Choosing the right tenants is crucial to creating a successful tenancy, and a harmonious property management experience. Instituting a rigorous and structured tenant screening process will help protect the interests of landlords and lettings agencies, minimising financial risks, ensuring safety, and simplifying eviction processes. This process is far from being a mere formality, as it can provide the cornerstone to a successful tenancy. In this blog, we will examine the reasons why tenant screening is so vital for landlords and lettings agencies to undertake.
1. Mitigating financial risks:
The tenants’ financial stability is a crucial cornerstone in the foundation of any successful tenancy. In this regard, screening acts as a financial compass, allowing landlords to avoid any prospective tenants that may pose a risk. A rigorous financial screening provides landlords with credit reports, employment history checks, income verification and debt-to-income ratios that provide a clear picture of a tenants’ financial responsibility, minimising the potential risks posed by unreliable tenants. Without a rigorous screening process, landlords may sign up a tenant that cannot always afford to pay their rent or household bills on time, or in full. Similarly, they may not be able to contribute to any damages incurred, leaving the landlord with the unnecessary financial burden of paying these charges, reducing their profit margin and the property’s efficacy. Even were the landlord to evict, they would be responsible for covering the property’s bills between tenancies. Tenant screening offers landlords a level of financial security that’s crucial to their success, and to a long and prosperous tenancy.
2. Protecting your investments:
Properties are more than bricks and mortar, more than mere structures. They represent a significant investment for the landlord, especially where the property may have been purchased or refurbished to bring it in line with modern requirements. Regardless, they deserve proper protection. A thorough tenant screening offers that protection, minimising the potential damages – and the subsequent loss of profit – that may arise from a neglectful or irresponsible tenant. Landlords and letting agencies can gain valuable insights into the behaviour of a tenant through rental histories, previous references, and background checks, which can help to gauge the likelihood they will act responsibly while living in the property. This can be instrumental in choosing the right tenant, and enjoying a harmonious landlord-tenant relationship.
3. Creating a safe community:
Financial considerations are not the only beneficiaries of a thorough tenant screening. Its importance also extends to creating a harmonious landlord-tenant relationship, and a safer living environment. A crucial component of the screening process is the criminal record check, which can allow landlords to identify potential tenants that may misuse the property, creating legal complications for the landlord, or who may pose a risk to the safety of the neighbours, agents, or the landlord themselves. While it is particularly important in shared accommodation, such as tenements and HMOs, where a strong sense of community is vital, by implementing a rigorous screening process, landlords and letting agents can help create a secure, pleasant environment, and take the first step toward fostering a harmonious relationship with the tenant.
4. Compliance
Tenant screening is not merely best practice, there are legal requirements too. Whilst the full tenant screening is not a legal requirement in the UK, landlords and lettings agencies are required to carry out Right to Rent checks on all new tenants – with no preferential discrimination to British citizens –to determine whether or not all individuals over eighteen are legally allowed to rent properties in the UK. Ensuring that all Right to Rent checks have been properly carried out, and are carried out routinely, can help landlords avoid potential legal complications that may arise from taking shortcuts, and thereby, become a proactive measure for landlords and letting agencies alike to ensure they remain legally compliant, and minimise the risk of issues or disputes arising.
5. Streamlining the Eviction Process:
Evictions are an unfortunate potential conclusion in any tenancy, and they can arise for myriad reasons. Implementing a meticulous tenant screening process from the beginning can significantly reduce the likelihood of needing to evict the tenant. Screening identifies potential red flags before the tenancy agreement has been agreed, allowing landlords to select the most appropriate tenant who will abide by the conditions set down in the agreement without the nagging concern of potential violations. It reduces the risk for non-payment of rent or bills, disruptive or threatening behaviour, damages, and other agreement violations. A thorough tenancy screening process reduces the potential need for any costly or time-consuming eviction proceedings.
Conclusion:
Tenant screening is a vital aspect of the property management and tenant sourcing process. Investing the appropriate time and resources into ensuring tenants are thoroughly screened is an investment in long-term success and sustainability, acting as a safeguard against potential finances uncertainties, the threat of property damages, and unexpected legal entanglements, with the added bonus of laying the foundation for prosperous and harmonious relationships between all parties. In making an informed decisions from the outset, landlords can rest assured that their property is in the hands of responsible tenants, fostering a sense of confidence and peace of mind.
