Choosing the wrong tenant can lead to lost income, legal actions and damage to your property, which could result in costly Landlord Insurance claims.
Conducting tenant referencing on prospective tenants is a wise way to ensure a mutually successful experience for you and the applicant, and it is a useful risk management tool.
Although tenant referencing does present some costs, taking on a tenant without having performed this reference check carries significant risks and can cost you a lot more money in the long run.
Why Should I Carry Out Tenant Referencing?
Many applicants do not disclose all relevant information for property managers or landlords to make an informed letting decision. Therefore, consider these advantages of referencing:
- Discourages applicants from hiding or falsifying their credentials.
- Eliminates any uncertainties about applicants.
- Encourages honesty while going through the letting process.
What Is The Extent of Tenant Referencing?
At a minimum, take a risk-focused approach to determine additional levels of screening, which might include credit checks, identity verification, employment and professional licence verification, fraud checks, electoral roll presence and previous address searches.
What About A Credit Check?
An additional level of verification that is essential for a tenant referencing is a credit check. This can reveal crucial information about the applicant’s ability to make payments responsibly.
Tenant referencing can include full credit history checks, including County Court Judgements (CCJs), bankruptcies, Administration Orders and more.
How Do Referencing Applications Take Place?
Tenant referencing will be more efficient, more valuable and less costly if the application contains certain elements, such as a statement that all information is accurate and that any untruthfulness or omissions are grounds for termination of the lease/tenancy agreement.
One way to streamline the process is to use an online application that requires specific fields necessary for the referencing to be completed. The completed fields can be linked directly to the reference provider’s website, which will extract the required information to the tenant referencing. When a need for revision arises, the form can be easily modified.
Can I Use a Tenant Referencing Provider?
To simplify the task, you may find it helpful to outsource the process to a tenant referencing service provider.
For many screening tasks, outside providers can be faster and more thorough. It is important that when selecting a provider, you consider its financial statements and health, its hiring and employment processes, identity theft safeguards and, of course, its service offerings.
FREE Property Insurance Review
Damage caused maliciously to your let property by tenants can often be excluded by some basic landlord Insurance policies.
As such, you must read and understand your specific policy conditions carefully to ensure that you have the correct cover for your needs.
Insync is a Property Insurance specialist offering tailored cover from single let property risks to multiple portfolios. You can Compare Landlord Insurance online, or alternatively, why not book a free review with one of our expert Gurus who will ensure that you receive the right cover at the right price.