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How to Spot a Troublesome Tenant

Richard Jackson Alphaletz CEO Property Management Software

I’m Richard. I’m the Founder of Alphaletz & a long term Landlord.

Here are some of the best tips I’ve learnt in my 30 years within the private rented sector when it comes to spotting problem tenants.

Taking on a bad tenant can cost you...

And not just money either. Taking a troublesome tenant in can cause you sleepless nights. 

We’ve spoken to many Landlords over the years, and some have even shared how a single bad experience has pushed them towards selling up as the impact on their livelihood was just too much to bear.

Truthfully, I’ve got a few war stories myself as I’ve been a portfolio Landlord for more than 30 years collectively.

So without further ado, here’s what I’ve learnt. I hope it helps you in the long run.

Meet the Tenant

Unfortunately, if you currently use a letting agent, this part might not be so relevant, however, there’s more aces up my sleeve in store for you throughout the rest of this blog.

So, before you even bother meeting the tenant to do a viewing, make sure you qualify your prospective renter beforehand.

Have you explored the affordability of the rent versus the tenant’s current income? Do they have pets that they want to bring into the property? Will anyone else be living there?

Two people celebrating after managing to secure their property

These are all important questions you should ask before you leave the front door, as it might save you the time and potential disappointment.

To help you cover these questions, we’ve produced a simple tenant checklist that you can have for absolutely nothing.

Don't be shy. Ask questions!

If you let the property yourself, which is a lot easier than you might think, we always recommend that you perform a property viewing (either in person or even virtually) to get to know a prospective tenant a little bit first.

Letting Agent PRS or Property Ombudsman

Your relationship with your tenant should feel natural and not forced. If there’s a level of discomfort to begin with, this could quickly deteriorate and lead to larger problems down the line.

Viewings aren’t always necessary. For example, recently, I managed to let out a flat without meeting the tenant in person and by way of a Zoom call.

Ask yourself this...

  • When you did the viewing, did they turn up on time?
  • Did they come prepared and take the viewing serious?
  • Did they seem interested or did they act as if they were doing you a favour?

Free Renters Application Form

Download our free, thorough pre-tenancy application that’ll help you identify problem tenants!

You’re probably thinking I’m nit-picking, but from my experience, you can identify quite a lot of red flags in the first initial interactions with a tenant.

Consider the fact that if they fail to display a basic level of respect now, what’s it going to be like once you’ve put them in your property?

Will they treat your investment with the right level of respect?

Some questions you shouldn't ask...

  • Do you have any disabilities? If a property is available to rent it must be made equally available to able-bodied tenants and those with disabilities.
  • What church do you attend? Steer clear of religion as it could also be seen as prejudice if you turn them down, even for a completely different reason.
  • Where were you born? Also, a question which could get you into trouble. However, you can ask if they have all the necessary approvals to pass the right to rent checks.
Giving Your Garden a Makeover to Increase Property Value

Pay attention to questions your prospective tenant asks...

  • Is there electricity in the attic?

As innocent as this question may seem, it could be a pre-cursor to illegal activity, so keep this in mind.

  • Can I pay a year’s rent upfront?

As genuine as this seems, it could be that your tenant has a bad credit history and want to avoid affordability checks and so forth.

  • Know your tenant’s intentions.

Some ‘tenants’ could be Landlords looking to use your property as part of their Rent to Rent business.

Often, you’ll hear “we’re corporate tenants, looking to use your property as serviced accomodation.” Use your discretion when dealing with this and know the benefits & shortfalls before getting involved. 

Get your references first.

Make sure to dig in to the nitty gritty. Find out what a previous Landlord or even an employer has to say about the tenant you’re thinking of taking on. This will give you a different perspective and help you get an understanding of who your tenant actually is.

Ask the uncomfortable questions too. Did they ever break a tenancy agreement previously? Why? Does this match up with what the previous Landlord told you?

Letting Agent Contract

When digging into the past, it’s important to understand (if, of course, they had notices served) why they were given a notice in the first place.

Was it due to unpaid rent? Or was the Landlord not sorting out issues the tenant was raising?

What were the issues and why weren’t they being sorted? Were they unreasonable requests, or did the Landlord seem inept?

