On average, each UK tenancy has six applicants, and so it seems that people are falling over themselves to find somewhere to live. It’s very tempting, both for the letting agent and for the landlord, to just take on the first applicant to pass the credit and reference check, just to prevent a void and get as much return as possible.
This can be a bit short sighted, however, as a tenant is much more than their income and their willingness to do a bit of gardening. There are some other things to take into account before any dotted lines are up for signing.
The tenant’s income and stability
OK, this seems to contradict the earlier point, but it is a consideration – just one of several a landlord has to make.
Tenants in the UK spend an average of 38% of their income on rent, which is a big wedge. A reduction in hours or an unexpected major expense can have a serious effect on your tenant’s ability to make that rental payment.
As well as looking at applicants’ earnings and employment status, it’s a good idea to find out how much debt the prospective tenant has so you have an idea of how much wiggle room they have.
The tenant’s demographic profile
Of course, people will always try, but the age of the applicant is a good indictor of their attitude and priorities. Most renters in the UK are under the age of 44 and so they’re more likely to prioritise location and amenities and are likely to move as their life changes. If your applicants are over 44, they’ll most likely be looking for somewhere long term. A good fit of applicant and location makes for a longer and more stable tenancy.
The location
Location is important in terms of amenities and ease of commute, but it also dictates the level of monthly rent. Ideally, the location should offer the applicant the perfect balance of location and affordability, so spend some time asking about lifestyle as well as income. That extra bit of fact finding could be the difference between a long and happy tenancy and an early termination with all the hassle that entails.
The applicant’s credit score and history
If your tenant has a good credit score they’re less likely to default on the rent and, if they do run into problems, they’re more likely to be responsible about it.
Don’t think that being a tenant automatically means having a lower credit score than someone with a mortgage, as paying rent each month is as big a commitment as a home loan. In fact, many people pay more in rent than they would on a mortgage for a similar property.
References and background checks
Talking to previous landlords and employers can shed some extra light on an applicant. If referees say that the applicant has always been reliable and has never had problems then it’s a good sign. If a previous landlord says the applicant was made redundant and dealt with the situation very well, that’s also a good sign as it shows that the person is sensible and responsible.
Some tenants are stellar
Most applicants make good tenants, but a few applicants make amazing tenants. With so much competition among people looking for places to live, you’ll find a few who are prepared to go the extra mile to secure the tenancy. Look for applicants who:
– Offer to pay more than the going rate
– Ask for a longer rental period and can demonstrate their need for it, such as a three-year job contract
– Submit a CV with current and previous employers so you can contact more referees
– Send in a video of themselves to give the agent and landlord a good idea about their personality and lifestyle, and
– Proactively cultivate relationships and rapport with the letting agent
These extra checks can reap extra benefits
This extra diligence turns an ok fit into a great fit, which in turn means a longer, happier tenancy with fewer problems and less chance of that dreaded void.
