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.

@RickJames

IME get a nurse, teacher or civil servant. They tend to stay in work. Meet them at the property, see how they act towards your property, their kids, your kids, you. Talk to them, ask them stuff about what they enjoy doing. Single parent vs couple is not a worry for me. I find women easier to deal with and single mums tend to have their shit together but a couple likely has 2 income streams. How are they dressed etc. I don't think richer people make better tenants, just as long as they can pay the rent. Allow a pet, the tenant will value the tenancy more because most LLs dont allow them.

A good tenant is gold. Don't pester them or put the rent up if you don't need to. I'd always hang on to property in this day and age because savings are shit and decline in worth.

Good luck! I hope you get someone great.

The most disgusting tenants I had, who left a property needing a top to bottom deep clean and redecorate, were teachers.

They are not more likely to trash it, there is traditionally a lot of prejudice against benefit claimants who are seen as lower class and therefore scum.

I stand by my earlier point about there being posts on this thread that reinforce my belief in tighter controls on the private rental sector.

@winniesanderson

I spent much of my childhood living in rented accommodation. I was taught that it may not ever be my house but it is my home. And I've always looked after the houses I live in as if they were my own. Benefits or not.

Sounds like you are exactly the kind of tenant I am looking for!

I wouldn't rule anyone out. I suppose I would want extremely good references from previous landlords, so first time renters wouldn't be ideal.

You need to declare the income via self assessment each year & depending on your circumstances you may need to pay tax

Why don't you rent it out using an agency ?
They can assist you with everything

You seem too thick to be in charge of other people's home.

I'm not thick. Thanks anyway.

I heard on R4 Moneybox that some companies do now provide Landlord insurance that covers HB Tennant's. HB shouldn't be discriminated against. Loads of 'respectable hard-working' families get some.

Housing benefit doesn't make a difference, an eviction would still take as long even if they were paying themselves and they'd still be liable for the missed rent.

Why don't you rent it out using an agency ?
They can assist you with everything

You do realise absolutely anyone can set up as a lettings agent with zero training or qualifications? If they don't get everything 100% correct then the LL is still legally liable for the mistakes, possibly leaving them with tenants that can never be evicted.

I rented out a managed flat and three lots of students no problem, paid rent on time, kept it clean, didn't damage a thing. Then an regular 'professional' guy moves in and the complaints from neighbours started first week, and after first months rent he never paid again. I paid for rent guarantee but as yet have not seen a penny.
I did have a couple on HB and they were fine if a little short on household hygiene.

To be perfectly honest I think "accidental landlording" should be banned.

It's not fair on either party.

As you've pointed out you can't really afford to house a tenant for free if they hit problems with paying their rent for any reason (doesn't just apply to benefits recipients can happen to Anyone especially in our current economy!)

Could you also afford to eg replace the roof, put a new boiler in if needed? Repair a major electrical or plumbing issue?

Also there are strict regulations to being a landlord now from protecting deposits to maintaining the property to organising and paying for annual safety checks and keeping up with new regulations regarding things like smoke alarms and how doors are fitted etc

Before you even think of advertising for a tenant I would strongly advise you thoroughly research the requirements in your part of the Uk (I'm assuming you're in the Uk)

The laws and regulations vary across Uk countries and are constantly changing.

Can you even get suitable insurance with a tenant? Many insurers are reluctant to cover various aspects of rented properties and it can be pricey getting the appropriate insurance.

This is why rent isn't simply a case of covering whatever mortgage there might be.

Strictly speaking legally it's supposed to be no longer allowed to discriminate against benefits claiming tenants as that's indirect discrimination against women there was a court case actually it may have been a few cases. But unfortunately some landlords and letting agencies are taking measures to get around this.

I'm on benefits long term and have been a tenant all my adult life. My last private let the previous tenants were supposedly nice working professionals - they did a moonlit flit and stole EVERYTHING inc some stuff that was supposedly "nailed down" like white goods in the fitted kitchen, light fittings etc. I stayed there nearly 8 years and kept the place well. Landlord got made redundant though and had to sell the place was why we had to move out.

Personally I think it should be a regulated profession with licensing, but while so many MPs are landlords and property developers tenants will continue to be treated as an afterthought

I would rent use an agent to do background checks, interview and vet with landlord insurance.
Not everyone is the devil tenant

Open rent has plenty of information

I have rented my house to 3 loads of tenants. Did it privately. I ordered credit checks online and asked for refs.

