few potential tenants but who pays for credit checks?

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    few potential tenants but who pays for credit checks?

    Ok guys as title says, do i pay for this or do they.
    Also should there be any other fee to tenant prior to decision being made?

    Thanks

    #2
    Its up to you really. Some LLs charge, some knock it off the first month's rent, some cover the cost themselves. Make sure the tenants understand that if they fail the check, they do not get the charges back, but if you decide not to take them you should refund the charges.

    TBH Jonathan, I know you are new and still getting to grips with all the requirements of letting, but if you are at the stage of starting vet tenants and still asking these questions, I wonder if you know what you are doing? You should have done all your research by now. By all means ask for advice here, but it is rather worrying that you are asking something at every step, rather than doing all your homework first. Beware that tenants are often far more experienced that LLs and will be able to detect you are a newbie if you do not come across as confident in what you are doing. Read, learn and inwardly digest everything you can about letting, your obligations as a LL, the legal requirements of tenancy agreements, deposit protection, inventories, GSC, EPC, etc, otherwise you will face a very steep (and probably costly) learning curve if things go wrong, which will be readily exploited by experienced tenants!

    If you are still unsure about all this, I would advise you get an agent to atleast run your first tenancy. Agents have their faults, but if you choose wisely you can learn a lot from them and protect yourself from some of the early pitfalls and easy mistakes.

    How many tenants are you planning to vet, and what criteria have you set to help you choose if they all come back with glowing reports?

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      #3
      Hi thanks for the advice, i am planning to vet 3 tenants. I have done research, i am just picking the brains of this board from more experienced people. Half the time i know the way i am going to go, just looking for confirmation of my thoughts. I do consider myself as confident in dealing with people and was able to answer all questions tenants had for me regarding the property, deposit,costs and charges etc. i am not one to stand on side lines and let other people run things for me, i like to be involved. hence why i want to market and manage this myself. I usually work out of the uk and if this was now the case it wouold have been different and would have got anagent to fully manage, however since im working local for the remainder of this year, i thought why not.
      As for all the leagal requiremnets i am doing and fulfilling these as i go along, and finding it all a learning curve

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        #4
        If they all come back with glowing reports, i woudl look at other factors, such as childs age, previous renting history, and income. guessing at this point i would be going with a large amount of gut feel.

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          #5
          We charge a £150.00 admin fee that is non-refundable which covers the admin of the tenancy agreement and credit checks etc.

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            #6
            Originally posted by jonathan2200 View Post
            If they all come back with glowing reports, i woudl look at other factors, such as childs age, previous renting history, and income. guessing at this point i would be going with a large amount of gut feel.
            But chances are, they will all come back with 'glowing reports', as you put it. You certainly shouldn't be grading the credit check results of three applicants to decide which is 'best' - the results are just a guide, and anyway, in FinancialAdvisorSpeak, 'past behaviour is no guarantee of future performance'. Likewise, unless the applicant is a total numpty, they aren't going to nominate any referees who are going to give them a bad reference.

            So - my strategy works like this:

            1. Brief telephone interview when they contact you to screen out the obviously unsuitable applicants and timewasters.

            2. When you do the viewing, use the time to chat with them, ask questions and try to get under their skin - ie, an interview, unbeknown to them.

            3. If they then decide they want to apply for a tenancy, ie have two responses, usually depending how much I want (or not!) them as tenants: (a) "OK, great, I'm waiting until XX date to decide who to offer it to" or (b) "OK here's what happens next"

            4. Having decided who I want as a tenant (either then or later), I describe my application process, and I quickly ask them a few more questions to confirm they won't be wasting all our time by applying - stuff like bad debts/credit history/criminal record/salary level - and only then do they get a form to complete. I make it clear that they are the only person completing an application, and that if it all checks out then they'll get the property.

            5. I follow up on the application form, doing all the credit checks and obtaining references. If they've told the truth about everything so far, the actual application form and checks are nothing more than a formality to confirm this - in fact I don't think I've ever actually rejected someone who's completed my application (ie they've all checked out fine). The point is, I think your tackling it the wrong way round - ie I don't think your method of having lots of applicants filling in forms and then using the results to screen them is right.

            *EDIT* In terms of paying for credit checks... I used to cover the cost of this myself, and used this as a marketing tool to distinguish myself from what agents charge (see Woodlands Property post below!); however I cottoned on that actually it didn't make any difference at all (indeed applicants expect to pay something for this, and getting it for nothing might have made me look a bit of an amateur or fly-by-night operator. So I now charge £30, which I tell applicants (honestly) that I would refund if I had to reject them, providing they've completed the application form honestly.

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              #7
              Eric thats a great post, and makes much sense.
              I feel like 2 of the 3 i would be happy to have as tenants at this point purely going on what they said, impression they gave, i would say i spent maybe half hour showing them the house and having a general chat, and some of my questions were the same as the ones you have just stated in point 4, likewise one of the other tenants i didnt get to the point of probing more deeply as i just considered these unsuitable from very early on due to the impression / gut feel i got.

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                #8
                Originally posted by jonathan2200 View Post
                one of the other tenants i didnt get to the point of probing more deeply as i just considered these unsuitable from very early on due to the impression / gut feel i got.
                So really, not much point in having them apply; and a waste of the cost of the credit check, regardless of who pays (and a bit unfair if it's the tenant paying)?

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                  #9
                  no that was another person, like i said didnt get that far, and i was only credit checking those i felt were suitable and this couple wasnt.

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                    #10
                    "So I now charge £30, which I tell applicants (honestly) that I would refund if I had to reject them, providing they've completed the application form honestly. "
                    Think i will use this. Like u say in the scheme of things £30 is insignificant and you should be happy at this point that they will pass, based on what they have told you/ seen.

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                      #11
                      If im honest it cost me £35 to do the credit check and i paid, IMHO the check is to benefit me not the tenant so for the small amount it costs i think its only fair. Maybe im a bad businessman

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                        #12
                        I charge the exact cost (non refundable) = around £35. I only do the check if I am sure I would let to them should it come back OK. If they have not been honest about ccjs etc they deserve to lose the £35 and not get the property!
                        Unshackled by the chains of idle vanity, A modest manatee, that's me

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