Advice for a new, nervous landlord

[BrilliantBetty]

I have a small, unoccupied property in a large city.
It would be suitable to rent out and it is in good condition, recently decorated and clean.

I would like to rent it out not for maximum rent income but at the market rent for housing benefit. So someone relying on housing benefit, or on a lower income in the area could afford it.

In the area that's approx £1250 per month.
Housing benefit for the number of bedrooms.

But what happens if they don't pay. It seems to me nothing? You try to evict them and that takes about 6 months in which time they potentially aren't paying.
And you have to still house them plus deal with court case.

AIBU to think this is V risky?

Can you think of a way to guarantee rent is paid. Am I better off doing something else with the place? It's been empty a few months now and I need to do something with it.

Sell it? There's not much in the world that would cause me to hang onto a second property. More hassle than it's worth.

It's a shame but I agree. A hsg benefit tenant could well be fine. I've worked with plenty who I'd happily have rented my flat to, but then like you say, if their circumstances change and the HB suddenly stops, there are many legal hoops to jump through to evict. It's such a shame. I'd either get a private tenant through an agency and pay for rent protection, or sell.

I remeber reading about guaranteed rent thing when you can work with local authority and they are responsible. Since you are looking at the prices of social housing, that could work if it still exists and your council does it

I've had tenants trash my property. One was a single mum and her daughter who trashed the place and never paid full rent. My current tenant has been paying half rent for over a year and is in the process of being evicted. One has been on benefits the other in a professional job. It's a risk signing up tenants if they are on benefits or not.

@ZaraW that's my worry. Will there be any way to reclaim the rent owed?

My local authority guarantees rent for private landlords who let via them. Check out what the local authority in your area offer, they may shoulder all of the risk just to help reduce their social housing waiting lists.

The most important piece of advice I could give you is to thoroughly do your homework around the legalities of being a landlord, your rights and obligations, and the tenants rights and obligations.

And make sure you can afford months of unpaid rent.

[quote BrilliantBetty]@ZaraW that's my worry. Will there be any way to reclaim the rent owed? [/quote]
I'm not even going to try to get the money back. He would probably end up paying 5 pounds a month or some small amount. I just want him out of the house as I hope to move back in later this year.

In our area, you can lease your house to the local authority for 3, 5 or 10 years. They pay guaranteed rent, approx 80% of market rate, and they carry out any repairs required at the end of the tenancy. I think Orchard and Shipman manage some schemes like this. Google "guaranteed rent" and the name of yiur local authority and you may find a similar scheme

If you rent to a private tenant, I think you may be able to insure against non payment of rent

@notanothertakeaway

In our area, you can lease your house to the local authority for 3, 5 or 10 years. They pay guaranteed rent, approx 80% of market rate, and they carry out any repairs required at the end of the tenancy. I think Orchard and Shipman manage some schemes like this. Google "guaranteed rent" and the name of yiur local authority and you may find a similar scheme

I was going to say this I don't know any names but heard adverts on the radio for guaranteed rent.

As per PP, some accommodation providers who house either social tenants or refugees / asylum seekers also pay guaranteed rent.

You'd sign a contract for a set number of years, you would get paid LHA rates and then all repairs are reported to and handled by the company.

Most local authorities have a scheme where by landlords lease their property to the council for guaranteed rent at UC/HB level and damages (regular repairs remain the responsibility of the landlord) and they then lease it to tenants.

Typically they ask for a min lease such as 2-3 years and have stricter requirements then renting privately but also offer a bonus, and grant or loan if the property needs work doing to it

I’ve done this with mine and am very happy with how it’s gone so far, and know others who are too

Just to add there are companies that also offer this but after enquiring with them they offer less then renting directing with your LA so I think they just put the property through the scheme for you and take a cut

Try to avoid tenants on benefits because they are more likely to cause you problems, the big three being not paying rent, trashing the place and of course antisocial behaviour. You can't be seen to discriminate but there are ways to avoid having them, credit checks and references and so on.

"You can't be seen to discriminate..." do you think maybe because it's fucking abhorrent to do so? Someone on benefits is no more likely to trash your place than someone working full time. Your post is further proof of why the private rental sector needs to be more strictly regulated.

Make sure you have landlord insurance

Depending on mortgage and insurance company you may not be able to rent to those on HB when they take on the contract

I have found home care cover that provide 24hr emergency call outs (gas/electric) to be very good (shop around)

Depending on mortgage and insurance company you may not be able to rent to those on HB when they take on the contract

This is now illegal which is why my main advice is to educate yourself on the legalities, your/their rights, and your/their obligations.

To be honest, my tenant on benefits pays the rent every month and causes me no problems at all. I’d take someone on benefits again over someone who is not! Prior to that my working tenants trashed the house and the set before that ended up being violent drug dealers.

Being a landlord is absolutely not to be undertaken lightly, BlatantlyName Changed has given excellent advice. Please also make sure you understand the tax implications, both for the rent as income and for Capital Gains Tax, both have / are changing.
I will never be a landlord again. Ever.

Depending on mortgage and insurance company you may not be able to rent to those on HB when they take on the contract

In which case those mortgage and insurance companies are operating illegally and need reporting. Thankfully this nasty discrimination against people on benefits has been outlawed.

Do you have a mortgage? If so you can't rent it directly to the council.

No it is not

I can opt to not insure which I would not do

I also do not have a buy to let mortgage I have to inform my mortgage company that I am renting out my property

I'd sell it.