Top Ten Tips for Landlords – No 9: How Can I Reduce The Risk Of Problem Tenants

If you are a landlord then of course you want to find the best possible tenant for your property.

In order to find the best tenants there are a number of things you can do in the early stages as well as decisions you can make during the tenancy to ensure all is running smoothly and any issues stopped before they become a major headache.

  1. Tenant referencing 

    Comprehensive referencing checks give you an initial insight into tenants who are interested in renting your property and whether they have the ability to pay the rent. Usually a “full” tenant reference will tell you about their credit history, their previous rental history and their employment status. It’s worth getting this done by the experts as they are more likely to spot a potential issue, and will chase the necessary people involved, which can be very time consuming. A comprehensive reference report is a vital part of the process when you are looking to rent out your property, it will help you to make a fully informed decision about the tenants you choose.However even if a tenant looks like an ideal candidate on paper, it is important that you meet them. You can tell a lot about how a person will conduct themselves during a tenancy on how they behave on a day to day basis. If you get on well with them straight away, the chances are you will have a good relationship with them during the tenancy.

  2. Ensure you have a signed, written tenancy agreement 

    By putting your tenancy agreement in writing, you will have a clear and concise record of the tenancy and it’s guidelines. A formal contract between you and your tenants, a tenancy agreement sets out the legal conditions of your tenancy, and will clearly show the rights and responsibilities for both you and your tenants, clearly displaying who is responsible for what in and around the property.It may seem obvious, but we have heard several cases where a landlord has rented to a friend or family member and kept the agreement “informal” only for it to go horribly wrong further down the line. This leaves the landlord left unprotected and feeling completely helpless.

    The agreement should include (as a minimum):

    • The names of those involved
    • The amount of rent and how payment should be made
    • How and when the rent will be reviewed
    • The full deposit amount and how it will be protected
    • Under what circumstances part or all of the deposit can be withheld
    • The start and end dates of the tenancy
    • Conditions around sub-letting
    • The full responsibilities of the tenant and then landlord

    By completing a written, signed and dated tenancy agreement, you’ll legally protect yourself and your property. Even if you are renting to a friend or family member, a written tenancy agreement will protect them as well as you. If they don’t want to sign it you should be asking yourself why.

  3. Carry out regular inspections 

    By carrying out regular inspections, as you are legally entitled to so long as you give your tenants the correct notice, you should be able to spot any potential problems before they become serious issues.For example a small stain on the ceiling that the tenant hasn’t noticed could be an easy fix, before it turns into a major leak and save you time and money later on. Additionally inspections are a great way of ensuring that your tenants are looking after the property well, as well as building a good rapport with them.

  4. Keeping in touch 

    By keeping in touch with your tenants regularly (although be mindful of the rights of your tenants to “quiet enjoyment”) you stand a better chance of the tenancy being a success and your tenants being respectful of both you and your property. Building a good relationship with your tenant is important, as it means they will be more likely to contact you straight away as soon as any issues arise.Staying in touch does not mean having a detailed conversation with them on a weekly basis, or just “dropping by” the property which is in fact illegal. A quick text message just to check in every month or so never goes amiss.

  5. Having the right insurance 

    Specialist insurances are available to landlords to cover for things like unpaid rent or malicious damage by a tenant. Whilst it won’t reduce the risk of problems occurring, at least you will have peace of mind that in the event of the worst happening, you will be covered.Many landlords do not consider cover for unpaid rent unless they have had problems in the past. This type of insurance is usually referred to as “Rent Guarantee” and covers unpaid rent and any subsequent legal costs. Whilst you may carry out a tenant reference, a tenants circumstances can change in the future.Many tenant referencing companies will offer policies off the back of the reference reports. However it pays to check the exact details of the cover – what is the excess if any, can you claim as soon as the tenant goes into arrears and if the insurance will pay out if your tenancy agreement has expired. This is vital if you need to evict a tenant that has stayed put against your wishes at the end of a tenancy and after any eviction notices have expired.

NEXT WEEK – PART 10 – How do I evict a tenant?

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