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Referencing tenants

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It is prudent and wise to attempt to protect your investment by vetting tenants as thoroughly as possible. Using a professional referencing company will help you achieve this, by giving you information about a prospective tenant's employment and past tenancies, indicating their likelihood to be able to pay their rent and their reliability at doing so.

Most lettings agents will perform this service for you. Some agents incorporate the cost into their fees, whilst others don't and will charge you separately (prices vary, but £30 is quite normal). They will either discuss the results with you or - with your consent - use their judgement and experience to vet the tenants on your behalf. The referencing process in itself can take up to a week. If you choose, you can pay an additional sum in order to fast track the process, which means you will usually have the references back within 48 hours.

Even if you don't want to pay to directly or indirectly use a professional referencing company, you should still take and check references from would-be tenants.

You should take the tenant's name, address, telephone number and the details of a number of other referees. These could include character references, but more important is an employment reference and the details of their previous landlords. Bank references can be obtained, but you will normally have to pay for them.

Ring individuals listed as present or previous landlords. Before you start asking them about the tenant, ask them if they have any flats to rent. Quite a few people use friends as references, sometimes because they have left their previous accommodation in dubious circumstances. This is a good way to catch people out who are doing this. If the 'landlord' sounds very surprised and act as though they are not even the owner of any rental property, you may be inclined to wonder how genuine the tenants really are.

When checking the references, you should verify that the information the tenant has supplied is accurate. You don't need to do too much investigative work into the character of the tenants. The previous landlords' tone and comments should be sufficient for you to decide whether a particular tenant is likely to be a liability.

Remember that no checks are foolproof, and referencing tenants will not guarantee their behaviour. Good tenants can turn bad at the drop of a hat, the losing of a job or any one of a host of other reasons. Some landlords refuse housing benefit tenants, while others find them ideal, especially since the benefit is paid directly to them from the local authority. Many young professionals are a landlord's favourite choice, but plenty of them can turn out to be rascals. If you are unsure, it may well be worth getting someone to act as guarantor for the tenant.

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