Choosing the right tenant is one of the most crucial parts of letting your property. A rogue tenant can leave you in a desperate position, with costly eviction and legal proceedings not to mention time and money spent on repairs and the time in which your property is uninhabitable whilst a non-paying tenant refuses to leave or whilst repairs are carried out. Following a good application process with interviews and references is essential to minimising the risk of getting a bad tenant.
You should spend time with prospective tenants getting to know them and always ask their reason for moving, try to build a good relationship with them from the start. Be as thorough as possible with your background checks, talking to previous landlords and doing a credit check. However, it is still possible that despite all due care you find yourself with a non-paying tenant, here are a few tips to keep the cost of having a bad tenant to a minimum.
1. Start Right
Visit your property in the weeks after the tenants move in and make sure you are letting it to who you think you are. Make sure that every adult staying in the property has the ‘Right to Rent’. Give them an accessible way to contact you so that if they do encounter problems for whatever reason they have no excuse not to get in touch.
You can ask tenants to provide a guarantor. This is particularly important if they have a low income or are under the age of 30. If the tenants are on LHA then you must ensure you ask for a guarantor. This is a good safeguard against rogue tenants and should ensure that you get your rent money no matter what. It will give you peace of mind and also protects your tenants from getting themselves into a difficult situation.
Make a clear inventory of your property including the condition of items and run through it with your tenants, both sign to agree on the contents and condition of the property. This list should include photos of the items and condition of the walls, carpet etc. This will all help when it comes to settling any future disputes.
You must take a deposit and put it in one of the government’s deposit protection schemes. The amount you ask a deposit is up to you but 6 weeks rent is a common amount.
Landlord Insurance is another safeguard that will give you peace of mind over renting your property. Check the details of your insurer to confirm that they cover the type of tenant you are renting to e.g. students, LHA.
Do regular inspections on your property. As well as checking the condition of the property be aware of subletting, benefit fraud and check that your property isn’t being used for anything illegal. Be aware that criminals often target private landlords.
7. Guaranteed Rent Schemes
Guaranteed rent schemes ensure you will get your rent but at a slightly less than market value rate and there are other hidden costs with these schemes. Effectively you rent your property to the company who guarantees your rent and they sublet to the tenants. This offers good protection to the landlord but at some cost.
8. Letting agent
Letting agents can also help you should a tenant turn bad, another reason to consider using one instead of self-managing your property. ARLA suggest that you ask your letting agent about cover in case of damages, non-payment when you begin a new tenancy.
9. Landlord Association
Joining a landlord association such as RLA offers you advice and help as well as cheaper legal services such as £80 for a section 21 notice. The membership fee is £80 a year.
Before letting a property, you need to make sure you have at least a basic knowledge of the law surrounding landlords and rental properties should there be a need for you to evict a tenant or follow any legal proceedings. It is always helpful to find a mentor who is more experienced than you and to make sure you have the relevant training.
We have a range of courses and books to help you on your journey as a landlord as well as a selection of mentoring packages. Take a look at all we have to offer here.
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