How Do You Spot A Great Tenant Post COVID?
What makes a great tenant? Is it the type of job they have - doctor versus delivery driver, civil servant versus stay at home mum? Their household make up - single versus family? Or could it be their credit history - debt free versus leveraged, clear history or a chequered past? What exactly are the characteristics that make up great tenants? Husmus spent a year investigating and the results may just surprise you.
Between 2016 and 2018, it was recorded that 20% of England’s household population rented their home from a private landlord. With more families and individuals renting year on year, conversations around what makes a great tenant grow increasingly relevant.
For landlords, finding the right people to occupy their rental homes is obviously a priority. These homes don’t come cheap and neither do mortgages, upkeep and renovation costs. With less than 7% of landlords being career landlords, it’s understandable why most are unwilling to take risks with who they choose to rent to.
If you search the web for advice, most blogs and landlord tips place good credit history at the top of the list. As well as ranking highly in this ambiguous scoring system, other redeeming factors include permanent employment, decent salaries and no criminal record.
But are these factors really the most important? Will they lead to a more successful tenant/landlord partnership?
Are credit histories still relevant?
For decades, landlords have been encouraged to focus on credit histories and the presence of permanent jobs. But consider this, if those methods are foolproof, why do any referenced tenants fall into difficulties?
Raise your hand if you know a landlord that's negotiated away a nightmare tenant without bothering to go to court. The great Paul Shamplina of the TV show Nightmare Tenants Slum Landlords advocates this approach. While this method works great for landlords in difficulty, it renders credit histories useless in identifying high risk tenants.
Pre-pandemic, over 1.1 million UK residents had CCJs and bankruptcies. We'd hate to guess how many that will be post pandemic once companies start turning the screws on arrears. Ben Beadle, CEO of the NRLA has also highlighted this problem. Moreover, credit reports that are available to landlords do not state, for privacy reasons, who debts are to or how they were accrued. Simply put, where there is bad behaviour, it is known only by the landlord and tenant involved. Plus, young renters who are new to the rental market rarely have a credit score at all, never mind a favourable one.
Landlords need to accept that not only is this once paramount metric no longer useful but moving forward it might be a barrier to finding any type of tenant at all.
The Shifting Roles of Job Types
The UK's demographics are changing. Permanent 9 to 5 jobs are no longer the norm, especially among the under 45 age bracket who are now the majority of tenants.
Over 998,000 workers (almost all renters) rely on zero hour contracts to make a living, and as at 2021 there were 4.2 million self employed workers in the country with that number rising further since. Even highly qualified key workers like doctors, nurses and HGV drivers are often classed as self employed because a number of them work on a contract basis.
With that in mind, does being a temp worker or self-employed really make a tenant any less reliable or worthy of a home? Is asking for 6 months of rent to be paid in advance realistic when the average UK resident has less than £600 in savings?
The world has changed since tenant selection processes were first introduced, is it time the industry changed?
At Husmus, we offer a new approach. Read on to explore what makes a great tenant, how Husmus makes finding them possible, and how this new system can benefit landlords and renters.
Husmus Offer A Behaviour-Focused Approach
The characteristics landlords do and should appreciate can be neatly summarised under one umbrella: tenant behaviour. When you’ve got someone living in your property, the importance of credit scores and salaries quickly become irrelevant.
Instead, landlords appreciate:
Rent being paid on time
Cleanliness and good hygiene
Excellent communication at all times
Respect of decor and furnishings
Consideration for neighbours or community
The Results We’ve Experienced So Far
At Husmus, we’re leading the way in adopting a combined behaviour and risk-focused approach that focuses on how tenants actually behave while living in a rental home. It’s been successfully used with over 3,000 tenants. More than a year since launching, only 0.02% of those tenants have ‘behaved badly’ i.e. defaulted on their rent or destroyed property.
Proving that a behaviour-based model works has also highlighted critical problems in the current system. 22% of tenants who achieved high ratings through Husmus are from marginalised groups with poor credit history and temporary jobs. Had they tried to rent through the traditional landlord selection process, they would have been rejected or asked to pay large sums of rent in advance.
Assessing renters on their behaviour and rental history is a much more effective way of giving them access to homes while simultaneously finding the best tenants for landlords.
The Benefits of the Husmus Way
It’s Inclusive of Modern Life
The world has changed since tenant selection processes were first introduced. In modern society, people make money in various ways and enjoy a whole host of different lifestyles. Husmus makes renting possible for people from all walks of life.
It Protects Landlords and their Tenants
As well as making renting more inclusive and less discriminatory, Husmus also provides unrivalled financial protection for landlords and their tenants. Our services consider all of the risks, and even offer insurance to cover them. Our customers may choose from rent guarantee to people & pet damage, and rent deposit cover. We are so confident in our approach that we take on the financial risks so that tenants and landlords can work together without conflict.
It’s Convenient
The thing our customers enjoy most about Husmus is the simplicity. Our services are available online on any device, 24/7, so you are never far away from the help you need. Our AI assistant even gives you handy tips to keep you compliant and automates the admin so you can get rent stress-free.
So, that’s everything you need to know about what makes a great tenant and the Husmus way.
If you’re interested in experiencing it for yourself, can sign up for our free postcards – a peer-to-peer network of landlords sharing tenant references. You will also get access to our spring newsletter which includes a comprehensive guide on how to achieve these results on your own.