The Importance of Tenant Referencing
In the quest to save money the importance of referencing tenants can be overlooked by novice landlords and in some cases even Letting Agents.
It goes without saying that knowing who is moving into your property is crucial, after all your property is probably one of the most important and expensive assets you own, so surely you wouldn’t just want anyone moving in?
The cost in time and money to evict an unsuitable tenant can run into the thousands, meaning the pursuit to save money from the offset could possibly back fire into a significant financial disaster. The average solicitors fees to get a tenant to court is above £500, plus potential damages to the property and missed rental payments means that the costs to the landlord soon rack up.
FCC Paragon, one of the UK’s leading tenant referencing companies, is urging landlords and Letting Agents to make sure they carry out a comprehensive tenant reference before proceeding with a let, as this will ensure the tenant is who they say they are, provide an insight into their ability to pay the agreed rent, as well as their history of paying rent in the past.
Janie Gaston, Operations Director of FCC Paragon comments; “Typically a good reference will include a credit history check which will highlight any CCJ’s and bankruptcies, identity checks, affordability calculations and residency checks. However, we find it is just as important to obtain references from the current/ previous employer and the current/previous landlord as this can potentially reveal more about the tenant’s suitability.”
By checking all of the above, landlords and Letting Agents can minimise the risk and filter out the possible ‘bad tenants’. Once all the relevant information has been gathered, a landlord can then make an informed decision as to whether or not the tenant is suitable.
Obviously proper tenant referencing significantly reduces the risk, but there is still the threat of a tenant losing their job along with changes in personal circumstances and being unable to pay the rent, albeit through no fault of their own. Therefore, FCC Paragon advises landlords to protect themselves further by obtaining adequate rent warranty cover. If a tenancy does go wrong, a rental warranty will cover lost rent and legal fees including court costs.
If you’re looking for peace of mind, FCC Paragon can help you. They understand the risks associated with the lettings market and offer a variety of different options and ways to reference your prospective tenant. You can choose to have your tenant referencing report delivered to you instantly, within 1 hour, 24 hours or 48 hours (subject to referee availability) and you can also decide whether you want an “instant” report which is simply a credit check or a “full” tenant reference which is much more in depth and comprehensive. FCC Paragon also has a wide range of rent warranty products available from a basic cover to a more comprehensive cover that pays up to vacant possession, even if the tenancy agreement has ended, as long as the warranty remains in place.
For further information on FCC Paragon’s products and services please call 0844 375 9616.
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We are authorised & regulated by the Financial Conduct Authority. Our Firm Reference No. is 304595. Our Consumer Credit Licence No. is 647394.
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