Finding The Right Tenant

Finding the right tenant is key, and finding good tenants is by far the best way to ensure you maximise your profits! 

When you are looking to be successful in property investment and get monthly cash flow, you need to ensure you have the right tenant for your property. Finding a ‘good’ tenant may sound easy, and in theory it can be, but people can be unpredictable. 

When managing a property, you are essentially relying on others to ensure you get your return on investment (ROI). There are several types of tenants and these can include: students, young professionals, families, corporate, singles/couples and housing benefit recipients. Regardless of the tenant type everyone comes with different priorities, lifestyles, and habits – meaning that it can sometimes be difficult to find a ‘good’ tenant for your property. A good tenant should pay their rent on time and treat the property like their home, which it essentially is for the period they are there. By treating your property like their home, they will ensure the maintenance and repairs are all in check and if anything does go wrong, they will make you aware. 

You want to attract tenants who have stable jobs and reliable income, which is why advertising the property well is key. You will want to make sure your ad is targeting the right tenant, is well written, and includes a clear description of what is included. Sometimes getting a friend or colleague to read over your advertisement can also help a lot, as they may see something you have missed. 

Once you have attracted potential tenants you will need to make sure that you, or your letting agent do the correct checks. These will include: 

1. Verifying employment or monthly income.
2. Checking previous rental references and make yourself aware of any past problem’s landlords may have had with this tenant
3. Putting them through the full referencing process with your provider
4. Asking for guarantors if needed and rent guarantee insurances if required

Different referencing companies will offer different levels of checks. It is important to make sure that you or your agent check that what they cover is sufficient for your individual needs. By following the correct process, it can provide you with piece of mind that the tenant may be able to provide you with the monthly rent with no problems. 

Red Flags

There are also some red flags you should look out for, and some things you should do when trying to find the right tenant for your property. These include: 

• Staying wary of applicants who only provide mobile numbers or personal references as this may be a sign that they are trying to hide something
• Highlighting and investigating any gaps in employment history or previous renting experiences that are a cause for concern.
• If the applicant has no job security, you will not be guaranteed that monthly cash flow you need to keep the property running as an investment
• Ensuring that all your checks on the applicant are made up front before any tenancy agreements are handed over

All of this should be bought up in your referencing process and highlight any potential red flags. We always go through the correct referencing processes but also have a ‘gut instinct’ when renting out a property. Do we get a good feel for the chosen person? 

If you watch out for any information you feel is being kept from you by potential tenants and they can provide evidence of a secure monthly income, then you should hopefully be able to find a good tenant for your property. This can be done by yourself, but if you do not want to do, or do not have the time, then you can use a letting agent to do this for you. If you do this yourself then you need to make sure you do not miss anything and keep up to date with the ever-changing rental market.