To think about kicking out (good) tenants?

[pctmmn]

I've had them for over three years and never missed a payment. But in April they said they were struggling so offered a 1/5th rent discount for three months. When this ended they asked for another three months. It doesn't affect my bottom line has I've taken out a 6 month mortgage holiday and the payments won't increase when they start again as it's added to the term.

I've been able to build up a bit of cash, but one works at a hotel and the other manages a resterant.

Would I be unreasonable to ask them to confirm the full rent needs to be paid for September else I'll give them notice? I really want someone in there paying the full rent and it feels like I'm subbing them right now.

Some landlords were passing on the payment holiday to their tenants as a gesture of goodwill. If you're not out of pocket what's the problem? What are the chances of finding good tenants again?

What if you either can’t get tenants or get rubbish ones? You’d be better off putting in writing a formal date that full rent needs to be paid rather than chucking them out. As you said, you’ve not lost out.

To be clear, you’ve made some money out of the pandemic (if that’s what ‘build up a bit of cash’ means?), their reduction doesn’t affect your repayments at all and they’ve been good tenants until Covid / unemployment hit and now your considering evicting them? I mean, aside from the morality of that, unemployment is going to be wide spread with many people unable to afford housing / to move. Be careful what you wish for - you may find your house empty for some time.

Have they been furloughed? Are they expecting to payback the 6 x 1/5 rent discount at a later date? Are they now unemployed?
What kind of tenancy do they have?

Are you asking them to pay back the fifth discount you gave them or are you just asking them to start paying full rent again from September?

Sorry but I think you are being overly harsh. They are paying the reduced payments presumably because their income has been affected by covid which is beyond their control.

You've had a mortgage holiday and built up some cash so it's not as if you are massively out of pocket.

They are good tenants- be thankful for that. New tenants may not be so good.

Not unreasonable at all. You can't give them a discount indefinitely. You would be entirely reasonable to find new tenants, if the current ones are not able to afford your rent, they need to move somewhere cheaper.

I don't think I'd be kicking out any tenant if I didn't have to, because with the economy in the shitter they'll have much more incentive to stay put until court ordered, and fuck knows how long that would take to sort with a pandemic on.

To be clear, you’ve made some money out of the pandemic (if that’s what ‘build up a bit of cash’ means?), their reduction doesn’t affect your repayments at all and they’ve been good tenants until Covid / unemployment hit and now your considering evicting them? I mean, aside from the morality of that, unemployment is going to be wide spread with many people unable to afford housing / to move. Be careful what you wish for - you may find your house empty for some time.

This. You might find yourself having to drop the rent down to get someone in. You're getting a mortgage holiday. Renters have not had the same kind of help.

It’s hard to find good tenants that pay without fail. I’d avoid doing anything that could potentially leave you out of pocket or in a bad situation. Everyone has been affected financially, I doubt they are abusing the situation but clearly struggling and still paying their rent. If you can afford to help them then you should consider it.
Remember If you give them notice they don’t legally have to leave as they’ll be considered homeless and told to stay put until they are housed by your local council. This will give you a high bill in legal fees. Then costs for advertising for new tenants who may not stick around/cause damages they won’t pay for etc. Of course you’re not a charity case and it is a business transaction, but I wouldn’t go through all that stress and risks just because my tenants are struggling.

I think people don’t understand what a mortgage holiday is.

It means that your interest goes up and all your payments are more when you start paying it again. Not that the OP gets ‘free months’ off her mortgage

OP I don’t think you’re being unreasonable to expect the rent to be paid at some point as essentially you are being kind and subsidising their housing at present and you’re not obliged to do this ad infinitum or indeed at all.

Good tennents are like gold dust so I'd be careful what you wish for.

Whilst the property purchase market is picking up due to the govt tax discounts that's not true for rental.

In fact (as a LL myself) I expect to see a downward pressure on the rental market in terms of monthly rent.

Lots of people are likely to lose their jobs in the coming months and I'd say there's a fair chance of you losing good tenants only to find you have to offer a discount to attract someone new.

FWIW I gave my tenants a 3 month total rent break which I don't expect repaid and right now they are on half rent.

