A guide to finding the right tenant for your property

Whether you own one or more investment properties that you have bought specifically to let out, or you’re moving out and looking for tenants to rent the home that you have been living in, the process can be stressful.

Your property is likely to be the most significant investment you have made in your life, so finding the perfect tenants is an issue of protecting your asset as well as finding trustworthy custodians of a home that may be sentimentally important to you.

To help you navigate the difficult world of renting your property, we run down the key things that landlords should look for when screening a tenant.

Where to find good tenants

Whether you are an experienced landlord or a brand new property owner, it can be an intimidating though when you wonder how to find good tenants for your rental properties.

Use property websites

One of the broadest ways to advertise your property to prospective tenants is by using one or more of the popular online property sites such as Rightmove, Zoopla or Openrent.

The main pro of using these sites to find your tenants is that you will reach a wide audience quickly and you can encourage a good volume of interest from plenty of prospective renters.

On the downside, advertising through these sites is not free. You will usually pay at least £50 per month or more to be listed on each of the major property sites and as there is only limited functionality to filter applicants when making enquiries, you may find that you get a large volume of enquiries from prospective tenants who are not ideal candidates.

Think creatively

In terms of encouraging high quality applications from prospective tenants, you may wish to consider searching in less obvious places. Periodically browse online message boards for people searching for homes to rent.

Also, social media platforms such as Facebook, Instagram and Twitter are often places where prospective renters may post about their requirements and about themselves.

Prepare your property to encourage the right tenant

Decorate and furnish

The way you display your property will heavily influence what kind of potential tenant you will receive interest from. It is well worth spending a little money to window-dress your property for prospective renters. Unlike in the sales market, where potential buyers might see the value in a ‘do-er-upper’, renters are likely to be looking for a place they can move into straight away.

Some simple ways to make your home more appealing to a high-quality tenant include:

• A fresh coat of paint in a bright, neutral colour
• An emphasis on cleanliness, especially in the bathroom(s) and kitchen
• High-quality photographs, always taken during the day
• A de-cluttered living area
• Simple, good quality, widely-appealing furnishings

An important factor in whether you have a good tenant or not is in the way they will treat the home when they live there. An individual who views a messy, unclean home with faded decor and does not raise an objection is perhaps more likely to take less care in keeping the place in good condition during a tenancy. Conversely, showing off a clean, well-presented and well-decorated home is a way to encourage prospective tenants to maintain this high standard.

What to look for in a tenant

There are certain things to look out for when selecting your tenant for your property that can help guarantee your investment and ensure you have a harmonious relationship with the person or people who call your house their home.

Stable job

While it is not necessarily a prerequisite for a good tenancy, a stable career is an extremely positive sign in a potential tenant. Of course, many freelancers, contractors and self-employed people will make excellent tenants, however the relative insecurity of those job types means you may wish to conduct some additional checks before renting to anyone outside of regular employment.

If your prospective tenant can demonstrate that they have a stable, long-term job with a good employer, then it is highly likely that they will be in a position to pay their rent on time each month without difficulty. What’s more, employers can also act as good character references for tenants.

You are encouraged not to dismiss applications from tenants outside of full-time regular employment but instead to be aware that you may need to ask for additional guarantees and conduct extra checks, and these are outlined below.

Affordability

Regardless of whether your new tenant has a long-term job or is self-employed, you should make sure that their income will comfortably cover the rent.

As a general rule of thumb, tenants are considered to pass affordability checks if their pre-tax income is at least two and a half times the rent. And our easy-to-use calculator helps you work out whether your prospective tenant's income meets this threshold.

Keep in mind that the two-and-a-half-times threshold is simply a rule of thumb, so you can still choose rent to tenants who don't pass affordability checks. But you might want to confirm that they have other ways to cover the rent, such as significant savings or support from family members.

Long-term renter

The standard tenancy agreement in the UK is known as an Assured Shorthold Tenancy (AST), and usually (though not always) comprises an initial fixed contracted term of the tenancy, usually 12 months, before converting to a periodic tenancy which can be ended by either party with an agreed period of notice.

