| For
new landlords it can be a daunting issue, maybe as much
as £100,000 or £200,000 invested in a property
and now you are going to hand over the keys to someone
you have never met before. How do you know the tenant
will look after your property? How do you know they
will not default on their rent?
To
a degree there is a risk in every decision made, the
key is to minimise the risk in proportion to what is
at stake. For tenant background checks it is relatively
straight forward, but it is surprising how many landlords
do not do the basics. So here are a few tips.
-
1. Tenant identity. You must check for evidence
as to who they are
This needs to be a photo ID, ideally a passport,
a driving licence would also be OK but note that
these are easier to forge than a passport. You should
take a copy of these documents and note down their
name, date of birth and address.
-
2. Next you need to establish the tenant’s
ability to pay
They need to have enough income to pay the rent
and cover their living expenses. Their income can
be checked by asking for copies of their last 3
pay slips. Their expenses can be checked (to a degree)
by asking to see copies of their last 3 months bank
statements. Note the name and address on these documents.
- 3.
Ask for a reference from the current landlord or
letting agent
Assuming tihs is not their first time renting.
- 4.
Obtain a credit check on the tenant. This
is vital!
You need to check for past history of CCJs, Bankruptcy
or Insolvency. It is not unknown for a tenant to
have £10s of thousands in CCJs outstanding,
it will only be a matter of time before debt collectors
trace the tenant to your property, after which you
may not see your tenant again, never mind any outstanding
rent.
You
can obtain tenant background checks from just £8.95
(as of August 2009).
www.credit-check-services.co.uk
A
relatively small investment could save on huge problem
with tenants defaulting on their rent later.
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