Paramount to a successful and stress-free rental experience is tracking down the right tenant for a property and finding a good fit. A comprehensive tenant screening checklist is a landlord's most essential tool in this process, allowing for informed decisions and minimising potential risks.
This checklist goes beyond a simple application form, delving into a prospective tenant's financial stability, rental history, and overall reliability. Landlords can build a robust understanding of each applicant by examining key areas like credit checks, income verification, and employment history.
Application form
All potential tenants must complete an application form. This form should ask for their name, contact details, National Insurance Number, references, and employment history.
It will help a landlord determine whether the applicant will likely be a reliable and respectful tenant. This also allows them to vet suitable tenants and find any problems early on. For example, the applicant supplying employment history could dredge up a history of failing to pay on time or keep their property in good condition. Hence, the landlord knows exactly what to expect.
Credit check
A credit check is a review of a prospective tenant's financial history and credit report. It's the best way to determine if an applicant typically pays bills on time and manages debt well.
It will reveal:
- Bankruptcies, foreclosures and repossessions.
- Debts, such as credit card imbalances and loan payments.
- Payment history, including late or missed payments.
- History of insolvency.
A high credit score means the applicant has a history of timely payments, while a low score would mean they have missed many obligations. Scores coming in under 580 are considered poor, while 670 to 739 are good, and over 800 are excellent.
The cost of the tenant check falls to the landlord and costs between £5 and £30. Permission must be obtained from the tenant before proceeding with a tenant check.
Income verification
At this stage, a landlord can request recent pay slips, employment verification letters, or tax returns. This will establish the applicant's monthly income and ensure they can afford rent.
A standard rule of thumb for landlords is to expect a potential tenant's income to be at least three times the monthly rent, meaning the rent should ideally represent no more than 30% of their gross income.
Employment verification
An applicant's employer can be contacted to verify their current employment status. This will confirm whether the potential tenant has a reliable source of income.
This can be done in various ways, including requesting an employment verification letter to confirm a tenant's income and employment status, current pay slips, or a P60 form.
Rental history
Landlords can ask for a reference from the applicant's previous landlords to confirm details such as payment history, property condition, and any issues they may have had with the tenant.
Eviction history
This check establishes whether a tenant has a history of eviction. This can be done by accessing public records or credit bureaus, which allows landlords to assess the potential tenant's reliability in paying rent and adhering to lease agreements.
However, it's worth noting that eviction history usually only lasts up to seven years on a credit report.
Criminal background check
A landlord can request that a potential tenant undergo a basic Disclosure and Barring Service (DBS) check, which will reveal their criminal record. These will help ensure the safety of other tenants in the property.
However, it's essential to judge the results on a case-by-case basis. Just because someone has a criminal background doesn't mean they will cause problems at the property; it depends on the nature of their history.
Reference checks
Reference checks are a more general way of getting answers. Landlords can ask for references from the tenant to find out if they are reliable and responsible.
Final thoughts
A meticulous tenant screening process, guided by a comprehensive checklist, is indispensable for landlords and property managers. While each element, from credit checks and income verification to rental and criminal history, provides valuable insights, it's their collective assessment that paints a complete picture of a prospective tenant.
By diligently following these steps, landlords can minimise risks, foster positive tenant relationships, and ultimately ensure a more stable and profitable rental experience.
Discover how Fixflo can make this process hassle-free. Get a free quote.
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