How to screen prospective tenants in Spain?
Your property is one of your most valuable assets. And selecting your tenant is one of the most important decisions you make, because choosing the right tenant has a significant positive or negative impact on the success of your real estate investment.
So it is important to check all prospective tenants thoroughly to a degree that gives unquestionable confidence that the interested person is a suitable tenant. And that he or she will pay the rent and will abide by the terms of tenancy and look after the property.
It is a good idea to work with a tenancy application checklist. This checklist can be used as a guide when checking the applicant's references.
So, how to determine if an applicant is financially capable of meeting the rental payments? If tenants are interested in renting your property, we will verify some points:
- verify the proof of earnings
- check how previous tenancies were conducted - or - obtain references from any previous landlords
- verify the applicant's identity through supporting documents
- check the applicant can support the rental payments
They also have to provide some of the following documents. If the tenant is employed:
- photocopy of their DNI;
- the last 3 pay slips, so you can see their salary and how long the employee is working already for the company;
- their employment agreement;
- the most recent tax declaration (declaración de la renta, Certificado de Retenciones, IRPF).
If the tenant is autónomo:
- last declaración de renta and the two last trimesters of VAT
If the tenant is retired:
- certificate from social security proving the situation as well as the monthly amount of their pension
If these documents produce any doubts, you can check the creditworthiness of the prospective tenant:
- if employed: by requesting information about the rental history from the previous landlord;
- by requesting information at FIM, fichero de Inquilinos Morosos, a website where non-paying tenants are registered.
If possible, it is always a good idea to ask for an additional guarantor. If this is not possible, or the documents and further check produce too many doubts, we will recommend that you don't continue with this tenant. In the end all that counts is finding and retaining good, long-term tenants.
Nevertheless, you always have the option to take out a so-called non-payment insurance, seguro de impago, for example at ARAG or DAS.
Need some help with finding good and reliable tenants?
© Lilian Hermans - Quilantro