Reassess Your Finances & Living Situation

Saving for a house is a big commitment and can take some time depending on your financial position. It’s important to have a good look into your finances and start to shed some costs. If the place you’re living in is pretty expensive due to being in a central location, can you move a bit further out and commute instead?

Saving money on rent is one of the biggest cost savers. Minimizing the amount you pay can put you one step closer to owning a home!

Pay Yourself First!

Paying yourself first means paying a portion of your salary into your savings account as soon as you get paid, before you spend money on anything else.

If you want to start paying yourself first, move a portion of your income into a savings account on payday.

Decrease the Little Luxuries

We wouldn’t advise cutting the luxuries that you enjoy out completely, as saving for a house is already hard enough! However, you can decrease the number of luxuries that you enjoy throughout the year in order to save money.

This can include things such as travel. If you usually travel abroad twice a year, maybe decrease that to once a year or opt for a few domestic trips/staycations instead. Another example could be eating out, we tend not to think too much of it at the time, but these costs add up very quickly!

Now that you’re all saved up, let’s talk about credit! Read our previous post: Ways to Improve Your Credit.

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What is a landlord reference letter?

A landlord reference letter, or rental reference letter, is a document written to a potential landlord by a previous or current landlord, property manager, colleague, or even roommate. Also, it is designed to verify that a prospective tenant is a responsible, reliable, financially stable individual. It should confirm that they can adhere to rules and regulations, respect deadlines, pay rent on time, and keep a rental property in good condition.

What are things to avoid when writing a rental reference letter?

1. Using your friends or family as references.
   It’s best not to ask close friends or family to be referenced during this process. References are responsible for reporting on things such as financial habits and responsibility. In addition to this, it can be obvious when a tenant uses a close friend as a reference, and the landlord may end up penalizing the tenant for it.
2. Not asking for permission.
   If a tenant wants to request a reference letter, the best thing to do would be to ask first. As nobody likes to be rushed when it comes to things like this!

Drafting the letter

• Keep it short and relevant. 
  The landlord reference letter should clearly outline the rental history of the tenant along with the landlord’s experience in dealing with them. An example of some factors that can be mentioned is financial stability (ability to make payments on time), condition the tenant(s) leave the rental property and how trustworthy they are. If the tenant has bad credit, this is especially important as it may be the reference of the landlord that indicates whether or not the tenant can secure a property.
  
• Honesty is the best policy. 
  Be honest and evidence statements properly. This is also one of the reasons it’s best to avoid having friends/family write a reference letter on behalf of a tenant. A seemingly small and insignificant lie can destroy the tenant’s chances of securing a home. The person writing the letter should only discuss things they know first-hand and are sure of. Additionally, the writer of the letter should be ready to elaborate or provide evidence to support claims.
  
• Avoid bias.
  It’s important to come across as unbiased, professional and authoritative. Whilst negative references don’t help many people, neither do heavily biased ones. A biased reference is just as bad as a negative one. If the person writing the reference letter is a landlord, it’s important to be as factual and as objective as possible, assessing the situation for what it really is.
  
• Have a good structure.
  To avoid writing too much or too little, set out the structure of the letter clearly and include:
  
  Your Name & Contact Details
  The Name of the Addressee or “to whom it may concern”
  A Short Introduction,
  Body of the Letter,
  Conclusion,
  Signature.

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Read our previous blog post here: Carrying Out a Home Inspection

The post How to Write a Landlord Reference Letter appeared first on PropHub.

Get Your Score & Report

In order to improve your credit and chances of your rental application being accepted, you need to know what your credit score actually is, so you can start working on it. Contrary to popular belief, less emphasis is placed on the score itself and more on the overall picture of the report. Renting with bad credit may be slightly easier depending on your financial history.

Constantly Review Your Finances

It can be quite daunting to review your finances, especially when you are aware that they aren’t great. Take a look at your finances on a regular basis and consider if you really need all of the outgoings – check subscriptions, bills and debts that need repaying.

Explain Your Personal Situation

Renting with bad credit isn’t impossible, and depending on the landlord, explaining your personal situation may be helpful. Providing proof of a stable income and savings for example, can go a very long way. Putting the landlords mind at ease and letting them know that you can comfortably afford monthly rental payments is paramount.

Consider a Guarantor

This should be a last resort, but if you are really struggling to find a place to rent with bad credit, this may be a good option. If you choose this route, you’ll have to find a cosigner who has a secure income and good credit that they’re willing to put on the line for you in case something happens and you stop making rental payments.

You also need to be certain you will be able to pay rent every month. Missing a payment means your cosigner will be forced to pay it on your behalf.

After fixing your credit, see our previous post about finding your dream rental!

To learn more about our services and register, see here!

The post Renting With Bad Credit: What Are My Options? appeared first on PropHub.