How Landlords Can Avoid Bad Tenants

Very interesting article however 247 does not agree with all comments but very much still worth the read. I have added the link from the auther at the bottom.  

Remember people choose to be bad tenants, you can have arears of rent and still be a good tenant.

In this crazy world someone decided to make a profession out of being a “bad tenant”, and like all crazy ideas, it caught on. These “professional bad tenants” are ruthless as they are ugly. They go from property to property without paying any rent, and they successfully do it for a living, leaving behind a trial of innocent (granted, and some times not-so innocent) landlords in debt.

Unfortunately, this is becoming common practice, and these professionals seem to be getting away with it. How do they do it? These professionals have become all too familiar with the legal system and know every trick in the book. Every time a landlord attempts to evict them, they appeal with various excuses E.g. I didn’t pay rent because the property was in bad condition.

The problem is, every time a tenant appeals eviction, the process of eviction is lengthened because the court needs to look into the issue before being able to dismiss it. The claims usually get dismissed because they’re fictional, but by the time each appeal goes to court, months and months pass, leaving the landlord severely out of pocket while the tenant still remains. The system definitely isn’t perfect, but it is what it is, unfortunately.

Here are a few ways to avoid professional bad tenants:

1) Tenants employment and social status

I don’t care what anyone says, but as a landlord you have to believe in the stereotypes- you have to believe that young unemployed tenants on benefits will be more problematic than middle-aged working professionals. Of course, that won’t always be the case, but it’s safer to stick with the better odds.

Resources
The best and worst tenants

2) References

Professional bad tenants have a track record; otherwise they wouldn’t be “professionals”. ALWAYS ask for references of previous landlords and current/previous employers. And don’t just relax contently once you have the references, actually follow them up and get feedback.

Be wary, professionals may use friends and families to provide references- make sure the references are legit.

3) Credit checks

There are crap loads of companies out there that will perform credit checks on people for you. It costs about £15, and you’ll get to find out if they’ve been blacklisted or have CCJ’s against them.

Resources
List Of Tenant Credit Check Services For Landlords

4) Be wary of cash payers

Tenants may offer to pay rent upfront for a large period e.g. 6 months. While it may seem appealing and an ideal situation for a landlord, it may often be an evil ploy to disguise sinister activities.

It’s not unheard of for tenants to pay cash upfront for a few reasons, but the 2 most common I’ve heard about are:

• The tenant doesn’t want to be disturbed and wants the landlord to stay away from the property because they’re harbouring illegal activity in the property e.g. growing drugs
• The tenants have AWFUL rental history, so the offering of large some of cash is a diversion

Of course, this may not always be the case, but it’s something to be wary about.

5) Employment records

Check the tenants employment records e.g. 3 months worth of payslips. Don’t just assume the tenant is employment because he/she says so.

6) Be Wary of DSS tenants

Rightly or wrongly so, DSS Tenants are becoming more and more associated with the term “bad tenants”

DSS tenants receive Housing Benefit from the government to help with living expenses i.e. rent. A lot of DSS tenants are becoming notoriously known for pocketing their allowance, consequently failing to pass it onto their landlord.

I’m not saying every DSS tenant is guilty of this crime, because they’re not. I’m just saying, make sure you know the complications of DSS tenants before accepting one.

7) Don’t accept the first tenant that comes along to avoid costs

It’s true, the longer a property remains vacant, the more expensive it becomes for the landlord. Consequently, landlords are often inclined to accept the first tenant that comes along. While that may seem like the financially safe solution, it can often have the opposite affect. The fact is, finding a bad tenant quickly will cost you more than finding a good tenant slowly.

It’s important to take time over vetting your prospective tenants and making sure they’re right for both you and the property.

8) Don’t be afraid to say no

This can often be daunting, especially if confrontation isn’t your thing, which I can totally relate to. Over the years I’ve had to learn to be firmer in order to be sufficient at being a landlord. Some tenants just take the absolute piss, and you need to be authoritative in order to keep things in order, otherwise you’ll just get trampled over. Be firm, but fair.

If a prospective tenant shows complete interest but you’re having doubts for whatever reason, have the courage to say no. Do NOT feel obliged to accept if you do not feel comfortable.

Simply inform the interested applicant that you have several viewings booked and you intend on taking them all before you make your decision. It’s a perfectly plausible and normal situation.

On that note, do NOT under any circumstances stop looking for tenants until you have completely secured tenants, which means someone has 1) paid their deposit in full 2) paid their first month’s rent in full 3) signed contracts 4) moved into the property (point 4 should not even occur unless 1-3 have been completed).

Until all the above is fulfilled, keep on taking viewings and processing applications. Tenants frequently delay move in dates or pull out from the arrangement all together, and there’s usually little landlords can do to recoup that lost time/money.

Don’t take your tenants word or allow them to earn your trust at this stage, despite how much they assure you they are interested and intending on moving in, it means nothing until they actually move in. Absolutely NOTHING!

Minimising damage in case you get a bad tenant

Unfortunately, even if you follow each tip above, there’s still opportunity for bad tenants to slip through the net because we’re dealing with humans here, in a world where “shit happens”- even to the best of us.. That’s what they’re trained to do. In a worst case scenario, there are certain steps a landlord can take in order to minimise the damage when they’ve mistakenly harboured a bad tenant.

1) Always have a written Tenancy Agreement in place

Ensure a valid written tenancy agreement is signed before any keys are handed over to the tenant.

2) Start with a 6 month agreement

It’s always good to start with a short term agreement so you can serve notice sooner rather than later if shit hits the fan.

If the tenant proves to be well behaved after the initial 6 months, then you can easily create a new tenancy agreement and extend the terms. Alternatively, just allow the agreement roll into a Periodic Tenancy.

3) Insist on a Guarantor

Don’t agree to take on a tenant unless they can organise a guarantor. A guarantor is someone that is willing to accept responsibility for any rental payments the tenant may miss. If the tenant can’t get a guarantor, then obviously they’re not trusted…or they have no friends and family. In either case, both scenarios are repelling.

Resources
Tenant Guarantor Form

4) Landlord Rental Loss & Damage Insurance

If you’re a landlord that’s allowing complete strangers rent your property, I highly recommend getting rent guarantee and legal expenses insurance. The policies are relatively inexpensive, and could potentially save you a heap of money.

Landlord rental Insurance can cover loss in rent and legal charges. If after the initial terms of the agreement expire and your tenant proves to be well behaved, then you can terminate the policy.

5) Regular Property Inspections

Landlords are entitled to perform routine inspections of the property. Typically, a Landlord Property Inspection should be done every quarter (3 months). It’s extremely important to do this so you can get a good idea of how your tenants are treating your properly. The sooner you pick up on any suspicious behavior, the better.

There’s usually a clause in a tenancy agreement mentioning the right . Look out for that, and make sure your agreement has that clause.

Be wary though, the landlord must give their tenant 24 hours notice which the tenant must agree to before entering the property.

6) Allow funds to clear

Don’t hand over any keys or allow the tenant to enter the property until you have the deposit and first months rent cleared into your account, this especially applies for cheques.

Many professional bad tenants will hand over a cheque (which will inevitably bounce), hoping that the landlord will immediately hand over the keys in good faith (before the cheque has cleared). Rookie mistake.

As soon as a tenant has the keys and permission to enter the property, they legally become a tenant, despite whether or not the funds clear. At this point, it can take up to several months before they get removed.

https://www.propertyinvestmentproject.co.uk/blog/avoiding-professional-bad-tenants/