The buy to let boom of just a few years ago put many people in to the bracket of Landlord for the first time, property prices rising along with increases in standards of living and dilemmas over pensions meant an increased level of people turning to property as a long term investment and what better way to get an instant return on your investment than to rent it out. This situation continued until around March 2008, this was the turning point and the beginning of what has become known as the credit crunch.
The credit crunch has caused major problems for landlords, 2009 as seen a massive increase in the amount of people who can no longer afford their rent due to loss of work and are unfortunately seeing as absconding as the only way out.
Tracing tenants can be a long process especially if the landlord has not obtained enough information about the tenant to make tracing them possible.
There are many things that you can do to avoid this situation although most of these are admittedly pro active to be done before the tenant moves in, the most important ones are
- Making sure your tenant signs a contact – don’t be afraid to put in the contract that you will take further action and use their information to trace them and collect any outstanding rent.
- Try and get a guarantor for the tenant who will guarantee that rent is paid in the event that the tenant cannot pay. Again you must put in the contract that you will use their own information against them in the event that they do not pay.
- Try and obtain references for the tenant, a tenant who cannot produce references is best left alone.
- Make sure you get as much information as possible including their work details, although the loss of their job might be the cause of the rent arrears, it maybe that they still work there on reduced hours.
- If they are younger people try and obtain parents address, this is cynical but younger people who can’t afford to live alone tend to return to the family home.
- Ask for a date of birth, mobile numbers, previous address and middle name
- Ask the tenant to credit score the tenant, you can do this to see what their credit rating is, also inform the tenant that you will use credit information to locate them, you need them to sign in agreement of this so it must be in the contract.
All these things will not make the tenant more likely to pay but in the event that they do stop paying they will arm a trace company with the necessary information to successfully locate your tenant.
If you can give all this information to the trace company your chances of finding a current upto date address for your tenant is high, around 90%. If you only have limited information this is reduced to no more than 20%, if they have a common name it is even lower.
Most trace companies work on a no find no fee basis so if they don’t find the information you are looking for then you don’t pay, you should not have to pay any money upfront. It is worth pointing out that it does take time for information about the tenant to appear on trace databases so it is worth using a company that has trained staff to investigate the matter fully rather than system only tracing, unfortunately the cost of the trace has little to do with the quality so try to speak to the company in question to see what they do.
on Mon, Mar 22, 2010