The importance of tenant referencing

Over the last few years we have seen a rise in the demand for private rented accommodation. Obviously this is great news for landlords as having tenants in their properties means they can benefit from steady, on-going income. Although there may be a lot of interest in your property, it is essential to choose the right tenant.

Tenant references are designed to help landlords and letting agents make a more informed decision on whether or not an individual will make a suitable tenant for their property. Tenant referencing involves checking whether an individual has an adverse credit history (unresolved bankruptcy, IVA etc.) and whether or not they have ever missed payments on previous rental properties.

By checking references you can also vet a potential tenant's financial situation. You need to make sure that they are going to be able to meet the monthly rent payments you require. Most letting agents recommend that an individual's gross salary works out to be more than two and a half times their share of rent.

Better Safe Than Sorry

Whilst references are a great way to mitigate risk and ensure that potential tenants are the sort of people you want living in your property, legal expense and rent guarantee insurance provides a backstop in the unlikely event of a problem. Sometimes you may find that your tenant's circumstances change during their time in your property, which may lead them to being unable to pay their rent. Taking out a legal expense and rent guarantee insurance policy will free you from the worry of problem tenants.