There is a lot of talk about the high rental yield of HMO properties and how good of investment they make. However, everything can go in vain if the landlord/investor makes one wrong decision, i.e., selecting the wrong tenants. It may result in damage to the property, costly eviction, and even non-payment of the rent. In any case, no landlord wants to get in such trouble.
Considering this serious problem, these steps will help landlords to check the tenant’s rental history properly. It is extremely important, especially when you let an HMO property, where three or more tenants live together. One wrong selection can make it difficult for others to live peacefully.
What Is HMO Tenant’s Rental History?
It is not enough to check a renter’s credit history. A rental history contains the detail about all previous addresses of property and contacts of landlords a tenant has rented. However, some renters do not have these records, such as millennials, students, or first-time renters.
It does not mean that they will not make good tenants, or you should reject their application. You need to meet them in person, check their employment proof, and pay stubs.
How To Verify Rental History?
According to HMO Property Designs, screening and selecting appropriate tenants is a crucial step, which no landlord should ignore. It can either make or break your profit chain. Here are some steps you need to follow:
1. Understanding Your Requirement
Before you start the process of shortlisting the potential tenants for your HMO property, understand what you want. If you are looking for students and young tenants, they might not have a rental history. But if you want professional tenants, decide what type of tenants your will prefer.
Somebody who paid timely rent, has no criminal history, and didn’t break the previous rental lease maybe a good tenant. Be clear of what your requirements are and be realistic in setting them. It will not only help you when reviewing the applications but also help in listing your property.
2. Inform Tenants To Provide Rental History Information
You need to inform tenants to provide a previous record of their rental history. Only then they will move to the next step of the process. It is good to ask for detail about the previous three landlords, along with their addresses and contact numbers.
By asking this information will save your time and help to make the process of selection easier. Also, make sure to attach a rental information lease form to the application form. It is a legal document that will allow a landlord to check a tenant’s previous rental record.
3. Review Rental Application
Now it is time to review the rental application, and you need to shortlist some potential tenants for your property. Firstly, pay attention to any omitted information; these may include a missing street number or contact number of the previous landlord.
Secondly, check if there is any break in his/her tenancy record. Later, you can ask about these details from your tenant and see if they have a reasonable justification for your questions.
4. Conduct Reference Check
Do not ignore this step and hassle to rent out the property. Just make calls to previous landlords, 15 minutes each, and ask reference check questions. It may include asking about their behavior as tenants and with other tenants, timely payment of rent, relationships with neighbors, cleanliness, and deposit detail.
You may think of it as a lengthy process but trust us; it will save you from future trouble. You can shortlist a reliable and responsible tenant through a proper reference check.
5. Conduct Eviction History Check
Along with other steps, it is also important to check eviction history or tenant reports. This document contains all detail a landlord may require for selecting a tenant. It is a detailed interview with the previous landlord, also from the neighbors.
Getting eviction history helps you cross-verify all the information you have already gathered. Nothing is relaxing than be sure of letting property to the right tenants. Now it all comes down to your preference and choice. You have all the information; make your call, and get your rental agreement signed.
It is important to verify potential tenants’ rental history to make an accurate decision for letting an HMO property. Therefore, it is important not to hassle with the decision, take your time, and do your research to be sure of your decision.