Getting the Good Tenant
We spend a great deal of time making sure we get the right tenant – and I explain the processes we use to do this in my book, “Successful Property Letting – How to Make Money in Buy to Let”. We make sure they can afford it, that they are who they say they are (ID checks), we check past landlord references, run employer checks and perform a credit check.
Sounds simple when you say it fast, but there is a lot to doing this right – and to ensuring we get the right tenants.
The fact is there are some types of tenant who will suit some types of properties and some who, whilst otherwise OK, should probably be best avoided for that particular property.
The tenant-base will, to some extent, depend on the local market. In some areas properties will really only let to students. Other areas will appeal more to families and still other areas (and types of property) will appeal more to professional sharers, to “benefit tenants” or to corporate lets.
A great deal depends on location as much as the type of property and the layout of the property itself. Whether it has a garden will feature highly. For example, most families will want a garden, whereas some young professionals will be happy to be “garden-less”.
But you have to think about who you want too, because there are some tenants who are going to be less optimal for you than others, even if they pass your checks with flying colours.
So, for example, some of our properties are in demand from students, but the fact is, we don’t want to let our properties to students, so we always specify this on my adverts. We also don’t wish to let to people who are under 23 years of age. We don’t want to let to “benefit tenants” either. We state all these requirements in our adverts, but that still does not stop them calling to enquire (usually because they have not read the advert carefully enough).
So, when we get an enquiry, one of the first things we do is to ask a series of questions to rule out these groups, as there is no point in doing viewings if the would-be tenant does not meet our criteria.
The fact is our properties are in much demand partly because they are well-decorated and because we always go in a little below market rent. We have the pick of the tenants.
Applicants have to show they have a combined income of at least 2.25 times the rent and are in a solvent financial position. To establish this (and unlike most letting agents), we ask to see their last three months’ bank statements (or six months’ if self-employed). It is no good them earning a packet if their bank balance is already thousands overdrawn. You can only see this by looking at their bank statement, a credit score is not enough, though many letting agents think it is!
So why do I exclude younger people?
It might be tough, but based on experience we have found that younger people are far less likely to look after a property. Of course, there are many exceptions, but my view is “Why take the risk if I don’t have to?”
For some of our properties, we know that the size and layout, plus the era of build will mean that if we were to put a young family with two young kids in it, we are far more likely to run into problems like condensation and damp. It is a consequence of lifestyle: More kids means more washing and more “stuff” and that all leads to condensation issues and damp, especially in over-insulated Victorian terraces that were meant to be draughty not insulated to the nth degree.
For our two bed houses and flats, we like singletons and couples or a couple with one child. These tenant-mixes are preferable to two sharers, especially if the two sharers happen to be of the same sex, unless they are of course a same-sex couple in a relationship, which is also OK.
We are all human and despite our best intentions, we remember good and bad experiences and these form our preferences in the future.
So, we have had three different sets of Lithuanian tenants – and all three sets looked after our properties beautifully. As all the men seemed to work in the building trades, getting stuff fixed around our houses was never a problem – they just did it themselves most of the time, and the properties actually looked better after three years than when we first let them (and they looked good to start with!). So, yes, if a Lithuanian couple comes along, I will take notice. Prejudice, maybe, but we still do all the usual checks.
My worst experiences are with soft, dippy tenant types who are utterly impractical and who have an aversion to ever doing any cleaning. We have experienced this on three occasions. One was a British couple, another was two female British sharers and another was a couple with a child, where the man was an IT worker and who both hailed from a foreign country. The conclusion: You get good and bad in all cultures.
It is hard to know in advance if people are into cleaning or not, of course, and as a landlord, all you can do is “roll with it”, though if they come to the viewing by car, try to get a look at the dashboard and the state of the inside of the car. This will indicate how they will treat their new home.
If they come from a class and a country where they have servants who do all their house cleaning, you may need to think twice.
We have now found that if we end up with a tenant who has never cleaned the property, at the end of the tenancy we will now insist that they hire a contract cleaner to do an end of tenancy clean. There is simply no point in us expecting them to do it – and sending them our list of what they should be cleaning. If they wouldn’t know a duster from a hoover, there is absolutely nothing to be gained by sending them our end of tenancy cleaning checklist. It would be like asking a five year old to do advanced calculus.
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