References (especially negative ones) can be pretty impactful and in most cases, speak for themselves. If everything checks out but the previous Landlord tells you to avoid, then it might be worth taking their advice!

Judge Rules on Tenant Eviction

This goes back to the time I once took a tenant to court. 

After a long period of not making timely rent payments, they ceased paying altogether. At the same time, I was getting complaints from neighbours about their behaviour too.

In the end, I got the rent paid and the tenant narrowly avoided a CCJ.

Moving forward, they’re likely to fly under the radar in terms of credit issues (unless the next Landlord calls me!) because of their eventual payment. However, there was many sleepless nights for me, a tonne of paperwork and a lot of wasted time!

Asking for references can be a lifeline. Troublesome tenants often refuse to provide them full stop as they’re already very aware of what the outcome will be. Some tenants may even drop off in fear of inevitable rejection, so luckily, you won’t have to break the bad news.

It’s important to keep good records when it comes to being a Landlord. Here’s what a good record looks like:

Good Tenant Record Keeping for Landlords

Keeping good notes and documents could be essential in the event of any dispute.

Keeping Tenant Notes

Background checks

Background checks can be a tell-all what kind of tenant you’re dealing with. They’re cheap and reveal a prospective tenant’s renting, financial and criminal history.

It’s important to note that it’s illegal to discriminate based on criminal convictions in the United Kingdom unless their conviction was for a financial crime.

Task Management System for Landlords

However, if a prospective renter has outright told you on an application that they have no criminal history, then you’ll know that they haven’t been honest with you which increases the risk of taking them on as a tenant.

A background check should be part of the credit check, but you can do some free research yourself using the internet.

As the tenancy application progresses it’s important to keep updated as you go, this will help you be responsive and professional, especially if you’re dealing with multiple applications at the same time, and often multiple properties too.

Google can be a lifeline

If there’s a chance your tenant has been convicted of a particularly serious crime, they can be found pretty promptly by entering their name into search engines similar to Google. This again ties in with revealing whether your tenant has been genuine or not, especially when applying for one of your homes.

Ask them if they have any previous aliases, names or are known by any other name.

Alphaletz Newsletter

Google is perhaps one of the most capable and free tools you have at your fingertips.

Checking an applicant’s social media profile can be very revealing and is another reason that we put this into the tenant profile page in the Alphaletz system.

We even include Facebook and LinkedIn fields for this very reason!

If a tenant tells you they don’t smoke on an application but are on Twitter with a cigar or a vape in their mouth, then the chances are they’re probably not being honest.

It’s worth checking LinkedIn too for indicators on their current working & employment history. Does it match up to what they’ve put on the application form?

Are there any indicators that the tenant can’t hold down a job which might result in them falling into arrears?  

Your gut is often right!

If you’re not feeling particularly confident that someone you’re considering taking on is going to make regular rent payments, then this could be an early warning sign.

Logically, no Landlords enjoy arrears. Especially when they start to amount up. They can put a serious squeeze on their wallets and can cause tremendous amounts of stress when trying to chase tenants.

However, if you’re still undecided but they pass all the reference and background checks, and you do decide to go ahead, then make sure you cover yourself by taking out Rent Guarantee Insurance.

Rent Protection Insurance

Rent Guarantee Insurance costs about £15 per month and even covers your legal costs up to £100,000.

Cashflow can make or break your property business, one bad tenant can cause you serious issues which could even affect the rest of your properties too, like if you’re depending on their rent to cover other bills and mortgages for example.

And if you start missing mortgage payments, this could affect your credit rating too or lead to extra bank charges for going overdrawn!

This again is why we put cashflow right on the front page of the Alphaletz system, so you know exactly where you are at all times with your rent payments including arrears.

Alphaletz Property Management Software Laptop

These may seem like obvious things to consider, but nearly every case that I hear of that involves a bad tenant can be related back to not asking the right questions or doing your checks.

Emotions don't play a part

If your tenant genuinely comes across as a friendly person but their credit search reveals that they have problems making regular payments against loans or debts, it’s best to consider the financial implications on YOU, should they fall into arrears.

Unfortunately, many Landlords have previously been stung purely because they’ve taken tenants at face value.