They both (couple) work in a hard hit sector and have bust a gut to find other (albeit lower paid) work.

I've no intention of evicting them as they are doing all they possibly can in totally unprecedented circumstances and frankly think we all have a moral duty to "take a hit" in these times.

I would tell them in writing that the temporary arrangement is over, full rent is expected from date X. . Plus, we need to discuss your repayment plan, please contact me.

You can discuss it with them, they may be in a position to pay full or to negotiate a lower reduction.
Depends how marketable your property is and how confident you are you'll get good tenants again.
Factor in a void for any maintenance etc when your tenants move out, it'll probably want a lick of paint after 3 years.

I would give them the other 3 months they are asking for but make it clear that after that the payments will return to normal

I’m a landlord. I took a payment holiday and passed on all of the holiday to my tenants who have paid no rent for the last 3 months. If they are good tenants stick with them and play fair x

My mother has a similar issue with tenants. However, she has decided to give them reduced rent (1/3) until November.
They are brilliant tenants and she doesn’t want to lose them.
Op I would give them the three months that they have requested.
As others have said , be careful what you wish for.

I have tenants and gave them 3 months at zero and then the next 3 will be at 50% returning to 100% after that and they are not expected to make up the difference. We had this all in writing from the start and all signed it. If they need more time then I would expect them to ask and I'd be willing to discuss it but if they are back at work I can't see any reason for it

I really want someone in there paying the full rent and it feels like I'm subbing them right now

But they are kind of subbing you in the long term by paying your mortgage.

It would be a pretty shitty thing to do in the current situation. If they are paying 80% rent, that should have covered the mortgage or most of it. You are only just over 1 month's rent short. You didn't have to take a mortgage holiday so any extra costs incurred from that are down to you really. You should have some money put away for maintenance and void periods so you should have been able to make up any shortfall. Or you could have taken a 3 month mortgage holiday instead, then used the rest of the rent to make an overpayment, minimising any extra interest because of the mortgage holiday.

It doesn't make great business sense either. By the time you factor in the letting agent's finder fees (usually about a month's rent or more) and costs of setting up a new tenancy (agreement, inventory, references etc), fixing wear and tear, it will cost you the same or more than letting them stay on 80% rent for another 6 months ie 1.2 months lost rent or 1 month's rent on agency fees plus hundreds on new tenancy costs.

That is assuming there is no void period. I can't imagine the tenants will allow viewings if you evict them so you won't be able to let it until they leave. Don't bother saying "but the contract says they have to allow viewings in the last 2 months". They don't. It's an unenforceable clause.

Also, they will probably struggle to get another tenancy if they have been furloughed or have a reduced income. If they can't find somewhere else, they may have to go through the process of eviction to be eligible for help. That is going to cost you even more and take a very long time at the moment.

I'm a landlord and I do all I possibly can to hold onto good tenants. To the extent that my tenants asked for a £50/month reduction in rent last year and I have it to them. Never underestimate the value of good tenants.

Don't evict them. You already said they are struggling, why make their lives even worse? Count yourself lucky you've got such great tenants who are paying your mortgage for you.

@Iwouldlikesomecake exactly, l think a lot of people don’t understand what a mortgage holiday actually is and the extra costs incurred. I personally would be wanting all of the money back from them, so the quicker they start paying the actual full rent and paying me back the better

If they are good tenants, then stick with them.

Either they will return to work when furlough ends and be able to pay the rent or they will end up on UC and be able to pay most of the rent.

If you look for new tenants, Sod’s law says you will end up with non-payers who damage the house & refuse to leave.

Good tenants are worth their weight in gold and there’s a few things to consider.
Firstly 1/5 is low - let’s say the rent is £1000 month - if that was for 6 months total you’re down what £1200 in total. Assuming you get them to leave you’re likely to have a void of at least a month so that would be £1000.
Then cleaning costs, council tax for the void period, anything you need to update (as new tenants are always fussier than existing ones). Obviously you may get more rent if you’ve never put it up, but right now I think it’s certainly not guaranteed.
And your next tenants may choose not to pay rent, be a nuisance neighbour or even more mundanly just be the type to text you with a new compliant every week.