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.

@pctmmn

One was furloughed the other lost their job.

I've built up cash because I need to if things get rough!! Better that than defaulting on the mortgage.

I am worried about a downward pressure on rents, so wouldn't it be a good idea to kick out the current ones and get some white collar workers with secure jobs on a years contract?

Yes. Because I hear there’s loads left of white collar jobs!

We work as white collar jobs. As you’d put. Financial market in central London.

I tell you we are adoring our landlords. Who we haven’t ever been late on the rent. Even during corona. As we’ve been able to keep our jobs. But they still asked if we’d liked too. We’ve paid for all repairs that have been done whilst we’ve lived here. The short time it’s been. Brought all new white goods. Which we will leave behind.

But we’re in a very small minority. Most lost their jobs. All they’ve done is ask a question. It’s your choice as to whether you’ve granted it or not. They asked if they could take a bit of a rent break. You said ok. They’ve asked for an extension. It’s up to you whether you agree

However. Our landlord loves us. They always tell us we’ve been their best tenants. Before my job now. I worked as an estate agent and I can tell you how tough it is. To get good tenants.

I would either agree or refuse their question

It’s simple

However I wouldnt kick them out.

We were encouraged to leave after requesting a discount while urgent repairs for problems affecting our health were carried out (in the meantime we only had use of half the property). Now the place has been empty for a couple of months, some rudimentary repairs have been made and it has been relisted for 50% more per month. This is in a city with a large student population that will likely not return in nearly the same numbers in the autumn. I suspect the huge hike in rental price is a sign of desperation rather than good business sense.
Leaving aside the emotional aspect, kicking your tenants out might well cost more than the discount you are providing right now.

@Hoggleludo I bet your landlord loves you. Buying all new white goods and paying for all repairs. You are a dream tenant.

Honestly? You'd be crazy to get rid of good tenants just for this, have you tried talking to them?

My DD has 3 houses she lets out - she has been understanding to them during this unprecedented situation.

If they are good tenants, are you are not strapped for cash, I certainly would not be kicking them out. This is just one part of "pulling together."

@Puzzledandpissedoff

I do feel like 6 months with a large reduction is enough leeway. Then if they haven't improved their situation I think it's justified to find someone better

You're quite right, but unfortunately you've chosen the wrong forum to ask about this. On MN LLs are often considered the devil incarnate so you'd be better off on Landlord Zone or similar

Given I'm a LL and don't think I'm the devil I beg to disagree .

The reality is that being a LL is a business that you aim to profit from.

However, I think there are a lot of LL's who put short term gain ahead of long term rewards.

Obviously I don't know the OP's financial circumstances and how dependent on the rental income they are.

However I would absolutely tread carefully here.

I've a feeling rental rates will take a hit as unemployment unfortunately rises. The idea that the OP will get another set of good tenants at the current rate is simply a best case scenario.

It's actually very likely they may incur substantial costs in evicting the current tenants if they dig their heels in, plus what I call tenant "transfer" costs (cleaning, refurbs, estate agent fees, vacancy for an unknown period etc) only to find they "gain" new "ok/poor" tenants at a lower rate who then in turn also fall foul of the Covid economy.

I do absolutely believe that good tenants are good business and the idea that we are through this pandemic is just silly.

So many people are still on furlough and when that ends I think we will see a massive impact on people's incomes and job prospects.

Changing good tenants now - even discounted is simply bad business imho.

But the OP is saving money because her ‘payments won’t change’ she is just ‘extending the term’.

Just think about this for one minute. Or take two if you still think you are saving money!

Having been a landlord I would never kick out a good tenant if I could help it.

@zonkin

Don’t get me wrong. The white Goods are cheap. But we’re moving abroad. So there won’t be any point. Yeah.

In return they’ve never hiked the rent price. So it’s good for us too. We’ve saved a fortune in rent increases. So it works for both of us.

They are still paying most of the rent though? As a landlord myself I would give them the extension but explain you need them to be paying in full once the extension is over and to work out a repayment plan for what they owe.

