Use a Professional Agency
This is our top tip and something that we believe in strongly; if you take away nothing else from this post, take away this! Use a professional and well-reputed letting agency to supply and vet your tenants. The fees will usually cost you 10% per month, but for most people this cost is well worth the reward, after all, finding good tenants should always be at the forefront of your mind when you have a free property.
If you donâ€™t use a professional letting agency, the responsibility of vetting your potential tenants as well as maintain your relationship, arrange contracts, secure deposits and make any repairs all fall directly on you. If you are renting out a shared house, you also have a duty of care to vet all of your tenants, making sure that those living in your property are safe and comfortable.
If you don’t use a professional letting agency, it is extremely important to request to see vital documents belonging to your potential tenants in order to vet them thoroughly. Listed below are some of the documents you should never fail to check:
- As a minimum, you should always request details of last three years’ residences, National Insurance number, a minimum of two referees and next of kin details.
- You should state that a copy of a driving licence, passport or other proof of identity is a requirement. Two forms of identity are better than one and should be checked to make sure they match. You also need to check your tenants’ date of birth which can be done using either of these two forms of identification.
- Ask to see the last six months of bank statements and be sure to check the name and address at the top of the statements matches other forms of identification.
Use a Tenant Credit Referencing Service
Always use a tenant credit referencing service for background checks, this small investment up front could save you fortunes later on. If the reference comes back with any doubt, disregard the tenant immediately. You want to make sure that your tenants will be able to pay their rent every month and on time so there is no point running the risk with someone who may not be able to do so.
Take a Deposit
Take at least 6 weeks’ rent as a deposit to guarantee that you can cover the costs if your tenants break anything. This is just extra security for your benefit and will help to encourage your tenants to look after your property and behave responsibly. You need to lodge the deposit money into a scheme to enable you withhold parts of it at the end of a tenancy should you need to pay for any damage.
Serve a Section 21
Serve a Section 21 notice at the start of the tenancy when your tenants first move in. Request that your tenants sign the notice so that if they break their agreement with you, you can give them 2 months’ notice to vacate your property. Tenants will usually sign a copy of the notice at that time, providing the evidence you need to prove the notice has been served. This should be done after the deposit has been deposited in a protection scheme, as this is one of the terms of the notice.
Never Stop Vetting
It is a good idea to make regular home visits so you can ensure your property is being looked after properly. You are obliged to give at least 24 hours’ notice before you visit your property otherwise your tenants have the right to refuse your entry. When you do request visits, try to maintain a good relationship between you and your tenants and work around when is best for them â€“ some tenants can be opposed to regular visits and it is easier if you manage expectations professionally and considerately.
For more information on how to find reliable tenants and how the process works, have a look at our UK Landlord Insurance