How to find a good tenant

Price

Some landlords that I have been in contact with state that the best tenants pay the best rental prices, I have heard this many of times and it couldn’t be farther from the truth in my opinion. The best tenants usually want to get on in life and don’t want to stay tenants forever, therefore, they are saving to buy a place and need a deposit.

They are effectively ‘chucking money down the drain’ when renting your property. Why are they going to pay the highest rate? It doesn’t make sense if they are saving for a deposit.

The best properties at the best prices go to the best tenants and the rest can become a bit of a free for all.

If a property is on for too much money, then what tends to happen is you start to get the tenants with the issues putting in offers and the good tenants do not. This causes the agent or landlord to be in a bit of a predicament, do they take the bait or reduce the price? This is where risks start to take place.

The tenant that has issues such as a CCJ, or their story isn’t set up correctly, for whatever reason they are unattractive to the agent or landlord. These tenants are more likely to pay you an overinflated asking price because they have already viewed 6-7 properties and the good tenants have taken them, the tenant with issues has more than likely been rejected over the good tenants. Therefore, he/she cannot be bothered to view anymore and gets rejected, so he/she gets desperate and increases his/her budget to pay more.

This is a result of what could happen and what you risk with an overinflated price.

Again, by not risking it and taking £100 off of your asking price per month could mean that you receive a good, clean and well paying tenant as opposed to £100 more and a difficult tenant that wrecks the place.

At £100 more, you are set to receive £1200 Per Year more (which you have to pay tax on anyway), over 5 years that is £6000. The bad tenant could cost you more than that in damages anyway.

Choose the right letting agency

There are many different letting agencies to choose from, all at different prices and all do similar things, or do they?

Landlords should be asking the agent about their process or choosing the right tenant. There are many (but not all) agents out there with bad company culture and bad values to say the least. Many landlords can risk it without doing their due diligence on the agency.

Here are a few tips on choosing the right agent:

1. Call them up as a tenant looking for a property and see how they qualify you.
2. Quiz the agent on Rent Guarantee Insurance and see if they know the protocol if a tenant does not pay rent.
3. Ask what documents they collect house, agents should be taking bank statements, and payslips and looking through documents, not just leaving it to reference/credit check agencies. Just because an agent has Rent Protection, doesn’t mean you should take the risk. That is equivalent to saying that you wear a seatbelt and have car insurance, but you drive with your eyes closed.
4. Look at their reviews online, look at the recent, and the bad reviews and see if there is a pattern.
5. Look at the marketing online, an agency should be modern enough in this day and age keeping with the times. Attraction is important to both landlords and tenants, it shows the agent is current.

If you rent a pigsty, you will attract a pig

This is funny and a bit crass, but true. If you are looking to attract a nice family or a good tenant, then your property needs to reflect that.

Why would someone want to rent your place to fix it up or live in a place that is falling apart, unless they are desperate? No tenant should be improving your property.

Most tenants that are happy to take a property that is in a state are either in a bad situation themselves or are happy to live in this state, therefore, what is likely to happen is that it will get worse and deteriorate. For some landlords, this is their strategy, and it is fine, not ideal but fine. But I believe if you are walking into renting a ‘pigsty’ then you must expect to attract a pig.

I don’t implore a landlord to improve their property to such a great standard that it will not be returned in the same state or spend too much money improving their property. But it should be a place where they can safely say that they wouldn’t mind living.

If you want an honest, clean, and respectful tenant that looks after your place, then you need to give them a place that warrants being looked after, this is common sense.

Listen to your gut

A lot counts for this in my opinion, I tell the team to trust their gut too. When you view prospective tenants whether you are the landlord or agent, you will get a gut feel feelings tenant that you are about the put into the property. Gut feel comes with life experience and if any tenant wants to take a property, you should be asking them questions in conversation such as:

How many people moving in?
Why are you moving from your current place?
Who are you moving in with?
When do you want to move by?
How long are you looking to stay?
How many people working? What are their jobs? How much do you earn? Can you prove earnings?

My advice is that you can always get personal with tenants too. After all, they are renting your property and the minute you give them an AST with a set of keys, they pretty much have more rights than the landlords, therefore, you need to be making the right decisions.

If a tenant is cagey, refuses to answer the above questions or is not reacting well to answering these questions then there could be a reason for doubt and this is where you should be listening to your gut.

Each tenant has a story and the story should make sense and be easy to read, otherwise, chances are they are a risk and let someone else rent to them.

Keep your current tenants happy

If your current tenant has given notice and wants to leave the property, then being on good terms with them is key because you want them to be reasonable with you conducting viewings on the property and re-renting your asset, this is vital so that there is not much of a delay between tenants.

Also, a lot of the time a new tenant could be asking your current tenant how the landlord is on the viewings. If they are any tenants worth their sort, then they will ask this question to the departing tenants so that they know there will not be any issues in the long run.

It doesn’t mean that as a Landlord you should be taken advantage of and bend over backwards to keep your tenants happy, but you should be treating your tenants right and making sure they are looked after by you as a landlord. It will only make things easier when it comes to renting your place again.

Instant 60 Second Valuation

Click here - What is your home worth?