One of the checks that landlords sometimes make when vetting tenants is to ask the tenant to get their bank to provide a bank reference.
These typically cost around £10.
However as my good friend Paul Shamplina (from Landlord Action) says ‘they are not worth the paper they are written on’.
Why?
Well this is because they give very little information. In fact it is true to say they hardly give any information at all.
What is much better than asking for a bank reference is to ask the tenant to provide the last three months of bank statements.
Now, these statements will tell you everything that you want to know as a landlord !
This is not an unreasonable request and if a tenant declines to provide these then I would simply say that they cannot be considered for renting the property until these are provided.
Three months bank statements will tell you a lot.
Firstly, you will be able to see how much the tenant earns each month. This means that there is no need for you to get any employer references confirming salary. From the statements you can see exactly what is going in to the back account each month and you can clearly see whether the tenant is employed or not.
Secondly, you get to see exactly what their cashflow is like! In other words you get to see exactly what their outgoings are and you can quickly assess whether they are likely to fall in to arrears.
So, as you can see the statements are free and they tell you exactly what you need to know!
Get into the habit for asking for these as they are probably the most useful piece of information you can get from a tenant.
