Whether you own one residential rental property or multiple it can be a great financial investment for your future. However, if you’re unlucky enough to end up with bad tenants, then the experience can easily become an unpleasant one, potentially involving the law and loss of income.
In order to avoid possible problems and conflict, consider these recommendations when looking at potential tenants for your rental property:
- By requesting that potential tenants complete a rental application you can ask questions that give you better understanding about them, and their reliability. Try to include the following points:
- Their annual income
- Current employment details
- Credit history including CCJ’s and bankruptcy
- Rental history
Also, in order to be prepared for potential or accidental damage/additional wear and tear then ensure you ask if they have:
- Motor vehicles
- Make it clear in the application what the length and terms of the lease are, as well as the cost of rent and the security deposit required.
- Require a small deposit be paid with the application to hold the property while you conduct tenant referencing.
- Tenant referencing for applicants is essential to determine their credentials. Do not rely on their word to validate their credit and employment histories. You will need to inform tenants that their credit and references will be checked and saved in accordance with the Data Protection Act 1998.
- Try to ensure you are aware of applicable laws prohibiting discrimination based on race, colour, religion, sex, age, disability, etc.
- Only refuse an applicant based on legitimate business reasons, such as poor credit or bad rental history, avoid all personal reasons. This should protect you from legal actions.
- When letting out your property, make tenants sign a tenancy or lease agreement. Be sure to state whom is responsible for paying the utilities, taking care of maintenance duties, lawn care and similar responsibilities.
- Outline the insurance requirements of both parties. Usually it’s the landlord’s responsibility to insure the building and premises and the tenant’s responsibilities to insure all contents.
- Give a full inventory and condition of the rental property before the tenant moves in, along with the tenancy agreements.
Whilst we hope that everything is plain sailing with our tenants, there’s always an element of the unknown. Hopefully by following these top tips you can keep your business thriving and you and your tenants happy.
If you are looking for any further advice regarding the insurance element as a residential property owner then please do get in touch with one of our advisors at Jelf. http://www.jelfgroup.com/page/business-services/property-insurance