Buy-to-let investing in the UK has become a popular way for individuals to generate passive income and build wealth over time. However, finding the right tenant is crucial to the success of your investment. The right tenant will pay their rent on time, take care of your property, and renew their lease, while the wrong tenant can cause headaches and financial losses. In this blog, we will discuss how to find the right tenant for your buy-to-let property.

There are a few key things you are looking to 

1. Credit score and rental history: Look for a tenant with a good credit score and a history of paying rent on time.
2. Income and employment: Make sure the tenant has a stable source of income and a verifiable employment history for the duration of the tenancy.
3. Background check: Conduct a background check for any previous breaches of tenancy .
4. Personal references: Ask for personal references from previous landlords or colleagues to get an idea of the tenant’s character and behaviour.
5. Pet policy: It’s important to get this question out the way. If you’re not happy with pets then check your potential tenant is happy with that up front. Being pet friendly can be very advantageous for a landlord when it comes to finding a tenant, as there are less pet friendly properties on the market

Background Checks and References 

Obtaining and verifying tenant information is essential when screening potential tenants. There are several ways to verify a potential tenant:

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There are few ways you could approach getting references for your potential tenants, which we’ll cover more in depth later, but to start let’s look at what a standard check will typically require a tenant to submit. To find out everything you need to know on a tenant you’ll need some, or all, of the following:

• Recent bank statements.
• Recent pay slips.
• Current landlord/managing agent reference.
• Employer reference.
• Bank account details.
• Proof of current address – e.g. a recent utility bill.
• Proof of previous addresses.
• Accountant reference (if self-employed). 
• Proof of identity.

What are the different methods I can reference check?

The DIY method. Simply request the previous landlord’s details for a reference: This is one of the most straightforward ways to get a reference for a tenant. Ask the potential tenant to provide contact information for their previous landlord, and then reach out to that landlord to ask about the tenant’s rental history, including things like timely rent payments, property maintenance, and any issues that may have arisen during their tenancy. It’s a cheaper way of referencing but does put the ownership on you. You also run the risk of being given a reference from a non-legitimate source – e.g. from the tenant’s friends

Use a Tenant Find service. A Tenant Find service, if you choose the right one, will do all the work for you. As well as finding your tenant, a full service will not only do the referencing for you, but usually handle everything you needed to move your tenant in. Home Made offer a great Tenant Find service at very competitive prices. 

Use a referencing service: There are several companies that offer reference-checking services for tenants. These companies typically provide landlords and property managers with detailed reports on the rental history and creditworthiness of potential tenants. Some examples of companies that offer these services include: Tenant Verification Service, RentCheck, MyRental, SmartMove by TransUnion or Tenant Screening by Experian

What if a Tenant has no prior rental history? If the potential tenant has no prior rental history, or if you have concerns about their previous landlord reference, you can ask them to provide a reference from someone else who can vouch for their reliability and responsibility. This could be a friend, family member, or employer.

Credits Checks and Rental History       

If your reference checking doesn’t include credit checks then it’s important to thoroughly credit check potential tenants in order to ensure that they will be able to pay rent on time. There are a few options for credit-checking potential tenants. 

Use a tenant referencing service. One advantage of using one of the services mentioned above is that they will also run credit checks for you, doing both jobs in one.

Credit reference agencies. Another option is to check the tenant’s credit by obtaining a credit report from one of the three major credit reporting agencies (Experian, Equifax, and TransUnion). 

Do-it-Yourself. Alternatively, you can ask for proof of income via bank statements. This way you’ll be able to see their income and rent payments.

Interviewing potential tenants

Talking to the tenant can be very revealing. During the interview process, it is important to ask questions that will give you an idea of the tenant’s lifestyle, habits, and priorities. Some examples of questions to ask include: How long do you plan to stay in the property? How many people will be living in the property? What are your hobbies and interests? By evaluating the responses, you can assess compatibility and determine if the tenant would be a good fit for your property.

Top Home Made tip: Conduct the interview before you go to the expense of getting references. It will allow you to compare the info they voluntarily give you against the information that comes back from the formal referencing. That way you can judge how honest and transparent they are 

Choosing the right tenant

Once you’ve pulled together all your background sources it is important to weigh the pros and cons of each candidate. Consider factors such as creditworthiness, job stability, and rental history.

Maintaining a positive landlord-tenant relationship

Once you have chosen the right tenant, it is important to maintain a positive landlord-tenant relationship by communicating clearly and regularly, and by being responsive to any issues that may arise. This includes handling late rent and other issues in a timely and professional manner.

In conclusion, finding the right tenant for your buy-to-let property is crucial for the success of your investment. By understanding the rental market, screening potential tenants, interviewing candidates, and maintaining a positive landlord-tenant relationship, you can ensure that you find a tenant who will take care of your property and pay their rent on time. For additional resources, consider consulting with a property management company or a real estate attorney.

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