As well as high demand, there is also a lot of competition among landlords. To rise above the crowd, you need your property to stand out and offer tenants what they want. But what is it that they actually want?
Landlords, just like any other business owners, are looking to cut costs and increase profits. Usually, the first thing you'll do is think about putting the rent up. But while that may increase revenue it may not have too much of an impact on the bottom line. There's another less obvious way to reap long-term gains. Screening of tenants is one of the most effective ways to increase profitability by saving you time and money.
Tenant screening is also known as referencing. And when you're finding tenants it's one of the most important processes you can go through. Screening can be a time-consuming business. It's tempting to ignore it. Or to rush through it at the last moment. But you’ll benefit in the long run by thoroughly screening all your prospective tenants.
Your tenant screening should begin before the viewing stage. It should include all potential tenants who've expressed an interest in your property. By initially screening all applicants before the viewing you'll be saving yourself a lot of time in the long run.
The pre-viewing screening will present you with a shortlist of the best tenants. You can then go ahead and schedule viewings. But if your initial screening wasn't too in-depth you should be prepared to do more referencing checks before you finally offer the tenancy to someone on your shortlist.
The whole point of screening is to help you find the best tenant possible. You need to consider their financial background, employment and previous tenancies. At the initial screening stage, you're looking to filter the list of potential tenants down to a shortlist. All on the shortlist should be able to afford the rent and have a good credit history. But they should also be able to provide further references.
The most obvious question to ask your tenant is 'can you afford the rent?' Of course, no one is going to say no but you can confirm this with credit and employment checks. The credit check will reveal any problems with non-payments and CCJs. Employment checks will reveal the tenant's employment status (full-time, self-employed etc). But also ask for an income reference. This could be in the form of a wage slip or an accountant's letter in the case of someone who's self-employed.
Another hugely important question to ask your tenant is about their previous tenancies. Insist on references from previous landlords. This is possibly the most valuable reference you can receive. A good reference from a former landlord is an endorsement of a tenant's ability to pay the rent on time and to look after the rental property. On the other hand, a former landlord can reveal any issues with the tenant and prevent you from experiencing the same.
A rogue tenant can cost you an awful lot of money. Not only in unpaid rent but in the added costs of eviction, recovery of debts and all the expenses associated with turning over tenants. But screening will reduce the risk of this happening.
Effective tenant screening will root out unsuitable renters. It’s the best way of finding tenants who'll be reliable, trustworthy and most importantly pay the rent on time.
Having said all that there are issues with tenant screening. The time it takes for one. And where on earth do you start? How do you access someone's credit report for example? Or source income references? Fortunately, help is at hand.
The good news is that there are tenant screening services out there. Yes, they'll charge a fee. But the money you'll save by finding a reliable tenant far outweighs the initial outlay. You can find these companies online. But did you know MakeUrMove's property management services all include tenant screening? This includes our great value Good Landlord package.
MakeUrMove provides comprehensive checks including credit checks, income references and the all-important landlord references. But our tenant screening services also include fraud checks and bank validation. And it's all done for you providing you with the peace of mind that comes with knowing you'll have a reliable tenant who won't let you down.
Private landlords can find tenants fast by listing their property with MakeUrMove the online letting platform bringing landlords and tenants together.