Tenant failed referencing & credit check - What to do!

dominoman

I am renting out my new flat, and this is the first time I have had a flat to rent out.

The first tenant that came to see it seemed like a really nice guy. Wife and two young kids. I went to see him at his current place and it was neat and tidy.

The problem is that I have just had his referencing checks back from the online agency I used and they have "failed" him. They say his income isn't enough to cover to rent consistently. His wife doesn't work.

The thing is he is a painter and decorator and told me he has more money than his accounts show because he takes some dividends too (actually I suspect he gets paid in cash sometimes too).

Do I take the risk, as I liked him in all other respects?

It's my first time doing this so would love to get your views.

AnnieO1234

Do you have a reference from a previous landlord?

To be honest, I would probably take the risk personally given his "trade", although if he is so very affluent why is he renting rather than buying? (If you're in London maybe it would make more sense?)

X

skater_kat

Don't take the risk. especially if its your first time as a LL. Plenty more tenants out there who have better credentials.

G_M

It's a judgement call. How can we advise?

Either "I do credit checks for a reason so it's stupid to ignore the results", or "Credit checks are just one of the methods I use to help me make a decision".

Bluebirdman_of_Alcathays

Ask for 6 months rent up front. If your theory about cash in hand has merit this shouldn't be a problem for him.

Kynthia

Are you buying any rental guarantee insurance that requires the tenant to have passed the credit check? If not then it's your decision, but have you looked at other potential tenants?

AdrianC

His accounts would show any "dividends" he took from the limited company. If it isn't a limited company, he can't take "dividends".

So, basically, you're considering taking a smooth-talking bs-artist who's failed the credit check. And you don't think there might ever be any smooth and credible excuses when the rent doesn't get paid in on time...?

Pixie5740

I suppose it depends what evidence the LA asked the potential tenant to provide. For example if they asked for a P60 and he pays himself a salary and dividends then the dividends wouldn't show on the P60.

You could ask him to provide copies of his recent bank statements which might give you a better idea of how he handles his finances.

xylophone

Does he have a reference from his current landlord?

MysteryMe

As already mentioned, if he runs the business as a Ltd Co dividends will show in the accounts as well as what he takes out as salary. If he is not a company then you may be right about undeclared income.

Errata

It's my first time doing this so would love to get your views.

I believe what I see when it's in black and white, anything else is just noise on the line. If he takes dividends ask him for a copy of his company accounts for last year.
Don't be suckered.