If there is one perennial issue all landlords face, it is finding the right tenants for their properties. Whether setting out with their first ever let, adding a new property to the portfolio that needs to be filled, or replacing a tenant who has moved out, getting the right people in matters.
Two key issues need to be applied when making decisions about who to let in. The first is demographic and the second regards references.
Few issues can be so central to investment as the kind of tenants a landlord wants to cater for. For instance, if student lets are the plan it is important to get properties in areas close to universities and colleges, as well as those that are suitable. Equally, semi-detached homes in the suburbs would suit families but may also work for shared lets, while city centre apartments will be most appropriate for young professionals and possibly students too.
Beyond this, there is also the question of whether it is desirable to have tenants who are claiming benefits. This may raise a number of issues, partly because the ending of the direct payment option could mean a landlord will be more likely to face arrears. It may therefore be necessary that the importance of prompt and full payment is emphasised in the tenancy agreement.
References are important for lets as well. These should be available in nearly all cases, apart from rare exceptions like a young person moving out of a parental home for the first time, or someone who has been an owner occupier but has become repossessed. For anyone moving from a previous UK-rented property, however, a reference should be sought and available. This will provide a testimony from a previous landlord that a tenant is reliable, pays the rent and other bills and looks after their home well. If the reference indicates there have been problems, this could help to prevent a tenant being taken on who could pose difficulties.
The process of choosing a tenant may also include an interview, which is a great way of finding out what the possible resident is like. As with any face-to-face encounter, it offers a chance to extract more information than just that which they will have willingly supplied, potentially rooting out any problems, but also creates an opportunity to gauge their character and personality. For this reason, backing up references with an interview may, just like with a job interview, help to ensure the selection process is given the best chance of succeeding.
Even with the best tenant in the world, however, a good landlord insurance policy is vital. Such cover can help deal with the abuse of the property by tenants or their guests, even as far as criminal damage in the case of many policies. Rent guarantee insurance can also protect against non-payment. However, it is also the case that many problems can arise through no deliberate fault of a tenant, such as accidents, fires, floods or burglaries.
So while taking the necessary steps to ensure the tenants selected are reliable and trustworthy is very important, so too is having a policy to cover against a range of eventualities, whether these are caused by the tenant or not.