Taking a tenant at face value is obviously not the best judge as to whether they are trustworthy, reliable and prompt payers! The question is how do you really check them out? Even references are not foolproof, that is why you need to check out what measures your reference provider is taking to ensure that the information provided to you really is of value.
The first part in the letting procedure is obtaining proper references. Your insurance company will insist upon this, especially if you are taking out cover for legal expenses and rent guarantee (a sensible option.) Many agents outsource this service to specialist reference providers, these may differ in quality of service, so check them out! Being a landlord can be quite lucrative, but it can also bring its own issues, from fraud and identity theft to having the tenants from hell.
These periods of economic uncertainty are breeding grounds for fraud. Nothing should be taken at face value, it is vital to do the relevant checks. To verify income, gather the relevant references from the tenants' employer and any previous landlords.
The next step would be to verify their suitability to actually rent a property. This should be carried out by an unprejudiced , expert third party and must include county court and bankruptcy searches, identification checks and validation of bank sort codes. If utilising a reference checking firm, make sure that they carry out the necessary checks in detail. It is not enough to just have a basic credit check, full identity and fraud checks need to be carried out.
The following should be supplied by your provider:
Authentication
This literally means ensuring that your tenant is who they say they are. Previous addresses this will throw up if there are any CCJs. Data searches should look for detrimental information at undisclosed and linked addresses, if the tenant has failed to disclose a particular address it could mean that they may have something to hide.
Employer’s references
It is incredibly important that your client has the means to financially keep up with the rent, so to have their employer's details is vital. The employer's details should also be authenticated as they could be fictitious.
Guarantors
If a guarantor is getting involved they too need to be verified, and should be as carefully referenced as the tenant themselves.
Tenant history
Any previous landlord references should include all details of the tenancy even if they were model tenants, did they leave in arrears, leaving all kinds of property damage behind them? Obtain a three year address history with a reference from the most current landlord.
Most landlords want things to progress as quickly as possible, but it is crucial to note that you can't substitute quality for speed. All the necessary checks must be carried out properly; it really is pointless trying to rush proceedings only to find that you now have the tenant from hell. It's all about protecting your property and making sure that the rent is covered each month, this is why a full check on your potential tenant is vital.
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