Distressed Man Writing on a Piece of Paper

If you can afford to grant someone a second chance (knowing the consequence and risks involved if it backfires), that’s great,

However, with rising interest rates and the cost of living playing havoc on most Landlord’s bank accounts, it’s not a risk many can afford to take.

Also, the rules have swung so far in favour of the tenant now, with even more changes proposed with the new Renters Reform Bill, that you need to be more diligent than ever. The good news is that rental demand is at an extremely high level so you should have plenty of choice to get the right fit.

Use an agent you can rely on...

If you aren’t dead set on screening tenants yourself, the best choice you could make is to delegate this stage to an agent you can rely on.

See our guide on picking the right agent here.

The majority of letting agents are experienced and seasoned veterans when it comes to interacting with tenants and can often spot trouble from a mile away.

On top of this, a large proportion of estate agents are well versed when it comes to their legal knowledge, so if you’re worried about screening tenants in a compliant manner, this is where an agent can help.

Choosing an Estate Agent

In my experience, a good agent can make or break the success of your business. A bad agent will often find bad tenants, leaving you to pick up the pieces.

However, no-one cares about your property more than you do! Validate everything they tell you. Often, the letting salesperson will be way more lenient about a prospective tenant than you might be, as they will get their commission either way.

They may also be under pressure to hit monthly sales numbers on properties rented, so they may even push you to accept a tenant that you may not feel entirely comfortable with.

If you’re having trouble with your letting agent, the good news is there’s always an opportunity to terminate your contract with them.

If it all looks good...

We recommend you still take out an extensive credit check. Don’t skimp on a cheap one that doesn’t tell you very much as you might miss key indicators of a problem tenant.

If the letting agent does it for you, get a copy and read it thoroughly!

The tenant that I mentioned above passed all the credit checks, but when I asked the agent to give me the copy of the credit report for the court hearing I saw that it said ‘accept with guarantor’.

This was the first I knew, and no guarantor was ever used. I remember the agent telling me that the husband could cover any shortfalls, but this is not a guarantor, nor were they legally bound. Quite misleading.

Communication with Landlord

Credit checks give a thorough insight into a tenant’s financial stability by providing an overview of a tenant’s payment history. This will often reveal whether the person you’re considering has a good record of timely payments made or defaults on any loans they’ve taken out.

Credit checks can also protect against fraud, as it’ll help verify the tenant’s identity.

However, you’ll need your tenant’s permission before you start performing credit searches.

Some tenants might outright refuse to have one performed, bailing out at an early stage, and saving you hassle and (potentially) large sums of money through arrears.

Don’t forget, in the UK you’re no longer allowed to charge the tenant for credit checks anymore, so the cost will be on you. Make sure all the steps leading up to this point have been covered thoroughly to avoid wasting money.

Document as much as you can!

Ensure clear lines of communication and document everything. Tenancies can go wrong very quickly, sometimes for the simplest things like a light bulb not working and the tenant expecting you to fix it.

The Alphaletz system will help you keep notes on everything from a phone call to a text message, which can be essential if you ever have a tenant dispute.

We’ve also written a tenant a welcome pack which is free for you to download.

Tenant Welcome Pack

This will help you set clear expectations and help them feel welcome when they first move in, such as where the gas and electric meters are.

We would strongly advise taking out a boiler and heating repair policy too, so that heating can be fixed very quickly in the event of a breakdown.

Policies can be bought for around £10 per month.

I once had a tenant whose boiler broke down between Christmas and New Year. We had no policy at the time, and it was virtually impossible to find an available plumber.

When we did, we had to pay twice the going rate to prioritise it and even put the tenant up in a hotel for 5 nights while it was being replaced.

Now every property I own has a boiler insurance policy in place!

Know what to look out for...

One of the main reasons why Landlord’s take on bad tenants is because they can’t correctly identify or spot the signs of potential risk.

Luckily, Alphaletz has designed a Renter’s Application Form which is also free to download. It covers all the tricky questions you might have to ask a prospective renter and can be used to make better informed decisions.

You could even send it to them to complete to avoid asking the awkward questions yourself.

As we mentioned, it’s entirely free to download. Click here to claim your copy!

Other handy tips...

  • If a tenant can only just afford the rent or it’s a real stretch, this could also lead to issues, especially if they are renting on their own.

For example, if you need to put rent up in a year’s time to cover your own increased costs, can they afford it?

