At the time of writing, the universities are beginning their autumn term, prompting a huge demand for properties as students look to settle in for the academic year.

With every property listing prompting a huge volume of enquiries, how can you ensure you find the best tenant to protect your property?

In my experience as a seasoned property professional, this is probably one of the most frequently asked questions. Thankfully, it’s not something you have to work out on your own.

In this blog, I’ll help you figure out a process that will help you find tenants who will respect your property, pay their rent on time, and live out the duration of their lease with the minimum of hassle.

Although no investment is entirely risk free, doing your research and asking the right questions will go a long way towards mitigating that risk. 

TIP: Speaking of research, we’ve written an in-depth blog post on ‘how to do due diligence when investing in property’ – finding the right tenants are the next logical step from this, but depending on where you are in your property journey, it might be helpful.

Why finding the right tenants is important

When you take in a tenant, you’re handing over a major asset to them, and trusting them to take care of that asset. No-one wants their property to end up in the wrong hands, so it’s crucial that you find the right tenants as your partners. 

In the majority of tenancies, there will be minimal intervention; you’ll do your scheduled inspections and keep the property compliant and well-maintained. Meanwhile, the rent arrives in your bank each month like clockwork and you’ll develop a good relationship with your tenant. 

However, on some occasions problem can occur. From late rent payment, poor cleanilness to not reporting maintenance issues, tenant issues can create a lot of trouble for landlords. Not that I’m trying to worry you!

Here are some of the ways you can choose the best tenant to protect your property. 

Buy property in the right area

As I have discussed in the due diligence blog, buying a rental property in the right area can be the make or break decision for your investment. That’s why surveying the neighbourhood before committing to buy is essential. 

Let’s imagine you’re offered a great deal on a property in an area where there are clear signs of neglect but also signs of regeneration. You can see boarded up houses and vandalised utilities along with the building sites. 

You may not want to choose to live in this neighbourhood, but if the tenant demand is there you can look beyond the less positive points and focus on the potential. 

Make sure the rent is right

As an estate agent specialising in tenanted property, I see rents going up due to the incredible demand and a drop in the supply. 

So, it’s necessary to make sure the rent is set correctly. It’s equally important for you as a landlord to understand how the local rental market is currently performing when the property is about to go on the market. 

Have a look at the other similar properties which are currently on the market, review their rents, look for how long they have been on the market for, and look at how the property compares (furniture, decor etc) to yours.

Follow advice from your mortgage company

Most banks and mortgage companies have spent millions of pounds in profiling demographic data which they then use to specify their conditions for buy-to-let mortgages.

You may not feel enthusiastic about all of these conditions, especially if they mean changing your plans for the property, but on the positive side it means they have already done a great deal of the due diligence for you.

At the end of the day, the conditions are there to ensure that your investment is protected and isn’t adversely affected by being rented out. 

So when it comes to choosing the best tenant to protect your property, following the guidelines of your mortgage agreement is a no-brainer. 

Ask the right questions at the viewing

This might sound like common sense but if you’re self-managing the property, asking the right questions will help you understand if the tenant is right for you. Similarly, if you are using a letting agent, make sure they understand your criteria.

At the viewing (or before), you should be asking about their employment situation.  Do they have stable employment or income assurance for the rent? Have they lived in rental accommodation before? If they are students, what year are they in? And do they have a guarantor? 

References are essential, as is the capacity to follow up and ensure they are painting an honest picture. Local references are always useful if available and appropriate. Using a professional tenant referencing company is also recommended. 

You are looking for people who will look after your property, maintain a good working relationship with you, adhere to the terms of the lease agreement and overall come across the right way. 

Above all, and I’ve written about this several times, I’m a firm believer in trusting your gut. Even with excellent references, time management and communication skills, you may still get the feeling that something is “off” about the person. 

You may not be able to put your finger on it, and it certainly isn’t scientific, but if you’re not sure, it’s okay to steer clear. After all, your gut can also tell you when someone is a trustworthy person, so if that’s worked for you in the past, it’s completely valid now.  

Advice from the property pros

When it comes to tenants, I would say that there is only so much you can know about someone who is essentially a stranger from an application and interview. 

This is why it is important to mitigate the risks by following the guidelines described in this blog. Saying that, don’t rule out your gut instinct. If a tenant looks good on paper but you’re still not sure, it’s best to have alternatives. 

Make sure you are buying in the right areas and charging a realistic amount of rent. Too much and you’ll limit interest, making it less likely that you’ll find your ideal tenant. 

Make sure you are communicating your requirements well. You and your letting agent should be on the same page regarding the kind of tenant you want (guided by the terms of your mortgage, of course) Similarly, always obtain and verify references.

Finally, try not to be too impatient. There are plenty of excellent tenants out there and they are worth waiting for. 

In summary…

Thanks for stopping by. I do understand that getting the right tenants can be a long process, but you don’t have to go it alone. A good letting agent can make the whole process hands-off  and minimise the hassle all round.

If you need more advice about choosing the best tenant to protect your property, or any aspect of buying or selling tenanted property, please feel free to get in touch for a free, no-obligation consultation. 

We’re always happy to help!

Written by Ross MacDonald, Director of Sales & Cofounder of Portolio

Get in touch on 07388 361 564 or email to [email protected]