The 4 Solid Benefits Of A Tenant Referencing Check For Property

Being a property owner or landlord isn’t an easy task. Not only are you notoriously looked upon as being ‘evil’ from cartoons and novels that depict money grabbing property owners like those depicted in Charles’ Dickens novels, but half of the battle is finding a tenant that is actually who they claim to be.

By word alone, every tenant considers themselves to be the bee’s knees – but in some scenarios, they aren’t. From an interpersonal perspective, it can be hard to assess if the tenant is telling you the truth or not. A tenant might exaggerate their chosen income in order to achieve a property that they love but is slightly outside of their comfortable income bracket. An employee might suggest to you that they’ve paid their rental agreements in the past, but could have a large debt with a previous letting agent.

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This is instructive to know, and can help you identify if the chosen application is suitable enough to take your property on or not. Without a stringent testing process, such as a tenant reference check, you’ll be relying on word alone, and in most businesses legal practices today, someone’s word is not good enough. Using a rental property management firm to help facilitate all aspects of this negotiation and drawing up of the contract will help you focus on what matters –  getting the property up to speed.

The benefits of a tenant referencing check are numerous. They include but are not limited to:

Assurance Of A Tenant’s Credit History

A credit history report is a very important piece of information to understand if you’re doing a reference check on a tenant. This will let you know exactly how many contractual obligations the tenant has, and if they that will impact on their rental contributions. It will also let you know if there’s an event in which the tenant registers your address as the home address if rental collectors will turn up at your doorstep forcefully, or end up getting you involved in the whole situation. As a property owner, it’s likely that you don’t want this to happen, so prepare for the eventuality now.

Assurance Of A Tenant’s Income

A tenant’s income needs to be verified, but not only that, you need to know what sort of work they do. How stable is the work? Is it a freelance contract or do they work for a firm as a subcontractor? Do they have potential to raise their income bracket? Gain the most information you can from their employer, and have them verify the income that they have told you they earn. As a general rule, you want the tenant to be earning at least two and a half times above the monthly rental obligation they owe to you.

This will generally mean that if a tenant has an emergency fund to pay, such as getting a car functional after a breakdown, they will not have to prioritize between their personal obligations and paying you rent.

Assurance Of A Tenant’s Family Obligations

A referencing check can often help you understand if the potential tenant has any familial obligations or those they are financially responsible for before you let the property to them. This can be achieved by using their social security number to assess if they’ve ever applied for welfare checks before, and if the welfare check has been calculated around any dependents, they might have. Of course, just because they have dependants doesn’t mean that they won’t be able to keep up with the rent, and this is where your knowledge of their income bracket comes into account. It also doesn’t necessarily mean that a tenant is going to bring their children to live with them – but it’s important to have them expressly agree to this in the contract if you’re aiming for a no-children policy. 

Assurance Of A Tenant’s Clean Past

A criminal history should be directly stated to you by the tenant, or through the letting scheme encouraged by their parole officer. If you’re not happy accepting people who have misdemeanors or felonies, then you should completely shut of the application here. The social security number they have should let you know in clear detail what the offenses were, what punitive orders they faced due to it, and how long ago the whole process happened.

Information is power, and this is increasingly true in the world of property lettings. Getting a great tenant in your property is a matter of patience, good marketing, and a stringent background check. There has never been a more convenient time for a landlord to vet his or her clients, so it’s more that recommended that you do so.

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