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BIG GUIDE: How to spot a terrible tenant before you sign them up

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I'm Richard Jackson.

Here are some of the best tips I've learnt in my 30 years of being a landlord, designed to help you spot a potential problem tenant before you sign a tenancy agreement.

I'm also the co-founder of Alphaletz, which is a property management software that will help you gather the right information as well as streamlining your whole property business.

This is my advice

Taking on a bad tenant can cost you more than just money. In addition to impacting your livelihood as a landlord, problem tenants can cause you sleepless nights and even cost you your motivation to stay in the private rented sector.

I've got a few war stories of my own, having been a portfolio landlord for over 30 years!

Here's what I've learnt over the years and some ideas which I hope will help you too.

Meeting the tenant

If you use a letting agent, it won't always be possible to meet the tenant, but I'�ll cover this later too.

Before you even do a viewing, make sure you qualify your prospective tenant first. Do they have enough income to cover the rent? Do they have pets? Will anyone else be living there and so on. We have prepared a free and simple tenant checklist here to help you ask the right questions.

Don't be afraid to ask questions.

If you let the property yourself, which is a lot easier than you might think, we always recommend that you perform a property viewing (either in person or even virtually) to get to know a prospective tenant a little bit first.

Sometimes you may not even need to do a viewing, I recently let a flat out with just a video and a virtual Zoom meeting.

You'll normally get a pretty good feeling straight away and if you don't get along with your tenant from the very beginning the relationship could deteriorate quite quickly and lead to bigger issues along the way.

Ask yourself the important questions:

  • Did they turn up on time to the viewing, even if it's just a Zoom call?
  • Were they prepared for the viewing?
  • Did they seem keen or just appear to be 'doing you a favour?

These may appear to be small things, but in my experience, they are the first impressions that often lead to a gut feel.

If they're displaying a lack of courtesy and respect at this stage, is there a likelihood of them treating your property the same way?

However, there are also some questions that you can't, and shouldn't, ask too. Such as:

Do you have any disabilities? If a property is available to rent it must be made equally available to able-bodied tenants and those with disabilities.

What church do you attend? Steer clear of religion as it could also be seen as prejudice if you turn them down, even for a completely different reason.

Where were you born? Also, a question which in inappropriate. But you can ask if they have all the necessary approvals to pass Right to Rent checks.

Also, what sort of questions are they asking?

  • Is there electricity in the attic? (could they be planning a cannabis farm!)
  • Can I pay a year's rent upfront? (This may seem a nice thing to have, but is it because they have bad credit history? Understand why they are asking!)
  • Is your prospective tenant another landlord looking to do a Rent to Rent? They will say something like, 'we are a corporate tenant looking to use your property for serviced accommodation for our customers'.

Be careful, this is often landlords with no money who can't afford to buy their own buy-to-let property. Sometimes it can work well but do extensive research on what you're committing to first if you go this route.

Get References before performing a credit check.

Ask your prospective renter for references from either previous Landlords or employers. These are helpful as you can get an understanding of what they're like (not only as a tenant, but a person as well!)

Don't be afraid to ask if they have ever broken a tenancy agreement in the past, and if so, why? If possible, verify what they say with the previous landlord.

Did the landlord serve them notice for not paying rent, or maybe they left because the landlord wasn't sorting issues out. If so, what were the issues, did they have unreasonable requests or was the landlord inept?

References are usually pretty revealing and speak for themselves. If a previous Landlord suggests you avoid the tenant at all costs, it's worth taking their advice, even if they pass all the credit checks!

I once had a tenant who I had to take to court to get the rent paid.

They were constantly late with the rent, and I kept getting complaints from the neighbours. In the end, I got the rent paid, after they narrowly escaped a CCJ.

On paper they will still appear to have no credit problems, as they did eventually pay, but the reality was sleepless nights for me, masses of paperwork to take them to court and a lot of wasted time.

Unfortunately, there is no tenant blacklist, so the only way to warn the next landlord is if they call me!

Nightmare tenants often refuse to provide or are unhappy to provide references as they're probably already aware of the outcome. Some might even drop off in fear of inevitable rejection, saving you the job of telling them they have been unsuccessful.

Background checks

Background checks can be a tell-all what kind of tenant you're dealing with. They're cheap and reveal a prospective tenant's renting, financial and criminal history.

It's important to note that it's illegal to discriminate based on criminal convictions in the United Kingdom unless their conviction was for a financial crime.

However, if a prospective renter has outright told you on an application that they have no criminal history, then you'll know that they haven't been honest with you which increases the risk of taking them on as a tenant.

Record as much information as you can and store it safely, here's an example of what a good tenant record looks like.

Keeping good notes and documents could be essential in the event of any dispute.

Background checks

Background checks can be a tell-all what kind of tenant you're dealing with. They're cheap and reveal a prospective tenant's renting, financial and criminal history.

It's important to note that it's illegal to discriminate based on criminal convictions in the United Kingdom unless their conviction was for a financial crime.

However, if a prospective renter has outright told you on an application that they have no criminal history, then you'll know that they haven't been honest with you which increases the risk of taking them on as a tenant.

A background check should be part of the credit check, but you can do some free research yourself using the internet.

As the tenancy application progresses it's important to keep updated as you go, this will help you be responsive and professional, especially if you're dealing with multiple applications at the same time, and often multiple properties too.

Quick Google

Often, if your tenant has been convicted of a particularly serious crime, they can be found by punching their name into Google. This again ties in with discovering if your tenant has been honest or not throughout the application process.

Ask them if they have any previous names or are known as any other name too.

Google is one of the most powerful and free tools you have available at your fingertips, . checking an applicant's social media profile can be very revealing and is another reason that we put this into the tenant profile page in the Alphaletz system. We even include Facebook and LinkedIn fields for this very reason.

If a tenant tells you they don't smoke on an application but are on Facebook with a cigarette in their mouth, then the chances are they're probably lying to you!

Check LinkedIn too for indicators on their current employment & employment history. Does it match up to what they've told you? Are there any clear indicators that the tenant seems to be struggling to hold down a job which might result in them falling into arrears?   

Go with your gut

If you're not feeling particularly confident that someone you're considering taking on is going to make regular rent payments, it's best to listen to your gut.

Nobody likes arrears, and when they start to add up, they can put financial pressure on any Landlord, not to mention the stress and extra time needed to constantly chase them..

However, if you're still undecided but they pass all the reference and background checks, and you do decide to go ahead, then make sure you always take out Rent Guarantee Insurance.

It's only about £15 per month and even covers your legal costs up to £100,000.

Cashflow can make or break your property business, one bad tenant can cause you serious issues which could even affect the rest of your properties too, like if you're depending on their rent to cover other bills and mortgages for example.

And if you start missing mortgage payments, this could affect your credit rating too or lead to extra bank charges for going overdrawn!

This again is why we put cashflow right on the front page of the Alphaletz system, so you know exactly where you are at all times with your rent payments including arrears.

These may seem like obvious things to consider, but nearly every case that I hear of that involves a bad tenant can be related back to not asking the right questions or doing your checks.

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