I used Openrent this time as I felt lazy. I stipulated a 12 month contract. They do refs, credit checks etc. You meet prospective tenants to see if suitable and then accept.

They remind you of the gas, electric and EPC certificates you need and arrange if needed. They last for 5yrs, so it's only a little faf and it's sorted for ages. I also fit smoke and carbon monoxide alarms.
Openrent informs you of what you need to give tenants such signing their photo ID to make sure they are not illegal immigrants. They email them the ' Right to Rent' documents. These can also be found in the GOV website.
It's not difficult to be a landlord. It's like anything new once you have done it a couple of times you know the score. It's a good source of income. Better than it sat in a bank on low interest rates.

Forgot to mention that saving the deposit is easy. You can use My Deposits or Open rent will do this.

Looking at some of the other replies you would think being a landlord is a nightmare but it really isn't.
You lessen the risk with refs and credit checks.

I’d just like to add I’m another “on benefits” renter.
I’m so glad my landlord allowed me to rent the property, as are my children as it’s allowed us all to stay in the same area for school and friends.
I work part time and receive UC. My rent has never been late. I keep the house lovely. Infact I had an inspection this morning (my first) and I got a phone call from the leasing agent saying everything was great and I was obviously looking after the property.
I report any problems promptly, I’m happy to fix any little bits and bobs myself.
I would just say to perhaps meet/talk to potential renters. On paper I probably looked less desirable than a high income single person due to my financial situation. But by talking to me, they knew I wanted long term etc. I’m not saying to fall for a sob story, but it’s awful that “on benefits” people are all lumped together as some sort of house wrecking, non rent paying group of people.
Plus, with the current job market, I’m pretty sure my benefits are more stable than some jobs!

It's so frustrating being in a position to help but having to assume a level of risk in order to do so. I hadn't heard of LA's being involved but it sounds like a good option. I have an Airbnb which last year was unoccupied when Covid hit. I would have been absolutely in favour of allowing someone fleeing DV the opportunity to stay for nothing but just couldn't afford to do so from a liability perspective.

Property damage can run into tens of thousands of pounds and individuals will struggle to be able to come up with insurance which protects them. More needs to be done to allow those who can help the housing crisis do so without having to assume the risk which goes with it themselves. A Government insurance scheme could be a start. High risk generally equals high reward, low reward should come with low risk but in property terms all risks seem to be equal and in some cases low reward equals high risk.

@skirk64

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.

Some letting agencies do guaranteed rent schemes, though sometimes this only applies while the home is vacant so you will need to check first.

The golden rule for letting a property is to not rely on the income from the rent and to be able to afford to refurbish the property if the tenant trashes the place and then does a runner. You ought to have a reserve of £20K or so, hopefully it won't be necessary to dip into it but sometimes tenants not only damage everything but strip out anything that they can sell such as radiators and pipework.

In most cases people in your position are better off just selling the property and being done with it. A few hundred thousand in the bank is better than £1250 per month that can't be relied upon.

It's illegal to discriminate and you sound like a total snob. Not everyone on benefits is a down and outer, you never know what life will throw at you, be thankful you are in a fortunate position

@OhWhyNot

I can’t get insurance with my mortgage to those that have outstanding CCJ or are on HB

If they apply for HB the day after they sign the contract that’s fine

There is no way I would ever rent out my property without full adequate insurance

So there is a way that they are discriminated against that is not my decision

It’s not so black and white

Well you and your insurance company are breaking the law.

@OhWhyNot

No they are not

I was happy to rent out to a potential tenant but he had an outstanding CCJ (for a few hundred pounds) I couldn’t get the insurance to cover him

And it was many companies

As I said the next day they can sign up for HB.

Some of these posters you are arguing with are legal professionals who work in this field.

YOU AND YOUR INSURANCE COMPANY ARE BREAKING THE LAW

Get an agent and let them do the chasing/sorting gas certificates/arranging repairs, etc. It costs but they have saved me a lot of money in the long run. Make sure they’re reputable, trustworthy, and do repairs quickly and efficiently. They make sure everything is done legally and the tenant can be confident that the property is safe, attractive and secure.

If you’re in a university town consider PhD students. They’re there for 3 years full time and in my experience have been excellent tenants.

@WTFisNext

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.

Neighbour went for a LA option - but another LA to our own. Because (presumably) it was out of area, they used it as emergency housing for difficult tenants. Months of trouble from loud parties, teenagers with large out of control Alsatian (in small city flat), aggressive visitors trying to access the building, drug issues.... Bloody nightmare.