Renting a home is a business like no other. It requires a massive investment, and who you sell to (i.e. your tenants) can make or break your business. You are essentially entrusting a significant part of your finances to another person, so a problem tenant can destroy your nest egg. Renting to a problem tenant can also cause you stress and even seriously affect your mental and physical health. You need to do everything you can to avoid this. But how, exactly?
Well, follow the steps in this guide to avoid being a suitable candidate to appear on the popular TV show, Nightmare tenants, slum landlords.
Tenant Referencing
Tenant referencing is vital to ensure that you know more about your tenants. Anyone can turn up to your property and appear presentable and suitable for half an hour. Referencing, however, goes far further than someone owning a smart pair of shoes and a smile for a limited amount of time.
This is where many landlords make a huge mistake and trust their instinct. Referencing gives you two main pieces of information. When you rent your property, you are looking for two main attributes from a tenant. Firstly, can they pay your rent and will they? And secondly, can they treat your property as you’d wish while not behaving antisocially to the neighbors?
Referencing gives you employment status and credit referencing, so you can see for yourself that a person is working and pays their bills. Secondly, references from previous landlords will put your mind at rest that they can respect your investment.
Referencing is quick, easy and inexpensive, so don’t miss this crucial step when choosing your tenants. If a tenant cannot provide information for referencing, it’s best to not rent to them and wait until you find a tenant that can.
Check in regularly
It’s up to you how often you check in on your property. There’s a fine line between being a nuisance and being friendly. If you leave a property for years, then there might be nothing left of it by the time you reclaim it. While not intentionally aiming to cause damage, many tenants just don’t know much about a property’s upkeep. They might not realise that there are signs of dry rot. Or that the tree in the garden has become withered and will eventually crash into the property during a storm.
Or, of course, they could quite intentionally have let in a few cats that have now become several cats. The property now smells like a farm, and your furniture and sofas have become so scratched they are only fit for the tip. And this despite you stipulating no pets for this very reason.
If your tenants know that you intend to check in regularly, they are less likely to abuse the property and your trust. But, of course, the key here is communication. Let your tenants know that you intend to check the property quarterly or biannually. That way, you are unlikely to come across as a busybody who doesn’t entirely trust them to look after your property.
If your property looks and smells like a show home every time you visit for the first year, it may be safe enough just to call once each year when you have the gas appliances checked. If you have lots of property, checking four times a year can be inconvenient, so play it by ear, airing on the side of caution.
Keep in touch
Following on from checking the property, is keeping in touch with the tenants. The better your relationship with your tenants, the more chance they have of coming to you at the first signs of trouble.
When you receive your monthly rent (preferably by direct debit or standing order), why not send a friendly text message, saying thanks and hoping all is well with the property? And that if in any doubt, to drop you a line.
Get insured
All of the first three things we have mentioned are designed to avoid issues with the property and should hopefully put your mind at ease. But nothing can help you more to sleep at night than knowing if the worst comes to the worst, you are fully insured.
Once again, many a landlord has come unstuck because they skimped on insurance. Make sure you get the best insurance possible that covers you and covers you well for all eventualities. That includes damage to the property as well as tenants that have decided to become squatters. You’ll find many insurance companies that cover rental properties have departments that will not only pay out but will offer a service that will all but evict your tenants for you by taking charge of legal issues.
So, if stress keeps you awake at night, ditch the sleeping pills and top up your insurance.
Tenancy Agreement
And finally, a tenancy agreement is an absolute must. This is a contract between you and your tenants that makes everything legal and above board. If you don’t have a tenancy agreement, you may as well be opening your doors to squatters.
The tenancy agreement stipulates everything in writing so that there are no issues down the line. On the tenancy agreement, you can set out all the conditions for the rental. This includes the dates, length of time, who is responsible for what, such as upkeep of the garden, the fixtures and fittings and their condition, and whether pets are allowed, for example.
Rentila has tenancy agreements available for customers when they join. And if you have only one or two properties, it’s completely free of charge.
How to avoid problem tenants: Things to remember
To make sure you don’t have issues down the line with problem tenants, make sure you cover all bases.
- Referencing is an absolute must, allowing you to make sure tenants can pay your rent and look after your property.
- Check regularly – visit the property regularly so that a small problem doesn’t become a big one.
- Keep in touch – build a rapport with your tenants so they are more inclined to contact you.
- Get insured – If the worst happens, get insurance that will cover you.
- Tenancy agreement – make sure you have a clear written agreement that covers you legally.
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