First time letting - tenants say they can provide own credit detials etc

Chris_P_2

We are letting our house out for the first time. We have found some tenanats but they dont want to pay the £300 circa in credit and ref checks etc and said they can provide all the info themselves and were happy to pay a deposit of 2 months. They have their experian reports.

I asked if it was just cost and would they mind if we credit checked them (and we pay for it) and they said that was fine.

So I feel happy that they arent trying to pull something.

But what exactly should i be looking for (other than the obvious CCJs, missed payments etc)? She is self emmployed and he is changing jobs and so they will have a gurantor - who i know we will have to credit check too. Will i need to ask for her babk statements and payslips?

One of the tenants says her credit score "shows overdrafts which are student graduate accounts which are interest free and have payment plans set up each month The credit accounts are Littlewoods, which is buying products and paying them off each week without interest."
Is this ok??

Any help is gratefully appreicated

Dan-Dan

Honestly ?
You sound like at some point your going to get shafted , use a reputable local agent

Annisele

Credit checking doesn't have to cost £300. For example, these guys charge £8 plus VAT per person (NB I'm not recommending them; they just came up on a Google search).

If you're a member of a landlord's association I suspect you can get tenant checking *much* more cheaply than £300 through them.

G_M

Dan-Dan wrote: »

Honestly ?
You sound like at some point your going to get shafted , use a reputable local agent

If only it were that simple. Agents vary somuch. 'Reputable'? Defined and checked how?

Use Homelet, Letlink, Paragonadvance or similar for credit checks: £15 - £45 depending on which service.

Follow up refences yourself - not just last LL (can't wait to get rid of them?) but one before.

For guarantor,the same + employer. Home-owner? Easy to check (£4 via Land Registry ) It ain't rocket science.

Remember a guarantor agreement must be executed as a deed to be valid. And guarantor must be given copy of the tenancy before they sign the Deed.

New Landlords (information for new or prospective landlords)

Werdnal

Never take a tenant's word for anything! If you want to do the check yourself, use an online agency like "TenantVerify" and give the tenants the application form they provide to complete all the information. Then pay for a full and valid check on them. If they are joint tenants, check them both!

Contact all the references they provide in person - by phone or letter - never accept a pre-prepared letter from the tenant.

Are you aware of how to draw up a legally binding deed for the guarantor? Without this the guarantor may challenge the validity of the agreement, and get out of their obligations if you try to claim on them. You must also get a credit check on the guarantor too - otherwise how will you know they are able to afford to cover any losses on the tenancy?

You sound very naive and confused over letting a property - have you done all the research you need to? Do you understand how to do it properly?

There is a good thread here to help you get your head around it all:

http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

You must do everything you can to check out your tenants. You can never ensure 100% they are not going to cause you any trouble, but if you cut corners at the start you may only have yourself to blame if they do!

Thrugelmir

Chris_P wrote: »

One of the tenants says her credit score "shows overdrafts which are student graduate accounts which are interest free and have payment plans set up each month

Arrangements to pay already in place suggest that these tenants may well encounter financial difficulties in the future.

Your comments suggest that these individuals may well seek out novice wet behind the ears LL's. And exposure their shortcomings.

*Robin*

Chris P, from one inexperienced LL to another - please join a land-lord's association pdq! The fee is tax-deductible and will probably save you an awful lot; not just ££ but avoiding grief from chancers - which from what you've written, your prospective tenants may be.

Unless the house is difficult to let for some reason, I'd keep advertising it and wish this couple farewell and good luck in their continuing search..

G_M

*Robin* wrote: »

Chris P, from one inexperienced LL to another - please join a land-lord's association pdq! The fee is tax-deductible and will probably save you an awful lot; not just ££ but avoiding grief from chancers - which from what you've written, your prospective tenants may be.

Unless the house is difficult to let for some reason, I'd keep advertising it and wish this couple farewell and good luck in their continuing search..

That seems harsh.

Most graduates these days have overdrafts/student loans, and many people have credit with catalogues. What matters is whether they are managings these responsibly, and whether they have sufficient income to do so.

And,of course, whether they have a suitable guarantor.

I would not dismiss them out of hand.

Chris_P_2

Ok, thanks for the info. We are getting the crtedit checks and referencing done professionally now.

One more question though: When it comes to landlords renting out privately (not using an agent) - does the tenant always pay for the tenancy agreement?

jamie11

Chris_P wrote: »

One more question though: When it comes to landlords renting out privately (not using an agent) - does the tenant always pay for the tenancy agreement?

Not in my experience, the agreement is yours, you pay, then put it on your expense account at the end of the financial year.

motherofstudents

Just on the graduate overdrafts, this is very common. My kids both have these accounts and it would be mad not to make use of a FREE overdraft. They set up savings accounts so that any overdraft could be paid off completely.

In my experience you are better off without an agent but you must do everything correctly. Get this couple checked out properly, I would not dismiss them yet.