The importance of tenant referencing
With competition between tenants so high and record-low numbers of available properties, fraudulent applications are on the increase, making it more important than ever to get tenant referencing right.
As a landlord in the current climate, it can be tempting to cut corners when it comes to tenant referencing. You might think that interviewing potential tenants and taking a quick look at their credit score is enough to ensure you find a good tenant. Maybe you conduct a quick credit check to make sure everything’s squeaky clean.
But the reality is that, with competition between tenants so high and record-low numbers of available properties on the market, fraudulent applications by tenants are on the increase and the risk of bypassing thorough tenant referencing has never been so great!
Why using a third party referencing company protects you
First and foremost, thorough referencing helps you find tenants who are reliable and trustworthy. A referencing or letting agent will carry out background checks on potential tenants, paying particular attention at their employment history, cross-referencing their declared salary with their employer, will check their credit score by performing a soft credit check which will identify any adverse credit on file, and the applicants rental history. At Lettings ONE, we also contact the applicants previous landlord as well as their current one, to ensure the applicant has behaved in an acceptable manner throughout their rental history. This information can help you assess whether a tenant is likely to pay their rent on time and take care of your property.
Without the above checks, you're essentially taking a gamble on a stranger who may not have a consistent track record of being a responsible tenant.
What legal reasons are there to use a property referencing agency?
Another important reason to conduct thorough referencing is to protect yourself from potential legal issues. If you rent to someone without conducting proper ID and Right to Rent checks, you run the risk of breaking immigration laws. Additionally if you cannot identify the source of the applicants income, you may unwittingly become involved in a money laundering campaign. All of these checks are key to remaining compliant and ensuring your tenant is an honest and trustworthy individual.
Are there other benefits of using a third party?
Using a letting agent or property referencing company to conduct your Tenant referencing can save you time and stress. A professional letting agent will have the expertise and resources to carry out thorough checks efficiently, freeing up your time to focus on other aspects of being a landlord. Additionally, letting agents are experienced in identifying potential red flags in a tenant's background, which could save you the hassle of dealing with problem tenants down the line.
In summary, it's vitally important to prioritise tenant referencing through a professional agency, to ensure compliance with current legislation and to minimise the risk of selecting a problem tenant. Their expertise, experience and legal knowledge can help you find reliable tenants, protect you from potential legal issues, and save you time and stress. Bypassing referencing altogether might seem like a way to save time and money in the short term, but it's not worth the risks in the long run. So, make sure you work with a reputable local agent for referencing – it could just save you a fortune!
Need help with tenant referencing? Contact us on 0161 511 5339 or complete our contact form to find out more about our range of lettings and property management services - including tenant referencing.
