Are you a landlord who is lost on how to find a tenant? Perhaps you are not sure where to start or you have found a tenant but are not sure if they’re the right one. In this article, we will be going over the correct tenancy referencing so you can find a low-risk tenant and don’t just settle for the first tenant you find.
On top of this, there are a few industry terms you should be aware of such as knowing if your property is run by block management, what the notice periods you must give to a tenant are and what property maintenance services you must do after you have found a tenant.
All a landlord must know to find excellent tenants
All landlords will find a different style of tenant management as they go through their property journey. Nonetheless, there are some things that all landlords can benefit from if they implement this in their method of finding a tenant.
In addition, there are certain industry norms when it comes to tenant referencing and there are also certain rules that property managers will follow as they manage these tenants after they have been found. The process of finding a tenant can be done by a letting agent, property manager or a landlord that operates without an agent.
Below are some tips for landlords so you don’t have to spend money on letting or property management courses and can be confident you are making a good decision as you find a tenant.
Using a letting agent
Letting agents are experts in tenant referencing and tenant outreach to find a tenant. They are beneficial for landlords because they find tenants without a landlord having to do any work, giving them more time to do other things like growing a property portfolio or taking care of their personal life as some landlords have other things to do outside of taking care of their property investments and finding tenants.
You may also find a letting agent with management fees who will also conduct ppm which will deal with property manager related activities like making sure there is a valid electronic safety certificate and if the energy performance certificate is up to date.
What is the cost of using an agent?
In order to make a profit for the services a letting agent provides, some will charge a flat fee and some will charge a commission on the rent to find a tenant. For example, it is common for letting agents to charge a fee of around £200 for finding a single tenant.
If there is a letting agent who wants to find a tenant and charge for the management of tenants too, this is where pricing structures are more likely to resemble a charge from the commission of the rent.
In cases like this, it is common to find letting agents who will charge around 10% of the rental income of a property every month for the properties they manage as well as an additional to find a tenant. This is arguably where the letting agent business is the most lucrative as they can have more predictable income that is based more on predictable cash flow rather than relying on tenant vacancies.
How to use online letting agents
Online letting agents are agents that aren’t necessarily specialists in the local area and instead use their reach to compile a large database of prospective tenants so when a landlord needs to let their property, they can appeal to the landlord straight away with the relationships they have already built in order to find a tenant.
It is worth noting that most letting agents will have their own website anyway in order to find a tenant as it is useful to leverage the internet even if a letting agent is only based in a small local area.
In order to use one, compare fees, give them your details and then they will usually reach out to the landlord either online or on the phone with further details. Whether there are tenants available to move into a property will depend on the company and the requirements of the landlord.
Some letting agents will charge a small fee just to add the landlord to their database of tenants too.
Landlords may also find they get better results to find a tenant by reaching out to more niche landlords. For example, a landlord that is looking for students in their accommodation may find it useful to reach out to an online letting agent who has a large database of students who are looking to become tenants.
On the other hand, a landlord who is trying to find a tenant for an extremely lucrative property perhaps in an expensive area of London like Chelsea for example will need to find a letting agent who has a lot of high profile clients who can afford this type of rent.
How you can get away without a letting agent
Letting agents are there for those who want to simplify the process to find a tenant. Finding low-risk and reliable tenant for a property is in the landlord’s best interest as it can be extremely difficult to deal with troublesome tenants.
In the worst cases, you may have to charge them tenant fees or potentially evict a tenant by serving them a notice to quit. This can involve a lot of effort and also cost a landlord, especially if they don’t have things like landlord insurance or home insurance set up as part of their property business to help cover costs like this.
If you are willing to put in the time, with the right knowledge you may be able to do just fine without hiring a letting agent. Particularly if you are new to being a landlord and don’t have many properties to manage. This way it is easy to just focus on one or two tenants perhaps in the early stages where you are just working out how to buy a second home for an investment.
Friends and family
Tapping into a local network you may have built up is a great way to make sure you are able to find a tenant. At the end of the day, every transaction in a property business is just someone doing business with someone else. As a result, there is a good chance that close friends of a family members may know someone who is looking for a room to help you find a tenant.
A good way to start doing this is to tell everyone about your property journey and make them aware that you are always looking for tenants. Even if the property eventually gets filled, it is better to find a tenant again than not have a tenant to begin with. At least this way you can refer them to another property or a landlord you trust.
Finally, finding a tenant through a family member can be a good way to develop some level of trust outside of tenancy referencing. However, it is still a good idea to take a look at the tenant’s finances and credit check before you bring them in as this will have a big impact on how risky the tenant is to stop paying rent.
As long as the tenant is signed with an assured tenancy, it doesn’t matter if the tenant is a family member, they will still be entitled to the same eviction laws.
Local newspapers and magazines
In the 21st century, some say that physical advertising like newspapers and magazines is becoming less effective as less people read newspapers and they have other means of gaining information like using the internet.
This is most certainly the case, however, this is still a legitimate place to advertise a room, especially if you are targeting an older demographic. Some newspapers that are local to an area are especially cheap to advertise on and can be an additional way to reach those who perhaps aren’t a fan of online letting agents.
Most letting agents have their own social media profiles. On top of this, a landlord can leverage their own social media presence to advertise a room for sale. Especially if they know a lot of their following is from the same area where the property is.
Alternatively, it may also be a wise idea to use advertising that specifically targets a certain demographic or location by using the advanced targeting features of a platform. As an example, Facebook Ads Manager you can sign up to here allows you to target anyone with an interest in renting or perhaps someone who has visited a letting agent company like Zoopla in recent months.
Otherwise, there are a series of platforms to advertise on including:
There are also social media channels specific to the country that you are trying to find tenants from. For example, if there is student accommodation available that needs to find international students who are moving into university in the new academic year, using social media channels specific to the country where students are travelling from internationally would be a good idea. Examples include:
- Red (Chinese demographic)
- Moj (Indian demographic)
Property listing platforms also known as property portals are a great way to list a property for rent and see if there are any tenants who will see your ad on this network and enquire about a property. Some of the most popular examples are:
How to negotiate with tenants
Finding a tenant and then negotiating with a tenant must be done without seeming argumentative but instead approaching it as an attempt to come to a solution that is best for both parties. Remain open and honest and don’t be afraid to walk away from a tenant if you don’t think you are entering a good deal.
Finally, make sure you emphasise the benefits of the property to a tenant specific to their needs. For example, if you have a tenant who is new to renting and likes the outdoors, show off the outdoor recreational space in the area alongside the fact that the rent is cheap and tailored to someone first looking to rent. This can help a tenant visualise themself in a property.
What paperwork do you need when you find a tenant?
The main thing you can think of when you first consider signing a tenant is producing a tenancy agreement. This is important in the process that can be simplified through our property management software. Upon sign up, you will be provided with a free tenancy agreement template.
Other documents include the safety certificates for the property, information regarding a tenant’s deposit and also the how-to rent guide which must be provided at the start of a tenancy under the law in order to ever fairly evict a tenant.
If you attempt to find a tenant without the help of any professionals, be prepared to spend some money on property management courses and don’t be afraid to use a property management company if you think you can’t manage. Accidentally having legal issues due to being incompetent at management when you thought you knew what you were doing as a landlord should be avoided.
When a landlord tries to find a tenant, working out the right method to get one is harder than it initially seems with the right help. Either way, a landlord must seriously consider how to find a tenant whether that be through their own work or through hiring a letting agent.
Once a tenant is found, it is also vital that landlords know how to sign a tenant legally and manage the tenancy professionally in order to keep good tenants for a long time.