Hi,
do Openrents referencing service and AST service cater for the above.
Before starting referencing would be useful to know.
How should I be asking for proof of funds(12 months) before passing to Openrent.
Not had to do this before.
Thank you.
Referencing will assess affordability for the monthly rent amount. It will not assess affordability for any deposit / rent in advance arrangements. If you wish to check these, you should do so yourself, before agreeing to a Rent Now aplication from the tenant.
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and the reason it does this is because you need to know whether the Ts can afford to pay rent on a monthly basis. If they can’t, then when the 12 months are up, you’re stuck with Ts in arrears.
Have you not asked for 6 months of statements off them - including any savings accounts which might have the funds in them?
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Its slightly convoluted, the funds would come from family, they have also offered to be guarantors, however I felt it was better to do 12 months up front. Its also seems that Openrent can only take a max of 12k in advance, London annual rent is much higher than this so its causing issues with the AST. Should I revert back to have a guarantor and monthly rent?
I should add, they do have an income, but below the affordability.
If they can’t afford it, I wouldn’t offer it to them. You’re effectively going with a guarantor right from the start if you take the 12 months up front. The actual tenants are paying zero and have negative affordability and that does not bode well for the future.
For future ref, if applicants tell you that they have enough income to afford the rent payments (i.e. 2.5xpcm) then, before you do any referencing, ask to see six months of statements for each tenant’s personal and savings accounts. That will give you an idea of how they manage money which is absolutely key here. It’ll show you whether they can stay in the black, flag outstanding loan payments and/or whether they’re receiving cash dumps from the bank of mum and dad to top them up. All of these are red flags and will save you the cost of referencing if you spot them.
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