Tenant finances have improved considerably during the past few years of economic recovery. As a result, it was surprising that the latest research from Your Move and Reeds Rains revealed the number of renters in serious arrears of two months or more increased during the first quarter of 2015.
In light of this, we’ve put together some guidance for how letting agents can keep on top of this situation and reduce the chances of their tenants falling behind with their payments.
Communicate The importance of communication in the lettings sector cannot be understated. Many of the problems that arise between landlords, letting agents and tenants could be avoided through improved channels of contact.
Rent arrears are a perfect example of this. If a tenant has an active relationship with their agent and feels able to contact them effectively, the chances of them falling into serious arrears are significantly reduced. In this situation, there is a much better chance the renter will actively come forwards and let you know they are going to struggle to make their payment. This is a much more preferable scenario than being completely unaware of what’s going on until you notice the payment is missing from your bank account.
Act quickly As with most tenant problems, acting quickly can often stop a minor issue from snowballing into a major one. Once you become aware that a payment has been missed or a tenant is in financial difficulty, act immediately to try and get to the bottom of the issue. Late rent should be chased as soon as possible and ideally within no more than ten days.
If tenants are difficult to get hold of, use all of the means of contact possible, with visiting the property itself as a last resort. Acting quickly dramatically reduces the chances of months’ worth of arrears building up, which is in no one’s interests.
Getting on top of the situation early also provides ample time to consider your options and pursue legal action if it looks likely to be required.
Choose the right renters Perhaps the best way to prevent your tenants from falling into arrears is to think very carefully about the renters you take on in the first place. Every potential tenant should be submitted to a thorough screening process that includes credit checks and reference collecting.
The latter will provide confidence that the tenant has the means to pay for the property and highlight any financial problems they may have encountered in the past. Collecting references offers further assurance and gives you an impression of an individual’s personality and character, as well as their financial situation.