to rent information
    (https://www.gov.uk/check-tenant-right-to-rent-documents)

  • How to rent guide
    (https://www.gov.uk/government/publications/how-to-rent)

  • EPC link or certificate
    (https://www.gov.uk/find-energy-certificate)

  • EICR Certificate – This is a legal requirement. Electrical Installation and Condition Report. Due every 5 years

  • CP12 Gas Safety Inspection Certificate. Due every year

  • Information on Legionella
    (https://www.hse.gov.uk/legionnaires/legionella-landlords-responsibilities.html)

  • AST – Print and complete (NRLA)

  • Damp and mould guide (not a legal requirement but recommended)

    Once the tenant is accepted and at the point of being ‘checked’ into the property, it is good practice to ensure the following is carried out and understood by the tenant;

  • Advise tenants on their responsibility to contact energy suppliers, water suppliers & council
  • Take meter readings (images too)
  • Show them the correct operation of the boiler & time clock and how to top-up the pressure if it is a combi boiler
  • Give them information as to the whereabouts of the stopcock, consumer unit and gas meter.
  • Provide them with an email address to liaise with you and the contact number for any emergencies
  • Advise them that you will be inspecting the property within 3 months & add this to your diary.
  • Carry out an inventory and condition report supported with a video.

     


    FINAL CONSIDERATIONS

    Returning to our earlier question, ‘why would this tenant want to move out we have the following:

    Sometimes matters are beyond your control, and despite your best efforts, a tenant may still move on.

    However, we need to do whatever is within our control to keep this ‘suitable’ tenant;

  • We need to be a GOOD landlord
  • When a tenant reports a problem, we need to act and act as soon as is reasonably practicable
  • We need to address the more significant issues like a broken boiler with our tenant in mind, especially longer-term tenants
  • We need to show the tenant respect and allow them to LIVE in THEIR home comfortably and allow them space without constant intrusion
  • When a tenant requests a change or seeks a pet, common sense needs to prevail
  • We need to avoid becoming complacent. The longer the tenant is at the property, the more value you should attach to them
  • This list really could go on, but we’re sure you get the picture by now.

    One final tip that you may wish to employ is to set up a profile (acting as an agent not the landlord) email for tenants that suggest you are an agent. This allows you to stay one step removed. This allows you to give the impression that you are an agent showing the property. NOT THE LANDLORD.

    Having balance and, of course, with revenue in mind, you need to do everything within your power to eliminate the controllable reasons why a tenant would want to leave your property but not let bad ones get in, in the first place.

    You can find a simplified checklist of steps of the entire search and screening process for new tenants here; [How to find suitable tenants checklist]

    We wish you the best in your tenant search. If you would like to learn more about this topic and property investing in general from beginner to advanced, we highly recommend joining one of our property mentorship programmes. Beginner or advanced, we can help you achieve your vision of success with property in a personalised and practical way.

    Be sure to
    download our mentorship prospectus for more.

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