The harder you work the luckier you get – Ever heard that phrase? That certainly applies to being a landlord and making money, we’re all...
The harder you work the luckier you get – Ever heard that phrase?
That certainly applies to being a landlord and making money, we’re all looking in this to make money right?
The easiest way to lose money are the decisions you make before moving a tenant in. Since ultimately a bad tenant can cost you thousands?!?!?
The SINGLE best way to get a steady income stream is finding good tenants who stay long term paying the rent. There’s no magic answer to any of this, but there are also some easy steps you can take to protect yourself!!
1) Check the affordability of your tenant
Don’t be fooled into thinking if the tenant has just enough money for the rent – that they’ll be able to afford it. You need to consider other expenses which are increasingly expensive – council tax, utilities, food, fuel and even socialising. The most significant cost a tenant can cut back on if they don’t have enough money is their rent. This could be for many reasons, sickness, an unexpected bill, but whatever the reason, this leaves YOU, the landlord out of pocket still having to cover your mortgage payment. Recently I had a self-managed landlord phone me in tears; their tenant hadn’t paid the rent for several months and didn’t know what to do. One of the things we do is make sure that earnings are at least 35 times the monthly rent or 30 times with a home-owner guarantor – make sure you’re covered!
2) Check social media and a home visit!
You wouldn’t believe the number of tenants who divulge every aspect of their life on social media. Are they drug addicts? Do they like lots of parties? Are they the type of person you’d like to rent your property to? Facebook is an excellent source of information about your prospective tenant – have a quick look and see what you can find!! Also, maybe visit their home to get some of the paperwork; it’s incredible what you can find out from the state of their current property.
3) Credit Checks and Past Rental History
A leopard often doesn’t change its spots. By checking a prospective tenants credit history – have they defaulted on their debts before, is an indication of how they will act in the future. Also, getting references from previous landlords and their rental history is a good indication of future behaviour – we check a minimum of 3 years of rental history to try and identify any issues.
4) Is Gumtree the answer?
Many landlords use Gumtree because it’s free and there’s a ready source of tenants. Do you know why many tenants use Gumtree because they’re dealing directly with a landlord? Landlords tend not to reference as thoroughly – so tenants who have bad credit, county court judgements or have been in trouble with previous landlords look on Gumtree as a way to rent properties. Landlords who use Gumtree may take an employer reference at best, but are they checking the tenant’s employer or the tenants best friend? Are they checking the tenants’ previous rental history, CCJ’s? You’re opening yourself up to potential problems with Gumtree; we deal with landlords every day who’ve had a bad experience. As they say – Buy cheap pay twice, or in this case, several times over with the potential of 12 months of rental arrears!!
5) Ensure the property is let in good condition and cleaned from the start
The best way to start is the way you want to go on – make sure all repairs are done before the tenancy begins and the property is freshly cleaned. A tenant will be looking forward to moving into their new home, starting a new life, and there’s no better way to destroy any goodwill than by providing a below standard property. Ensure all repairs are done, and the property is clean so that your relationship with the tenant isn’t strained from the start. No tenant wants to move in and spend the first few days cleaning dirt and mess left by previous tenants. This also importantly means that when the tenant moves out, there will be no excuses over the initial state of the property, and the tenant will have to return it in the same good condition they received it.
Want to find out what happens when you don’t vet correctly?
Want to maximise your property income?
It’s our job to sort through tenants and present only ones who have met our criteria. Our criteria are based on over ten years of experience, plus I’m a landlord myself. I don’t vet our tenants to keep me busy; trust me, I’m busy enough! It’s simply the best way to make the most money; a vetted tenant is more likely to pay the rent, cause less damage and stay long term – personally, I’d prefer those types of tenants!
For any sales, lettings or refurb help:
- Contact us today by phone or email to move your property to us.
- We’ll contact your letting agent to ensure a seamless tenant transfer, including the deposit, keys and all paperwork.
- We’ll contact your tenant to resolve any rent, maintenance or refurbishment issues you have, arranging a property visit if required.
- We’ll begin the process of maximising your income and wealth.