In this article, we discuss the top nine warning signs you should look out for when renting to prospective tenants…
Whilst the process of letting out properties can be a rewarding one, finding the right
tenants can sometimes be a challenging task if you don’t have the right procedures in place. Finding tenants that look after the property and pay their rent on time is crucial to your business and time.
Without having a checklist of things to look out for, you could find yourself dealing with difficult tenants who neglect to look after the property or don’t pay their rent on time. To avoid having to deal with landlord and tenant disputes, we have put together a list below of red flags to look out for.
Whilst the following list isn’t an indefinite one and you should trust your own gut and judgement, it can help you look out for some potential warning signs in prospective tenants. Read on for the nine warning signs about prospective tenants that you should steer clear of…
9 Warning Signs of a Problem Tenant
1. A Bad Credit Report
A bad credit score means the applicant has failed or late to pay a previous credit card, rent or loan payment more than once. Renting out to someone with a bad credit report runs the risk of the individual continuing this pattern of late or incomplete payments, meaning you may not collect your rent on time.
In the UK, the average credit score is 797, and a “good” credit score ranges between 670 to 739. Whilst there is no magic number, we recommend renting to prospective tenants who have a “good” score as the higher the number, the less risk to lenders. To find out more about credit scores, head to the Experian website.
2. They are Critical of Everything
If a prospective tenant is already pointing out everything that is wrong with the property or the service you provide, run. We can only predict that this pattern of behaviour will carry on throughout the tenancy and could even get worse. The more you might make concessions for these demands, the more they might take advantage of you.
3. Insufficient Income
We understand that asking applicants for their past payslips may feel like you’re intruding. However, when it comes the time to collect your rent, you’ll be relieved you ever asked.
The main things you have to ask yourself is why would you ever lease your property to someone who can’t afford it? And isn’t this going to be wasting both of our time If they can’t afford it?
With the cost of living sky-rocketing recently, a lot of people have been financially effected. Whilst this is important to recognise, it is up to you if you want to be flexible if things are looking up for them. Ideally, a prospective tenant should be earning 2-3 times the cost of the rent.
4. They’re Currently Unemployed
Depending on circumstances, unemployment could just mean someone has just moved and is looking for a new job. However, you also need to protect your own interests. Without a guarantee of an income for an applicant, you could find yourself in a tricky situation.
If, however, you do want to give the prospective tenant a chance, we recommend inquiring with their former employers and landlord to get some insights into whether they’re trustworthy.
5. They Have Previously Been Evicted
Again, it is up to your judgement on this one. No doubt there could be a number of realistic and understandable scenarios for evictions, such as COVID debt or redundancy. If you do want to find out more about an applicant with a previous eviction, you could have a conversation with the individual, or speak to their former employer or landlord.
To find out more about whether applicants have evictions, you can run a tenancy screening check. This looks for things like bad credit, criminal records and past evictions.
6. If the Application is Incomplete
If the prospective tenant does not provide all the information you require, then you should raise some concerns with the individual. Firstly, it is important to check that this wasn’t a mistake before jumping to conclusions that they’re hiding something. However, if they cannot provide all the details you require, maybe you should rethink letting it out to the potential tenant.
Additionally, if the information they provide is contradictory to their credit score, tenancy screening or references, you should have a long think as to whether they’d be suitable for your property.
7. Questionable References
References are a major source of information for you to check your prospective tenant. Therefore, it is important to make sure the references the individual has provided are from credible sources. These include a former landlord, employer, or professor, and not a close friend or family member.
If references aren’t provided or they only supply limited knowledge about the individual, this is not really a good sign. This greatly limits your ability to judge whether the person is suitable or not.
8. Having a Criminal Record
Whilst performing a criminal background check is not legally required in the UK, many insurance providers require landlords to notify them if anyone living at the property has a criminal record. You can check to see if the potential tenant has any past criminal convictions through requesting a basic disclosure certificate.
Although it is completely up to you on whether you want to rent to someone with a past criminal conviction, it may be worth considering what crime they’ve committed before making a decision. For instance, someone who committed a petty crime in their youth is going to pose far less of a potential risk than someone who has committed GBH.
9. They Haggle Over the Rent or Deposit
If they’re haggling over the deposit this should be a concern. Firstly, it suggests the potential tenant might not have much cash liquid, so there could be a few financial problems down the line. Secondly, it could mean they may have had their deposits forfeited in the past which is usually down to property damage.
Whilst is it somewhat expected for people to negotiate a bit with the rent costs, it is a red flag if they’re trying to get it lowered dramatically. This could insinuate the individual won’t be able to afford the cost of the property in the long-term.
That being said, the biggest cause for concern is when a potential tenant tries to talk down the price before viewing the property. This suggests the individual is not serious about the property at all.
Feeling Confident in Spotting a Bad Tenant?
Having the right procedures in place can save you a lot of time when it comes to dealing with difficult tenants. Whilst this list can provide some decent structure to checking individual’s credentials, it is not an exhaustive one.
Additionally, don’t neglect your instinct when it comes to making decisions about tenants as your gut usually knows when something is wrong.
Please be advised that this article is for general informational purposes only, and should not be used as a substitute for advice from a trained property professional. Be sure to consult a property professional if you’re seeking advice as a landlord. We are not liable for risks or issues associated with using or acting upon the information on this site.
