There are many moving parts when it comes to looking for tenants for a property – you must think of the legalities and also any upside or downside risks associated with renting the property so we have compiled 8 essential things to consider when looking for tenants.
Does the tenant have the right to rent in the UK?
The right to rent check in the UK came into force on 1st February 2016 and requires landlords or their letting agents to check that the tenant has the right to rent in the UK. This check is to confirm whether the tenant legally has the right to be in the UK. Failure to conduct these checks could result in a civil penalty. You must see the original documents that any would-be tenant provides, and it is a particularly good idea to keep copies of this on file.
The following will have the right to rent in the UK:
- You are a British or EEA citizen
- You have indefinite leave to remain or settled status
- You have refugee status or humanitarian protection
- You have permission to be in the UK, for example, on a work or student visa
- The Home Office has granted you a time-limited right to rent
Can the tenants afford the property?
If you have found what you think is a suitable tenant, you should look closely at their affordability and ask yourself – how many incomes are coming into the house. A good way to measure their affordability is to check that the prospective tenant earns more than 30 x the monthly rent per annum. Also, consider what line of work the tenant is in, do they work in a job sector that is resilient and buoyant? Your letting agent will be able to undertake references on any prospective tenant – this is important and you can read more about this here.
How does my property compare to others in the area?
If you are at the stage where you are marketing or need to adjust your marketing approach and advert – you should look at other properties in the area, especially the ones which have recently let.
Think about your pricing, space in the house, the condition & specification of your property verses other properties in the area – this should give you a realistic conclusion. If you defy the market and overvalue, the market has a strange way of responding and if you are not honest with yourself about the price you asking of your property – tenants simply won’t click on your advert online and the number of viewings through the door will be low.
Should I negotiate on the rental price?
Check when your tenant would like to move? This should match your availability date. How likely are they to stay longer term? If they want to stay longer term – it may be worth agreeing a lower price
(if the prospective tenant ask for a reduced price and the market price being offered is realistic). As a Landlord you could always exercise your right to a rent increase in 12 months’ time – keep a longerterm view rather than a short-term gain. Consider if there anyone else interested in looking around the property? You should undertake as many viewings as possible with applicants fitting your tenant profile to give yourself the greatest chance of finding the best all-round tenant.
What is their rental history like?
Obtaining a previous landlord reference is one of the most important parts of finding a suitable tenant. Hearing that a tenant has been a consistent payee, on time, and in full is exactly the type of due diligence a Landlord needs to undertake to know what they are getting themselves into. If a tenant has been in tenancy arrears it may also show up on a credit search – Landlords should keep a keen eye on a prospective tenant’s rental background.
Know what you can do and what you cannot
Once a tenant has moved in, they are entitled to ‘quiet enjoyment’ – this means it is not the best time to undertake heavy renovations/redecoration whilst someone is living at the property – property maintenance is as far as it should go.
If you are about to enter a tenancy with a tenant know that the minimum term of tenancy is six months. This means that if you need to sell the property for whatever reason, for the first four months you cannot sell your property OR do viewings until after the first 4 months when you would give the relevant notice period to end the tenancy.
Should I accept pets in the property for a higher rental price?
Many people have pets these days, and research by CIA Landlords Insurance found that only 4% of Landlords were willing to accept pets in their property. You should look at this on a case by case basis and a few things to consider are:
- Pet owners can be some of the best long term renters (because they find it difficult to find Landlords’ who will accept pets)
- You may be able to negotiate a higher rental price
- Ask for the ages & breeds of the pets before committing – do your own research
- Take a higher security deposit to cover if there are any extra costs because of the pet
- Your tenancy agreement should stipulate that upon vacating, the tenant should pay for the carpets to be professionally cleaned & the property fumigated. Some tenants even offer to pay for new carpets at the end of the tenancy!
Get professional photos and virtual videos to attract as many tenants as possible
Prior to covid-19, most agents only used photography and only some agents provide a floorplan. Virtual viewing tours have become the new benchmark of how a property is marketed online. The reason why is because people conduct their full property searches online from start to finish. Gone are the days where a tenant walked into a local branch registering for properties and looking through the agent’s available stocklist. This means that all content is being consumed by your future tenants – on their smartphones, tablets, laptops – all online. Having high quality photos and videos is a must in 2020. If you do market your property correctly from the start, you could be in for an uphill battle.
Sophic Property based in Reading Berkshire have extensive experience (15 years) with Investment property, Lettings & Property Management and are based in Thames valley business park in Reading, you can get in touch by calling 0118 3246850 or send an e-mail to email@example.com.