Landlords frequently hear about the importance of robust tenant checks but are they checking the guarantor is being checked out too? Probably not.
References must be taken out on tenants’ guarantors too otherwise there is no point in having a guarantor.
With the start of the academic year just around the corner Legal 4 Landlords is encouraging landlords to take extra care.
The student market is a lucrative business with yields considerably higher than the residential investment market, but only if the rent gets paid.
In the UK, total returns for student property across England and Wales were 13.5 per cent in the year to December 2010.
The current student rent for a room is £325 per month, averaging at £100 per week over a 39 week term, according to Homesforstudents.co.uk. On average four students are looking for every room.
Guarantors, often a parent or guardian, are there to ensure rent is paid on time and in full, but what if the guarantor turns out not to be in a position to pay, or worse still, they don’t exist? Check your tenant check provider is also checking the guarantor’s ID. This needs to be more than just an email address as anyone can set up a hotmail account. Referencing needs to be thorough, taking things on face value could be the biggest mistake you make.
Careful tenant checks is not just a concern for landlords renting to the student market either. More people are renting than ever before. For some it’s their first time and they may not have rental history to base a reference on. In these cases, the more background research, the better, to weed out the bad tenants. It’s worth digging around at the start rather than unearthing problems at a later date.
Remember, once you’ve obtained satisfactory references for both the tenant and the guarantor protect yourself with rent guarantee and landlords insurance. By doing a little paperwork at the beginning you can avoid a lot of paperwork should payment problems arise.