How to Find a Good Tenant: A Landlord’s Guide

How to find a good tenant?

How to find a good tenant is one of the biggest challenges facing landlords today. One bad tenant can lead to rent arrears, legal disputes, and thousands in lost income. With the Renters’ Rights Act making possession claims more complex, choosing the right applicant has never been more important.

The process of regaining possession of a property is becoming longer and more demanding. Landlords may now need to rely on specific legal grounds, comply with stricter notice periods, and meet higher thresholds for issues such as rent arrears. In simple terms, a poor tenant choice can quickly become an expensive problem.

At the same time, landlords must remain compliant with evolving rules around discrimination. You cannot advertise a property using phrases like “No Universal Credit” or “Benefits not accepted”. However, that does not mean you cannot carry out thorough checks. A clear, consistent referencing process remains one of the strongest forms of due diligence available.

Tenant referencing is no longer just a box-ticking exercise — it’s a key part of reducing risk, staying compliant, and protecting your property investment.

So, what should landlords actually be checking?

Start With Clear Affordability Criteria

Before arranging viewings or accepting applications, you should have a clear affordability policy in place. Keep it simple. Keep it consistent. Most importantly, apply the same rules to every applicant.

Your affordability criteria can be whatever you decide, but it must be fair and applied equally whether the applicant is employed, self-employed, studying, or receiving Universal Credit.

A common approach used across the lettings industry is based on household income compared to annual rent.

For example:

• A property rented at £1,000 per calendar month equals £12,000 annual rent
• Using a 2.5x affordability rule, the applicant would need a combined household income of £30,000 per year

That income can come from employment, benefits, pensions, self-employment, or a combination of sources. The important thing is consistency.

If applicants do not meet the affordability threshold, a guarantor may be required instead.

A typical guarantor requirement is an annual income of 3x the yearly rent. So for the same £1,000 PCM property, the guarantor would usually need an income of £36,000 per year.

Be upfront about this from the beginning. We always recommend discussing affordability before booking a viewing. It saves everyone time and avoids awkward conversations later.

Request Proof Early in the Process

Once an applicant moves forward, you should request documentation straight away.

The key documents are:

• Proof of ID
• Proof of current address
• Proof of income

This step is essential. Not optional.

Proof of ID and address helps landlords comply with anti-money laundering obligations and financial sanctions checks. It also confirms that the applicant is who they say they are.

Proof of income shows whether the applicant genuinely meets your affordability criteria.

Depending on the applicant’s situation, acceptable proof of income could include:

• Payslips
• Employment contracts
• Bank statements
• Tax returns
• Universal Credit award letters
• Pension statements

The goal here is not to make the process difficult. It’s simply about verifying the information provided.

Use a Professional Referencing Company

A third-party referencing provider can add another layer of protection.

Most referencing companies will:

• Contact previous landlords or letting agents
• Verify employment details
• Confirm income
• Check for adverse credit history
• Cross-check information provided by the applicant

This can help uncover issues that may not appear during casual conversations or viewings.

A strong reference from a previous landlord is often incredibly valuable. It gives insight into how the tenant treated the property, whether rent was paid on time, and if there were any complaints or disputes.

Don’t Forget Right to Rent Checks

In the UK, landlords and letting agents are legally required to check a tenant’s immigration status and eligibility to rent.

This falls under the Immigration Act 2014.

For British and Irish citizens, applicants may be able to prove their right to rent using two approved documents, such as:

• A UK driving licence
• A birth or adoption certificate
• A letter from an employer
• Proof of benefits
• A DBS certificate
• A letter from a school, college, or university

Some documents must be dated within the last three months, especially letters and certificates.

If the applicant is not a British or Irish citizen, they will usually need to provide a Right to Rent share code. Landlords can then verify this through the UK Government’s online checking service.

This step is a legal requirement, so make sure checks are completed and records are stored correctly.

Take a Holding Deposit 

Holding deposits are useful for reserving a property while referencing takes place.

Under current rules, the holding deposit can be no more than one week’s rent.

If the tenancy goes ahead, the deposit can normally be deducted from the tenant’s first rental payment or tenancy deposit. This should always be agreed in writing.

There are also strict rules around refunds.

A holding deposit is usually non-refundable if:

• The applicant withdraws
• The applicant provides false or misleading information

However, if the landlord decides not to proceed with the application, the holding deposit must generally be refunded.

Clear communication is key here. Set expectations early and make sure applicants understand the terms before paying anything.

Look Beyond First Impressions

A friendly viewing and a quick chat are not enough to assess whether someone will be a reliable tenant.

Good tenants come from all backgrounds. Equally, problematic tenants can sometimes appear perfect at first glance.

That’s why process matters.

A structured referencing system helps landlords make decisions based on evidence rather than assumptions. It also helps protect against claims of unfair treatment or discrimination because every applicant is assessed against the same criteria.

Final Thoughts

So, how do you find a good tenant? Finding a reliable tenant is about preparation, consistency, and proper checks.

With the legal landscape changing and possession claims becoming more complex, landlords simply cannot afford to skip due diligence anymore.

A strong referencing process will not guarantee a perfect tenancy every time. But it dramatically reduces the risk of rent arrears, disputes, and costly problems later down the line.

Want help to find a good tenants?

We help landlords source, assess, and reference applicants properly — giving you greater confidence before you hand over the keys. Schedule a call today to discuss how we can help protect your investment.

 

Other blogs that may be of interest…

Avoid these costly landlord mistakes under the Renters’ Rights Act

Are you exposed under the new landlord rules?

Renters’ Rights Act: Transitioning from Fixed Term to Periodic Tenancies