I wouldn’t be hasty in trying to remove them as they sound like really decent people and I would imagine they want to be working and paying their rent. Obviously, if you get them to leave it will mean they will have negative references when looking for a new place which will make it difficult for them.

OP, you shouldn’t be subbing them but a bit of kindness (as you can afford it at the moment) would be very much appreciated, I imagine.

You're being a twat. You should have passed on the payment holiday entirely. Good tenants are worth their weight in gold.

If you lose even one month's rent while you try to find new tenants, that's totally lost money equal to 5 months of keeping the tenants you have.

If you are lucky enough to find new tenants they may expect to negotiate a permanent reduction in the rent, and may not take care of your house like the current tenant.

I've been really lucky so far, my tenants have paid full rent. But if they asked for a discount I'd fall over myself to give it rather than lose them.

Re the bad reference you’d be banking on them not seeking council housing at which point the council will tell them to stay until the bailiffs arrive and a reference wouldn’t be required and they get secure housing win win for the tenant tbh.

The morally right thing to do is to pass on the mortgage holiday for as long as you are receiving it. Once mortgage payments are expected then they should have to start paying too. It's incredibly bad luck they both work in the hardest hit industries but at the end of the day if they were mortgage payers the bank would take a dim view of long term being unable to pay the bills

ALSO assuming they are getting furlough pay at 80% until end of September then they should financially be able to pay their rent if they are cutting back on all their other expenses

You’re ignoring perfectly reasonable advice. Yes you can ask your tenants to start paying full rent, but depending on the costs of a void, how desirable your property is, the market etc you could run at a loss.
1/5 is a pretty small discount to be honest that they have kept up with what 50% of their income reduced - plenty of white collar workers haven’t done that.

As you’ve said - it’s a business - so think with a business brain. You serve notice in September - that November for them to leave. Property needs anything doing or the market is quiet you could well be looking at January for a new tenant.
How much would the void loss be? How much is the council tax? As it’s winter what Utilities are going to need to be paid for during the void.

You’ve said “we pass that cost on” - well if the market dictates that you can’t - then basically you can’t.
I can’t believe that an experienced landlord hasn’t thought about all of this. Again taking my £1000 example - if you reduced the rent by 20% for a year you’d still only be 2 months rent down - a void can cost more than that! And your gambling on new tenants.
Jobs mean sod all - years ago I was a relocation agent and trust me I saw the unpaid rent from millionaires who knew they could get away with it, and houses trashed by corporate tenants who just treated places like a hotel. You actually just can never tell.

Furlough ends 31 Oct, so why not give them another 2/3 months. They’ll know then if they have a job or not ...

I couldn't contemplate doing this to our tenants and would offer whatever support I could to them. They must be under the most unbearable stress right now and I would not want to add to that. No I'm not a charity and neither are you but some acts of kindness cost so very little.

We haven’t asked for any rent reduction during covid, we’ve always paid on time and we pay premium rent. Our landlord has no idea if we are struggling or not but has kindly increased the rent anyway from next month 🙄

Given I'm a LL and don't think I'm the devil I beg to disagree

That's why I said LLs are "often" regarded that way on here rather then always As one yourself I'd hradly expect you to feel that way, even if you were one of the lousy ones (which I'm sure you're not)

FWIW I do agree there are a number of things for OP to consider, but realistically her tenants will either be in a position to pay full rent after the 3 or 6 month break or they won't ... and if it's the latter there'll be some hard decisions to make

You chose to take the mortgage holiday OP. You are letting, so any extra interest will be bled out of your tenants anyway.

Fucksake, you’re effectively getting a free house, and if not free, you’re paying a fraction of what it’s worth, you have good tenants and you’re still moaning. Precisely how much do you think the world owes you?

@BumbleBeeeeeee

You're being a twat. You should have passed on the payment holiday entirely. Good tenants are worth their weight in gold.

Not this