When it comes to tenant selection, there's an old adage that all landlords should remember: choose the right tenant rather than the first.
Landlords are sometimes so eager to receive rent payments that they treat the reference verification procedure like a checklist rather than an investigation.
However, hurrying to approve the first individual who offers to buy your house can backfire.
So what does a reference check entail?
It's a lengthy procedure (for a complete list, contact us, but major considerations include:
Checks for identification (to make sure the potential tenant is who they say they are)
References from past landlords and current employers
Unpaid debts and county court judgements are apparent warning signs, but it's vital to go further. You should look over a candidate's entire credit report to gain a complete picture of their financial obligations and history.
What kind of expenses do they have in terms of credit cards, loans, and bills? Although the candidate may technically be able to afford the rent, given their other loan instalments, it would be a major strain.
Examine their history of paying bills as well. Late payments indicate that they are unorganised with their finances, which is terrible news if you want your rent paid on schedule.
Up to a degree, references from a candidate's prior landlords are relevant. We've heard of landlords writing glowing references for difficult tenants merely to get rid of them (not ethical, but it happens).
If you have any questions about a candidate's fitness, don't allow a glowing landlord recommendation be the decisive factor in whether or not to rent to them.
References from previous employers
It's critical to confirm a candidate's income with their workplace, but don't take a company email at face value (people occasionally have a "buddy" in HR to exaggerate their earnings).
Request pay stubs and bank statements, as well as calling the employer to confirm the accuracy of the email's contents.
Last bit of advice
Taking a chance on a questionable tenant may be costly, so put time and effort into the tenant referencing procedure.
If you want a professional to handle it for you, choose a good letting agent such as ourselves. The referencing company we use do the same amount of checks as above but do more in-depth checks on the tenants and have won a few awards for the quality of the referencing.