The 5 Benefits of Tenant Referencing | Why Tenant Referencing is Quickly Becoming More Important Than Ever Before
Tenant referencing offers many benefits to both agents and landlords. Reassurance during the process among other benefits, it is clear that many more agents and landlords are implementing referencing before the agreements have been made.
What is Tenant Referencing?
Tenant referencing refers to the process that is performed when a prospective tenant applies for a rented property. The process consists of credit checks, employment checks, as well as references from landlords.
Tenant referencing can be a quick and easy process which allows the agent or landlord to assess the potential tenant. They can use the report to make an informed decision on whether to award the property to the tenant, or whether they will obtain other measures for additional security.
Why is Tenant Referencing important?
Tenant referencing is important as it offers necessary reassurances to the landlord letting out their property. The detailed reports offer insights that can help a landlord or agent make decisions on whether the tenant will be a good fit; As well as assisting with other preventative measures they might need to implement before the tenant occupies the property.
Top 5 benefits of Tenant Referencing:
Reassurances: This is by far the most beneficial part of the tenant referencing system. It offers the landlord reassurances that the prospective tenant can pay their rent and based on factual references look after the property.
Credit checks: The landlord will be notified if the tenant has had any negative credit. This means that they can make an informed decision as to whether they continue with the tenants application based on evidence of money management issues.
Previous references: The landlord will be aware of any negative references that have come from the tenant’s previous landlord. This means the landlord will know if the potential tenant has looked after previous properties, or been late with rent payments.
Employment checks: This is there to serve as a safeguard that the tenant can afford the rent as well as providing information in regards to the tenants employment status. This can help the landlord decide on how long they will have a tenancy agreement for. For example, if a potential tenant is in a fixed employment contract of 12 months; The landlord may offer a fixed term tenancy to ensure a tenant is able to afford the rent on a property. It can then be reassessed at the end of the agreement to see if this is still the case.
CCjs or IVAs: Having the information on any county court judgements, or individual voluntary arrangements can help the landlord make a decision on whether the tenant is right for the property.
Having a fully comprehensive tenant reference before the tenancy agreements are signed provides the landlord with enough information to make an informed decision. It can help them decide whether they wish to obtain further services such as rent guarantee warranties, and more to provide protection on their investment.