Why reference check tenants?

To a landlord, spending money on reference checks can seem like a waste of money. You’ve met the tenants and they appear lovely, genuine people and they have shown you payslips to prove they are fully employed and can afford the rent. So why bother?

There are different levels of reference checks, from basic credit checking to a full referencing process. The later will normally include verbal or written references from the tenants’ previous landlord and current employer, affordability calculations, ID verification, and a variety of other checks and searches.

At the very least a basic credit check is a must; just because the tenant earns enough to cover the rent, doesn’t necessarily mean they can afford it. A payslip doesn’t tell you about the £20K CCJ they are having to pay off. We have seen many tenants who seem like a good bet at first, but when the referencing checks have been completed, we have discovered that they are 4 months behind in rent, or left their last property needing thousands of pounds worth of repairs and redecoration.

An ID check is also extremely important. Could you spot a fake passport or driving licence yourself? In the last few years instances of tenants using doctored ID to gain fake references has risen.

In a recent case in Aylesbury a woman walked into a high street agency and managed to rent a £1550 per month property using a fake ID. The landlord was reluctant to pay for a full reference, so he arranged to meet the tenant at the property to ascertain whether he thought she would be suitable. He was impressed by her professional and confident manner, her smart clothes and expensive car. He took the details of her fake ID and carried out a quick, low cost online credit check which showed she was earning in excess of £50K per annum – or rather the name on the fake ID was earning over £50K - and so gave her the keys. She never paid a penny in rent and it took 7 months for the landlord to evict her, costing them thousands of pounds in court costs, as well as the lost rent. She was a professional con artist and believe me these people are hard to spot. If the landlord had paid for a full reference check from a specialist referencing company, they would have immediately realised the ID was doctored – most specialist referencing agencies now have advanced software that can spot fake documents just by scanning a copy.

In addition, you want to know that the tenant will look after your property well during the tenancy, so a reference from the previous landlord is as important as knowing your tenant can afford to pay the rent. Would you be able to tell if the number the tenant has provided is actually the previous landlord or a friend of theirs who owes them a favour? If you are not sure, then use a professional agency or reference checking company to do it for you.

As a landlord, your rental property is a hugely valuable asset that provides regular income for you and your family. When you are looking for new tenants to live in your property, you will want to make sure that they are the best possible renters for your tenancy. Conducting a thorough tenant referencing check is the best way to weed out bad applicants and ensure that any potential new tenant can realistically afford to pay the rent each month and will take good care of your property. 

Unpaid rent and property damage costs landlords billions of pounds each year – so don’t rush to fill your property without conducting a proper reference check first.