“He Who Fails to Plan is Planning to Fail.”- Winston Churchill
We list below the Detailed Questions you should ask any prospective tenant. These questions are tried and tested and are designed to help prevent rent arrears occurring and lower the risk of tenants damaging your property.
- Are they working or on benefits?
- How many hours do they work if they are on benefits? This can affect what housing benefits they receive.
- Does the income they have stated include tax credits? This can change annually depending on how many hours they work.
- Do they have 3 years rental history? If not they will need a guarantor who earns 35 times the rental amount per annum.
- Have they ever been convicted of a criminal offence?
- Are they currently paying back any housing benefit overpayments?
- Do they or their partner have any issues with previous bad credit?
- Do they have any outstanding bad credit, CCJ’s, bankruptcy orders or IVAs?
- What is the age of each person who will be living in the property? Especially important if they are on housing benefits.
- Do they have children and if so are they entitled to claim child benefit for them?
- What bedroom rate do they qualify for and are they aware of the contribution amount they would have to pay to the rent?
- Do they smoke or have pets?
- Can they provide us with their contract information; their mobile or home telephone number, current home address and email address?
- Are they aware that if they do any part time work and claim local housing allowance that their work may contribute to a reduction in their local housing allowance? (This can even be the case if they work less than 16 hours.) This can lead to a higher top up being required and tenants need to be made aware of this.
I know what you are thinking!
WOW, I can’t ask all of those questions! If you are thinking this then you are wrong. It is essential that you ask these questions. These questions will allow you to gather the information you need so that you and your tenant are both confident that your property is the right choice for them.
You should always decide what your own criteria is before accepting tenant applications. Do you accept smokers? Do you accept people on benefits? Do you accept pets?
If you are finding tenants yourself, make sure you set a criteria and stick to it. Design a script of questions, like the above, so that you can ask any new enquiry that calls up about your property.
How do I know I am right?
Before we introduced such a strict lettings criteria we had a big problem with rent arrears and houses getting trashed. My brother and I own over 150 properties and we regularly had to deal with thousands of rental arrears per month. We were like many investors, we wanted that warm and cuddly feeling you get when a property is rented out straight away so we didn’t ask the right questions at the beginning. When the problems started we decided that things had to change.
This leads us back to one of our Six Guiding Principles of Property Investment: Begin with The End in Mind!!.
With the introduction of a strict rental criteria, over the years we have continued to improve the performance of our portfolio and drastically reduce the amount of arrears we experience. In 2015, on average across our portfolio we wrote off just £1.54 per property per month which is an amazing accomplishment!
So How Does This Help Us?
Do we still rent properties out in 1 week? Not so often, not any more but for a very good reason. Although everything we do from advertising the property, to viewings and the move-in revolves around urgency we know the benefit of a thorough tenant vetting process. This process is a vital part of securing the right tenant and it is worth investing a bit of time at this stage as it will help to improve the long-term prospects of the property.
If you feel your current letting agent is just throwing anyone into your properties and does not have a strict vetting criteria then give us a call. We cover the whole of the North East- Northumberland, Newcastle upon Tyne, Gateshead, Sunderland, North Tyneside, South Tyneside, Durham, Middlesbrough, Stockton-on-Tees, Bishop Auckland and Darlington.
Mike’s # Mid Week Top Tip –
|“He Who Fails to Plan is Planning To Fail.” – Winston Churchill
Take action get in contact with us:
Rock Solid Property Investment
Or call: 0191 491 0333 and ask for Mike Bell
Investment property that will run itself letting you do the things that you enjoy