Some tenants will seek to have a break clause in their contract before the initial fixed term ends (for example, at the six month point). While there is not necessarily anything wrong with this, it can be an indicator that your prospective tenant does not intend to stay in the property in the long-term. This would lead to higher turnover and greater costs for you to bear as a landlord.

In exchange for a slightly reduced rate of rent, you may be able to negotiate with a tenant that they will enter into a longer fixed-term agreement, guaranteeing they will remain in the property for at least two years or more.

This is often the case with families who may be happy to enter into longer-term agreements so that they have a stable family home as their children grow up.

Check your tenant

Once you have found a potential tenant or a shortlist of possible tenants, then the next stage in ensuring you have the best renter for your property is a series of checks that allow you to vet your potential tenants.

Credit checks

As a landlord, you can (and in order to be responsible, really should) conduct a credit reference check on your prospective tenants before entering into a tenancy agreement. This can give you peace of mind, knowing that you have found a tenant who will reliably be able to pay their rent each month.

A tenancy credit check will help you find out whether the tenant has:

• Given you their genuine bank details
• Any County Court Judgements or fraud convictions
• A history of missing payments deadlines and bills
• Provided an accurate history of their previous addresses

With the three main credit reference agencies in the UK (TransUnion, Equifax and Experian) a tenancy credit check should cost you around £20 per person, though a more thorough background check will cost more.

References

To give yourself the best chance of securing a tenant that is trustworthy, responsible and will keep your property in good condition, you should ask for a reference from one or more previous landlords. Sensible questions to ask a previous landlord as a reference include:

• Did they take good care of the property?
• Did they receive their full deposit back when they left your property?
• Would you recommend them as a good tenant?
• Did they always pay their rent on time?

You may also seek a reference from your prospective tenant’s employer, seeking information such as:

• What is their salary?
• Are they employed full time or part time and temporarily or permanently?
• How long have they worked for the company?

Right to rent check

Once you are satisfied with your choice of tenant, before you can officially sign a tenancy agreement with them, you legally have to conduct a ‘Right To Rent’ check if your property is in England.

Intended as a measure to help crack down on illegal immigration, landlords have been obliged since 2014 to check that their tenants have the right to live in the country. Those with a right to rent in England include all UK citizens and holders of:

• A Biometric Residence Permit (BRP)
• A valid visa
• Documentation showing ‘proof of settlement status granted’

Legally, it is your responsibility as the landlord to conduct these checks, including checking all the relevant documentation.

Protect yourself and your property

Taking a deposit

Once you have found the tenant that you wish to trust with your property, it is usual to request a deposit before they move in. This will usually be of an amount equivalent to one month’s rent but it can vary at the landlord’s discretion.

A good tenant will be well aware of both the reason for needing to take a deposit, as well as the legal protections they enjoy when their money is taken. The deposit does not sit with you, the landlord, but with an third-party deposit protection scheme until the end of the tenancy.

Rent guarantor

A way to guarantee peace of mind regarding your rental income is to ask your prospective tenant to provide a rent guarantor. This can work especially in a situation where you have found a tenant you like and think is responsible but has less than perfect credit history.

The rental guarantor will co-sign the tenancy document and agree to pay rent if the tenant is unable to. Guarantors will usually be parents or guardians of tenants, though they can be anyone over the age of 18.

Crucially, you should always conduct a credit reference check on a guarantor as well as the prospective tenant.

Landlord insurance

When you undertake all your due diligence and make every effort to find the perfect tenant, there can still be times when your relationship will not be perfect and your tenant may not take good care of the property or cause damage, either accidentally or maliciously.

To protect yourself and your asset against financial losses if this rare and unfortunate situation occurs, landlord insurance can provide cover for damage to the home that occurs either because of a tenant’s recklessness or neglect.

Superscript’s landlord insurance policies always include building and fixtures and fittings cover, as well as property owners liability. There’s also the opportunity to include landlords’ contents over, just in case the tenant you do eventually find does not take as good care of your items in the home as you would wish.

You may also like:

• A guide to your responsibilities as a landlord
• Landlords guide to inspecting your property
• Your rights as a landlord