Why Landlords Should Reference Tenants and Guarantors
The standard of tenant you have in your rental property impacts how straightforward being a landlord is. When you have a dependable tenant who pays rent on time and who cares for your rental property, you have less work to do. If you have a tenant who doesn’t pay each month or who treats your rental property poorly, you will feel stressed and under pressure.
Therefore, it is vital landlords should reference tenants. Doing so allows you to remove applications from tenants with a poor track record or sketchy credit score. Similarly, you should also reference the rental guarantor if there is one.
You must reference people who are responsible for rental payments.
Given the rent guarantor is someone who promises to pay the rent if the tenant is unable to, it makes sense for landlords to vet these people too. While the presence of a guarantor is comfort for landlords, increasing the likelihood of receiving rental payments, this only works if you can rely on the guarantor.
Therefore, the guarantor should be held to the same criteria as the tenant, and a failure to do so, may cause problems for landlords in the long-term?
Is the cost of referencing tenants and guarantors worthwhile?
The introduction of the Tenant Fees Act has caused many landlords to review their outgoings. It is no longer permissible to pass many fees, including the cost of vetting tenants, onto tenants, and some landlords are looking to avoid this cost.
In the short-term, you can see why some landlords think this is justifiable, but in the long-term, it can be hugely damaging. Saving money in the short-term isn’t of benefit if you end up paying more money, or losing out on money, in the long-term. Therefore, not referencing tenants and guarantors place landlords at risk, and most landlords will be uncomfortable with this outcome.
How much would you pay for peace of mind?
While it is impossible to fully predict then future with any certainty, referencing tenants and guarantors lowers the risk of allowing a risky tenant to stay in your rental property. By referencing tenants and guarantors, you can find out if the people involved have failed to pay rent before, or if they have had run-ins with previous landlords.
If an applicant leaves you with concerns, it is perhaps best for you to look at other applications. If you don’t reference a tenant or their guarantor, you increase the likelihood of accepting a tenant who will cause you problems and money.
If a tenant leaves without paying, you may have to resort to legal means to recover costs, and this can be time-consuming and costly. Saving in the short-term, but leaving yourself open to more significant risks and penalties in the long-term is best avoided, which is why you should reference tenants and their guarantors.
If you are a landlord in or around Greater Manchester, and you have concerns about how to find reliable tenants and guarantors, call on us. At homes4u, we are pleased to say we have helped many local landlords reference landlords and tenants, and we look forward to assisting you, so please get in touch.