Low risk letting is everyone’s aim, but unless legitimate guidelines are followed it’s difficult to know if a tenant will prove reliable.
Without undertaking thorough tenant screening, landlords risk significant loss of income and damage to their property – along with the stress that comes with trying to sort out any problems.
While this has always been the case, much has changed in recent years. What was once an industry that thrived on personal relationships, trust and local expertise, is almost unrecognisable today with the rise of technology and applicants with an increasingly diverse profile.
We all know that the responsibilities attached to letting a property have also become increasingly complicated by legislation and compliance.
At this current time Right to Rent still remains the landlord/agent’s responsibility and part of everyday checking procedures, along with money laundering regulations, identifying fraudulent applications and documents, and complying with legal obligations.
As tenant referencing plays such an important part in the lettings process, the relationship between landlord and agent is something we should all value. Being able to call on the expertise of a skilled and knowledgeable agent is worth a great deal to the majority of landlords in search of a trustworthy tenant.
Concerns about what happens after the fees ban becomes law are understandable. There is a genuine worry about how to offset potential losses once the responsibility for paying for referencing passes from tenant to landlord/agent.
However difficult the prospect, the need to reference applicants and the associated risks remain the same after June 1.
At Rent4sure we reference around 30,000 applicants every month on behalf of thousands of agents across England and Wales. So yes, I have a huge stake in ensuring there’s a smooth transition process in place. My advice to agents who are concerned is - plan and prepare. There’s still time and it’s not too late.
Resist the pressure to make short-term decisions. Quick fixes such as reducing the number of applicants referenced, or downsizing to an economy product, are not the best solution.
Corners can be cut in any number of ways, but if you don’t get it right at this stage then you could be heading for problems further down the line - with the gamble that your referencing is no longer robust enough to withstand potential challenges, leading to a breakdown in the trust between you and your landlords.
Landlords rely on their agents to get it right, and to protect them from any long, costly eviction process. Cutting back on referencing, or trying to do it yourself, may well end up being a false economy that could damage your reputation and brand in the longer term.
The vast majority of agents rely on third-party referencing companies for a good reason. It’s an in-depth process, and employing the services of a reputable supplier will save time and effort and provide an easy to understand report once all the checks are completed.
Being able to rely on the services of a specialist referencing company can provide peace of mind, as it leaves nothing to chance. Life after the ban does not have to mean a drop in the standard of referencing or service provided.
Some landlords may well choose to increase rents to balance the costs of maintaining services, but for others that route will not be sustainable.
Finding additional sources of revenue to protect and secure the future of your business is another way forward. Providing that these income streams are reliable and valid, this should help offset the drop in income.
There are a number of choices out there, with incentivising rebates and appropriate insurance products being two of the most obvious options. With so many new products coming to the market at this time, it can be tricky to assess what will actually work for your best interests in the longer term.
The fees ban has created an opportunity and, as always, we shouldn’t necessarily take everything at face value. If something looks too good to be true, it probably is.
With a lot to consider, the key is to take a positive, active approach and talk to established suppliers who have the experience and expertise, and realistic schemes in place, to help you add value to your business. Don’t be lured in by rock bottom prices. You want value for money but need quality and expertise.
Deciding to switch suppliers or take on a new partner can be daunting and take time but it’s important to do your research and have those conversations, even if there are awkward or searching questions to ask. It’s the only way you can evaluate who will be the best fit for you.
Check that the strategies they have in place will work for you and your customers, and that they can also give you the all-round daily support and service you require.
Look at their system and IT. Technology that works, that’s smart and seamless, plays an essential role in ensuring you have the speedy, accurate services you need and rely on. Ask for a trial, get them to demonstrate.
A good partner is one who looks at the bigger picture and is committed to investing the expertise, time and resources into making the ban a collaborative opportunity that focuses on long term successful outcomes, rather than a piecemeal approach that could leave you trailing behind your competitors.
*Luke Burton is Chief Operating Officer for Rent4sure and has many years experience of working in the lettings industry.
Several exciting new product releases and innovations have been designed specifically to help customers overcome the challenges presented by the ban. To find out more, contact Rent4sure today on 0330 088 3774 or click here.