The growth of DIY Landlords is a phenomenon in its own right, driven by Landlords desire to save money and a general belief that agents have little of value to offer. However the selection of Tenants is an area where the DIY landlords typically have little or no experience and this can cause many problems.
I think that most people are generally trusting, landlords included. When faced with a potential applicant many Landlords are inclined to take them at face value, however this is akin to playing Russian roulette and their good naturedness can end up costing them far more than their pride.
The most common mistakes that Landlords make when choosing a tenant are:
• They rush the decision because they are under pressure to cover mortgage payments. The solution to this is simple increase the number of applicants that you have to choose from, one key way to achieving this is make sure that you have your property listed on as many web portals as possible another simple thing is to price your property realistically.
• They don’t check the references. Checking references will help weed out any tenants who are obviously unsuitable. There are plenty of professional reference checking service which landlords can use to confirm the tenants credentials.
• They don’t confirm ID and income prior to signing the contracts. Landlords simply need to tell the tenants that before they move in they’ll need to provide proof of id, passport, bank statements and wage slips or benefits letter.
• They don’t do an inventory and get it signed. Not doing an inventory will invalidate the purpose of taking the deposit. Without proof of the properties state at the beginning of the tenancy it will be impossible to claim that the tenant is responsible for any damages and the deposit will be returned to the tenants and the landlord stuck with picking up the tab.
There are other options aside from dealing with a Letting Agent which is still a reasonable solution. The current economic climate has spawned the development of Pay as You Go Landlord Services. Landlords can choose which services they wish to use, services available on a pay as you go basis include; Tenant Sourcing, Reference Checking, Contract Signing, Inventory Support, Rent Collection, EPC’s and much more
Inexperienced DIY Landlords are taking huge risks when sourcing tenants by not following the time tested rules. Getting the wrong tenant can end up costing them far more than their dented pride; it’s akin to playing Russian roulette. DIY Landlords can avoid the most common mistakes by:
– Making sure their property is marketed to as large an audience as possible
– Making sure to check the references of prospective tenants
– Making sure to confirm the ID of their prospective tenants
– and finally making sure that they do a thorough inventory before the start of the tenancy
DIY Landlords follow these simple steps and enjoy a successful tenancy