It not unusual to find a tenant who is self-employed these days: in recent years there has been a rise in the number of people working for themselves or setting up their own businesses. Self-employed tenants offer a particular challenge to landlords because it’s harder to reference them but that’s no reason to dismiss them out of hand. Indeed, many self-employed people work as contractors and they can be high earners.
In a lot of ways, you can actually get a great deal more information about a self-employed tenant on which to base your judgments. Start with the tenant themselves and ask for an outline of their sources and levels of income, what they do and understand how regular their income is.
You can also quite legitimately ask the prospective tenant to provide their accountant’s details. You can then follow up with the accountant (who will be quite used to dealing with landlords) to determine whether the tenant can meet the demands of the rent. They’ll be able to give you details of the tenant’s current income and record in the previous year. A reference from a bona fide accountant is as good as a employer’s reference in other circumstances. If they’re operating a Ltd company, don’t forget that their audited accounts and registered office details are all openly available at Companies House. By paying a small fee, you can check the company’s past performance online.
It might also be that your self-employed prospective tenant does the bulk of their work for one major client or even just a handful of people. It’s perfectly acceptable to ask to follow up with their major paymasters and check out they’re kosher. You might be concerned because a freelancer or contractor can easily be dismissed. But think about it, that’s true of employed tenants too.
If you are still jittery, having got a full picture of the self-employed tenant’s finances, then the last option is to request that they provide a guarantor. You’ll want to ensure that you screen and verify the person guaranteeing the rent with all the rigour of screening the tenant themselves.