This can also lead to friction between you and the tenant, or mean the tenant ends up moving out which will mean extra costs to re-rent and a potential void.

I always write into the tenancy agreements that rents will go up every year in line with inflation or the CPI index, to set an expectation up front.

Moving My Properties into a Limited Company

If I use an agent, I also agree no renewal fee and a reduced rate for the following years.

Personally, I only use agents for tenant find and rent collection, all the management I do myself, as it saves me a small fortune and I know the job has been done.

Sometimes, agents even add a commission to a bill, so watch out for this if they do manage it for you.

  • Do regular inspections and document everything.

Is the property being looked after?

Any signs of water damage such as damp, mould or leaky showers etc. if so, treat immediately to avoid larger problems and bills later!

Often damp and mould can be directly attributed to the tenant. In one of my properties, which has never had damp, the tenant reported a big mould problem.

Property Inspection

When I got round there, all the washing was hung on the radiators around the house and all the furniture was pushed right up against the wall.

No windows had been opened and it just smelt damp as soon as you walked in.

I explained the problem and followed up in writing. The damp problem duly went away, although I did end up having to redecorate a few walls with special mould resistant paint.  

If you’re unsure what to look for when performing inspections, download a free checklist here.

Free Property Inspection Checklist

We’re giving away a free inspection checklist so you know what to look for when doing inspections!

  • Rent out unfurnished if you can.

This is because, if furniture gets damaged or broken you may end up in an argument on who should pay, again causing potential friction.

The rent you receive won’t be much different for renting furnished or unfurnished. There used to be a Wear and Tear allowance that you could offset against rental income, but unfortunately that has now gone too, so the incentive to rent furnished is further diminished.

  • Choose carefully when using agents.

Check their reviews and make sure they are part of a government approved letting agency redress scheme.

These schemes allow you to lodge a complaint in the event of a dispute with an official body such as the Property Redress Scheme.

Even if you use an agent, ask for copies of all documentation including credit checks, inventories and tenancy agreements.

If your agent goes bust, or gets acquired and your contacts leave, things can change very quickly and if you don’t have the right documentation, you may not be able to get a bad tenant out. Again, Alphaletz will allow you to store all documentation in a very easy way.

I was once told my flat was being marketed and they had 15 viewings but weren’t getting any offers.

I went myself to visit the property 4 weeks later, only to find that the agent had ‘lost’ the keys.

Cartoon Man Carrying a Key

I had to call a locksmith out and when we got in, the smell was so bad that I literally took a step backwards as it was so overpowering.

The tenant had simply disappeared and just unplugged the fridge and freezer full of old food, which was now crawling with maggots and flies.

It took a professional team of cleaners 2 full days to clean up their mess, then a decorator a week to freshen the place back up!

On top of this the tenant had stolen everything they could move including the white goods and even the curtains.

The letting agent had lied about the viewings and it turned out that the tenant had a criminal record and had been in prison. They went bust shortly afterwards but luckily; I had a new agent by then!

  • And finally…

Remember to ask them when they want to move in and how long they intend to stay for. If they don’t intend to move in for another 4 weeks and your current tenant is about to move out, ask them if they can move in earlier.

Or even consider giving them 2 or 3 weeks rent free as a compromise, since the property will be empty anyway.

This way they can start moving their stuff in and they will also be responsible for the council tax and other bills while empty.

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Ask them what are the most important features that they are looking for and if they have seen any other property they like too. This will also help you gauge how keen they are and if they are the right fit. If they are looking for a garden and you’re property doesn’t have one, then keep looking for the right tenant!

If they are ready to go and you like what you hear so far, ask for a non-refundable holding deposit, based on references stacking up. On that basis, you’ll hold the property for them.

Do they have any questions for you?

Be open and honest with your tenant. This will form a good relationship moving forward.

Plus, they will appreciate that it’s a two-way relationship.

How can landlord insurance help me deal with bad tenants?

Having the right landlord insurance is crucial to avoid costly mistakes with troublesome tenants.

Here are some options to help guard against the potentially huge costs of missed rents, damage or tenant eviction legal costs;

  • Rent guarantee insurance – to ensure you have income if a tenant stops paying rent. This can also cover legal costs incurred during the eviction process.

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