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Finding the Right Tenant: Tips for Landlords

Posted on Tuesday, 28 January 2014 08:13PM by Artful Lodger
With recent changes to housing benefits and fears of increasing interest rates harming rental profits, landlords are becoming more cautious about who they let to. Being a landlord can be a risky venture, with thin profit margins and a number of risks unique to the field that make it a dangerous proposition unless you’re prepared. One vital consideration is to find the right tenant for your property – with a good tenant placed happily in your property, the rest of the enterprise will soon fall into place.

What makes a good tenant? Obviously, the ability to pay rent is paramount, but this doesn’t necessarily mean you need a relatively well-off tenant in full-time employment. Tenants will come from all walks of life, and flexibility will ensure you find the right one for you. Though many landlords are beginning to shy away from those on benefits, figures show that tenants on welfare are actually more profitable – in terms of income versus property cost – than almost any other category, including families, professionals and retirees. The same goes for students, who can boast an average 6.6% yield on your investment.

Begin with a good advertisement – be clear in the sort of tenant you’re looking for, or you’ll wind up with unsuitable applications that waste both your time and the applicant’s. Consider hiring an agency to help you out – they can perform a wide range of checks beyond the reach of the average lone landlord. For example, they can perform a credit check, find references from previous landlords and confirm income with employers. Once you’ve found your tenant, they can help draw up an Assured Tenancy Agreement, and even guarantee rent from tenants who are late or miss out on payments.

Agencies can handle the selection process hands-free if you’d like, but it makes sense to at least know a little about the person moving into your property. Whether you receive references through an agency or do it directly, use the data collected to build up an image of the person – does everything add up, or does something seem suspicious? Often, your gut feeling can tell you a lot about a person: so try to meet with them personally if possible, or at least give them a phone call. This could be the beginning of a long professional relationship, so building up a good rapport with the tenant at the beginning can really help smooth out any problems that might arise further down the line.