Following on from yesterday’s Part One, there are ways to give yourself the maximum chance of avoiding defaulting tenants and the serious consequences this causes. In essence, this involves in-depth reference checks before you let your house or apartment for rent.
As well all know, even the most thorough checks cannot prevent redundancies but here are few tips to minimise the chances of taking on a high risk tenant.
For starters, do reference the tenants to ensure they can afford the rent on your house or flat to let. Yes, this sounds blindingly obvious, but you’d be surprised how many private landlords neglect to do this thoroughly enough. Up-to-date employment references provide useful information about a tenant’s current work situation along with employment history too.
Check the industry the tenant works in. If it’s risky in terms of possible cuts, you might want to enquire further. And remember, the once secure tenants working in the financial sector aren’t so secure any more.
Ask for a guarantor to pay any missed rent payments should the tenant default. These are usually friends and family.
It could be that more private landlords will take out legal fee and rent guarantee insurance in the very near future to help them through any difficult financial times ahead.
With cuts planned in the private and public sector, welfare cuts as well as job losses are due to take place, so social landlords should also take measures to protect themselves against financial difficulties regarding their rental properties.