How long does tenant referencing take?

In property management, one of the most crucial steps for landlords and property owners is tenant referencing. This process isn’t merely about filling vacancies; it’s a strategic measure to mitigate risks and ensure a harmonious and secure environment for all parties involved.

It’s important to select a provider that will deliver timely results, but in an economically uncertain climate and a highly competitive market, it can be tempting to look for ways to rush through the referencing process. Although referencing might add time to the leasing process, it’s a necessary step that should be handled thoroughly.

In this post we explore what tenant referencing is, how long it can take and why you should be wary of referencing providers offering “instant results.”

Why is tenant referencing important?

Tenant referencing is a fundamental step in property management, serving as a proactive measure to safeguard investments and ensure a secure environment for all occupants. Here’s why it’s indispensable:

Minimising financial risks – Thorough referencing reduces the chances of non-payment and late payments by assessing applicants’ financial stability, credit history and rental track record.

Mitigating legal risk – Eviction proceedings and legal entanglements are both costly and time-consuming for property managers and can hurt a community’s reputation. Referencing helps identify quality candidates and filter out fraudsters.

Fostering community safety – In residential buildings containing multiple units, such as apartments and blocks of flats, referencing ensures a safe environment for all, including both tenants and leasing staff alike.

Promoting long-term stability – Finding reliable tenants through referencing reduces turnover rates, fosters adherence to lease agreements and helps ensure a steady cashflow.

For landlords, knowing that the people leasing their properties are trustworthy provides peace of mind in the long run and ensures a more successful community and a smooth-running relationship for both landlord and tenant.

What to check for tenant referencing

Tenant referencing is a crucial step in the lead to lease process, ensuring that landlords are given a clear picture as to which prospects are qualified for their property. In order to align with tenant screening best practices, it’s important to have a reliable provider that will thoroughly and responsibly evaluate each applicant. Below are just a few factors that your referencing provider might assess.

Employment history

It is important to confirm that the prospect is who they say they are and that they are gainfully employed. Conferring with a system of record at an applicant’s listed employer can help confirm that the applicant works there and that the employer can attest to the prospect’s identity. Additionally, a thorough referencing provider may speak directly with the employer if technical or other issues arise in the employment referencing process. This direct confirmation helps establish stability and reliability, enhancing the referencing process.

Rental history

A tenant referencing provider will also look into a prospect’s rental history. More specifically, the provider will be looking for any history of evictions. An eviction does not immediately disqualify a prospect, but it is one of the factors considered in the referencing process. By validating rental history, lining it up alongside other factors like employment and income and adhering to UK housing laws, referencing providers offer landlords a glimpse into whether a tenant may be qualified for their property.

Background checks

In the tenant referencing process, conducting comprehensive background checks is essential for creating a safe and successful property. These background checks can include:

1. Credit reports and scores: Having a human-supported referencing process that looks at credit reports can offer insights into financial responsibility and payment history, helping a property assess the applicant’s ability to manage financial obligations.
2. Eviction-related reports: Accessing eviction records provides context on past rental disputes or evictions.
3. Criminal history: When your referencing providers examines criminal records, the provider enables landlords to better ensure the safety of tenants and leasing staff.

Income

In the tenant referencing process, it is crucial to verify that the applicant has a steady source of income. When verifying an applicant’s income, referencing providers can go to the source of record (bank statements, pay slips, etc.) to filter out fraudulent applicants before they even step onsite.

How long does tenant referencing take?

The duration of tenant referencing can vary depending on several factors, typically spanning from two to three days.

What factors affect how long a tenant referencing takes?

1. Type and extent of background checks: The complexity of background checks, such as credit reports or criminal history enquiries affects referencing duration.
2. Complexity of the referencing process: More extensive referencing involving multiple sources and in-depth analysis require additional time for data collection and evaluation.
3. Availability of information: The accessibility of data from credit bureaus, employers and previous landlords influences referencing speed.
4. Responsiveness of the tenant: Timely provision of required information and prompt response to enquiries by tenants expedite the referencing process, reducing delays.

Are there ways to speed up tenant referencing?

Yes, but just because you can does not mean you should.

Considering these factors already discussed, it may be tempting when choosing a referencing provider to prioritise one that offers “fast” and “instant” referencing results. However, automated referencing tools that promise instant results can create liability for your property and open your business up to legal risk.

The right referencing provider should provide streamlined, efficient tenant referencing that doesn’t cut corners on thorough verification.

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