How to Find a Tenant – a Guide for Landlords

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With mounting pressure on landlords’ finances, including the scrapping of mortgage interest relief under Section 24 and increased stamp duty rates, landlords need to be looking for ways to find tenants quickly and save money.
The most traditional way to find tenants is by using a high street letting agent. But beware, with the current climate especially, this could really eat into your profit margins. One off charges for tenant find services are several hundred pounds (ranging from around £250 for a basic advertising package to around £800 for a full advertising package) plus renewal fees of around £100. And for a management service you can expect to pay a monthly commission between 6% and 17%. For a property that takes a monthly rental income of £1000 a month with a 10% commission fee and a £100 renewal fee, you’ve already paid out £1440.
Online agents
Making the switch to becoming self-managing can be daunting, but with the potential savings clear to see- you should make it a serious consideration. Using classified ads, social media or word of mouth will save you thousands as a landlord, giving you more profit.
High-street agents use the largest UK’s lettings sites- Rightmove and Zoopla, to advertise your property. Why pay through the nose for this service when there’s a middle ground? By using an online agent, you pay a fixed up front cost to find tenants with no monthly commission and no renewal fees. If you opt for a full service from an online agent, you could save over £1000 in fees (based on the above example).
Online agents can give landlords the flexibility to choose the services they need and want, further reducing unwanted fees. But there is a downside, many do not offer viewings services, which means you’ll need to be able to attend or arrange these yourself.
To find out exactly how much you pay in current agency fees, and how much you could save by switching to an online agent, use this free calculator.
Before you even think about getting your ad online, you need to first think of how you present your property. Make sure your property is presented in an appealing way that will attract the highest calibre of tenants. A lick of paint and freshening up the rooms will give you the edge over competitors.
Consider ‘dressing’ your property for photos and viewings to maximize tenant interest- tenants are looking for a lifestyle, not just a property. And research shows dressing a property can increase tenant enquiries by 75%. But most importantly, make sure the property is clean and tidy for photos and viewings- you can’t expect a find a good tenant who will look after your property if you don’t set this expectation from the outset.
Doing your research and setting the right price is one of the most important aspects, because a property ad will just end up sitting on Rightmove and Zoopla with no enquiries if you’ve priced it too highly. Look on Rightmove and Zoopla in the property area first to see what the average asking prices are. Consider setting up a Property Alert so you receive the details of new properties coming onto the market. Be comparative in terms of space, quality and location but also be realistic! If you’ve set what you believe to be an achievable asking price but no one is biting, you’re going to have to reduce the price. Be aware of market conditions too; where supply exceeds demand, property rent prices will fall.
Advertising online
With 92% of tenants searching online for their next property, you can no longer rely on the right price and good location- presentation is everything, just as when you prepared your property for rent. Invest in professional photos and write a killer description that will grab tenants’ attention. With renting property moving online, you need to become a ‘digital marketeer and work out how to compete with potentially 100’s of others of properties in your property area.
Be flexible
Don’t go in with set expectations about your perfect tenant or ideal rent price. You will need to react to the market quickly and appropriately- don’t hold back from making changes to your online ad or reducing the price if you aren’t getting those all-important enquiries. Rely on your ‘gut feel’ when you meet tenants, rather than outright rejecting those with pets or in receipt of housing benefit- you’ll open your property up to a lot more tenants if you are flexible on terms.
Unless you’ve employed the services of a letting agent to carry out viewings for you, this will be one of the most important stages of finding a tenant. Meeting a tenant face-to-face gives you the chance to start a professional relationship and get that gut feel if they are right for the property, and vice versa. Consider setting up block viewings if you’re pushed for time, arranging for several applicants to view the property over a few hours on one day. If you can hold a few viewings separately, make sure to ask plenty of questions beforehand before inviting them to view- you don’t want to find out they’re not suitable at a viewing.
Another key part of finding tenants, you need to carry out background checks to make sure an applicant is suitable. Referencing will check whether they can afford the property, their credit history for CCJ’s or debt, an employment check and a previous landlord check. Referencing can help further by allowing you to take out rent protection insurance, which means a missed rent payment or having to go down the route of eviction at a later stage in the tenancy won’t leave you out of pocket.
Make sure your tenancy is watertight with the all-important tenancy agreement and by complying with your legal obligations. A tenancy agreement will lay out all the terms of the tenancy plus any added extras agreed between you and the tenant. At this stage, you’ll also need to ensure you’ve complied with your legal landlord duties including protecting the deposit and serving the prescribed information, giving a copy of the EPC (Energy Performance Certificate), carrying out a gas safety check and providing the certificate, serving the ‘How to Rent’ guide from and ensuring you’ve carried out Right to Rent checks.
Finding a tenant doesn’t need to be difficult or costly if you do your research, present your property right and make sure you’ve carried out thorough checks.
If you are unsure which online letting agent to use, you should consider this year’s ESTAS award winner for ‘Best Online Agent’, Upad. We encourage you to check out Upad’s reviews on TrustPilot or contact their property experts with questions on any of the tips outlined in this article.
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