Nowadays, it seems all too common that bad tenants are a constant thorn in the side of many UK landlords. But what makes someone a bad tenant? And do you know how to avoid bad tenants?
There can be various things. Ranging from tenants that consistently do not pay their rent on time to tenants that regularly cause damage to your property. There could also be complaints from the neighbours about the tenants renting your property that never seem to get resolved.
Whatever the problem, bad tenants exist and remain a big issue for many UK buy-to-let landlords.
So what can you do about it? We’re about to share with you a few steps on how to avoid bad tenants in this blog post.
1. Conduct Adequate Background Checks
It’s always ideal to let your property using a real estate agent. The reason being is through a real estate agent, prospective tenants are always required to fill out an application form and a prospective tenant will need to inspect the property first with the real estate agent. In the application form, a prospective tenant will need to include employment details, payslips as proof of income and references from previous landlords, friends or family.
If you need more information on referencing prospective tenants then you can read this article by the Property Investment Project that covers this in extensive detail.
2. Always Get A Tenancy Deposit And Put It Into An Authorised Tenancy Deposit Scheme
There are no “IFs,” “ANDs,” or “BUTs” on this one. You need to always collect a tenancy deposit no matter what the prospective tenant tells you. Never let your property to tenants who can’t pay this fee. Once you get the fee, be sure to put it into an authorised tenancy deposit scheme.
This is protection for you in case any damage to your property occurs or some other issue arises as a result of your tenant or tenants.
3. Don’t Accept Cash Payers
It’s tempting to accept cash payers, especially since most of them offer months worth of rental payments upfront in cash. But a cash payer usually is never a good sign. If you’re offered cash you should reject the tenant. In many cases, cash payers often have sinister motives like using the property for growing drugs, turning it into a brothel, or some other illegal activity.
By offering a large cash payment upfront, the landlord tends to stay away from the property for a period of time. The other reason why cash payers will try to pay with large cash payments is because the renter may have a poor rental history. Offering cash is an attempt to distract the landlord from their past rental history.
Either way, be wary of anyone offering cash payments unless you personally know them very well and can trust them 100%.
4. Get a Well Written Tenancy Agreement
Never accept any tenants that refuse to sign a tenancy agreement. A tenancy agreement contains the terms and conditions of living at your property. The agreement needs to outline what is acceptable and unacceptable. It needs to outline what the tenants are responsible for covering financially and what you, as the landlord, will cover. It also outlines the period of the letting.
Accepting tenants without a signed tenancy agreement is a recipe for disaster. If there is a dispute and it goes to court, you could find that the court favours your tenants rather than you. Don’t take this unnecessary risk. Get a tenancy agreement written up and signed by you and the tenants.
5. Undertake Routine Inspections
You’re legally entitled to undertake routine inspections of your property. Make sure your tenancy agreement clearly outlines how often you intend to carry out an inspection. If you’re renting through a real estate agent, then they will do this for you. This is preferable for many landlords.
6. Don’t Accept Just Anyone
If you’re property has been vacant for a while, then you’re losing money. It can be tempting to accept the first tenant that comes along just to start generating income again. However, it’s something you should avoid especially if there are other warning signs that a potential tenant could be a bad tenant.
If you accept a bad tenant then it’s likely going to end up costing you more in the long-run with a whole myriad of different issues.
7. Maintain Good Relationships With Your Tenants
You never want a relationship with tenants to turn messy. Always try to keep things cordial and respectful, and do the right thing on your end.
There will also be times when things happen to tenants that they can’t control. For example, getting made redundant in their job and then needing to find somewhere cheaper to rent. In times like this, you want a good relationship with your tenant so he or she feels comfortable telling you something like this.
Finally, if your tenants need anything, especially regarding maintenance to the property, then make sure you respond as soon as possible and do your bit to maintain good relations.
Final Words: How To Avoid Bad Tenants
Follow the points we’ve outlined in this blog post and your likelihood of experiencing bad tenants will decrease. If you need any kind of legal advice about letting your property, let us put you in touch with a range of qualified lawyers.
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