August 4

The investor's guides to avoid bad tenants

The real cost of finding tenants for your buy-to-let investment property can be huge if you get it wrong. In fact, I’ve seen a bad tenant destroy buy-to-let landlords – especially those just starting out. As strange as it may seem, there are many ‘professional’ bad tenants. They move from home to home, paying no rent, trashing property after property, and causing massive losses to each subsequent buy-to-let landlord.
The secret strategy to avoid bad tenants is no secret at all. If you know how to vet tenants, you’ll avoid them 9 times out of 10. You’ll still get the occasional tenants that go bad, but the income and profits from all those good tenants will make up for any losses (especially if you combine a how-to-vet-tenants strategy with a tenancy agreement that benefits your property management).

Moving from the first opinion to comprehensive vetting

Whenever I meet a prospective tenant for the first time, I always go through a tried and tested process that we use for all our buy-to-let landlords and their investment properties. Here are three steps to avoid bad tenants:

1. Get the applicant’s I.D.

Always know who you’re speaking to. Ask for I.D. (such as passports and driving licenses) and make photocopies. In fact, if you don’t know who your tenant is you could be breaking the law (under the Immigration Act 2014) – and that could land you a £3,000 fine.

2. Gut feeling

I like to think that I’m a pretty good judge of character, and that first couple of minutes of meeting someone for the first time certainly help me to form a snapshot opinion. This might cloud my judgement against some people who would have made perfectly good tenants, but I’d wager that I avoid bad tenants more often than miss good tenants with this initial assessment.
If you’re a good judge of character, this is your first step. If not, move onto the next step straight away.

3. Thoroughly check the applicant’s background

Now that I have the applicant’s I.D. and I’m satisfied by initial instinct, I move onto the most important part of how to vet tenants: checking background. This involves credit referencing, and checking references supplied. To make this easier, I run through a set of questions to support my efforts to avoid bad tenants. These questions include:

  • Asking for details of current and previous employers
  • Full personal details
  • Name and address and contact number of current landlords
  • Details of all the people that will be living in the property
  • Details of pets, smoking status, etc.

Going through these details helps me sort the wheat from the chaff, and also provides the details I need to make further checks. But it also has a couple of other benefits. For example, it helps to build a list of possible tenants for my next investment property.
In my next post, I’m going to discuss the tenant vetting process and tips to avoid bad tenants in a little more detail. In the meantime, if you’ve got any questions, please feel free to contact us by phone on +44 1522 503 717.
Yours in effortless property management,
Robert Smith


avoid bad tenants, buy-to-let landlord, how to vet tenants, investment property

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