To evict my tenants

[Landlordbyaccident]

Name change due to personal info possibly given.

I brought my first home in my 20’s and quickly paid off the mortgage on a 2 up, 2 down terrace in Birmingham. Nothing special and it always needed a new kitchen. I invested very little money in this house as I was so unhappy there.

I brought my current home in 2018 and we are paying a manageable mortgage although other outgoings has become a strain in the current financial climate. We owe around £75k on a house worth around £250 (not sure if this is relevant). My previous house has been rented out to a friends friend for around 2 years before this it remained empty.

They are paying £475 per month, other rentals in the area go for around £800. Some months they pay late or come up short. I know they are struggling. They are from a Caribbean island so I am not sure what benefits they are entitled to to help them.

Anyway my husband would like to ‘evict’ them. Ideally I would like them to increase the rent and remain in the house as they are no trouble and really nice people. I am going to be transparent in saying the house could do with some work being carried out but they never complain as I assume it’s because I am in a position of power and they fear I would evict them if I do.

After writing this I am not sure what I am asking? Would I be heartless in evicting them (goes against my core values) or raising their rent ? Should I just continue with the current contract and seek to cut costs in other areas.

what would you do?

No. Landlords provide homes for those who cannot provide their own.

Do a small top up on your own mortgage to release enough money to do the necessary repairs - the cost would easily be covered by the increased rent.

Does the kitchen need to be replaced entirely or can you put new cabinet doors on? If it's a full refit the house won't be habitable for a while I guess - whereas a new front door is a one day job.

If the couple don't have children perhaps they might consider a lodger to cover the increase in rent.

Oh, and why is it relevant where they come from?

Oh do give it a rest unless you can come up with a realistic short to medium term solution to the terrible housing crisis we are experiencing. And “get the Tories out” does not qualify.

If they're not managing such cheap rent, they're going to be screwed in terms of getting other housing but you also need to keep on top of maintenance.

Can you talk to them saying you need to make improvements but the rent will have to go up to cover it - and can they afford to stay if you do? You're not a charity, however, and need to protect what money you're going to spend out.

There are some great landlords. Not all are bad by any means. But buy to lets drive up property prices and reduce the pool of homes available to first time buyers. With help to buy on its way out, things are increasingly bleak. Market rents are ridiculously way above LHA levels. So private rent isn’t a workable solution for people in greatest need. Also, Airbnb directly contributes to our housing crisis. I wish more landlords would work with their council’s housing options teams.

If you continue to rent you should invest in the repairs and boiler. I would first give a notice of increase in rent and then go from there, if they don't accept it then you can evict them but it can be a protracted process. I'd sell personally and then use the money to help clear your current homes mortgage.

@ZeldaWillTellYourFortune While I don't disagree with the ridiculous anti-landlord brigade, it is absolutely not 'early lifestyle choices' that preclude people from home ownership in this country.

Average properties are more than 10x the average wage and you can only borrow maybe 4x your salary. Without parental help it is almost impossible to get on the ladder. This is because renting is so prohibitively expensive that you can save for years and years and barely scratch the surface to make up the gap. We've had years of very low interest which has served home owners fine but given savers no return on their savings either. Obviously that's now shifting but for those who have been saving all this time it's been years with no growth already.

I've house shared for years into adulthood in order to save for a home of my own, and for the last two years I stayed with my parents (aged 38) for the final push to get on the ladder. Every month I saved 75% of my take home pay, but each month the house prices went up more than that. The tide has just turned but to say it's because people have spent too much is just plain wrong. It's that house prices are hugely over inflated, simple.

Yes, some are, without a doubt. There are some ok ones though, and some very good ones.

You would be unreasonable to put the rent up if the house is in a poor state of repair. It sounds like you haven't spent anything on it since you started letting it out? Considering there is no mortgage on it, that's disgraceful.

Oh ffs, not this again. So no one should be a private landlord. Given that LA housing has massive waiting lists, what do people do then ?

If the repairs are "nice to haves" rather than essential, I'd increase the rent a little, and then do so annually until it is approaching market rent for a property in that condition.
Agree with PP suggestion that you suggest they get some advice to ensure they are receiving any benefits they are entitled to.
What is your reaction when they pay late or unable to pay the full amount? If you're fairly laissez faire about it, they may see that as an easy option and not prioritise paying the rent.
If they are able to stay, do the essential repairs, but not the "nice to haves".
If there's no mortgage, you must be making some money from the property; you would be able to offset costs of improvements against the rental income?
If they move on, bring it up to scratch & get a more realistic income; release equity from your own home if necessary.

Sell it.

You haven't got the resources to do this properly.

Either that, or continue as you are and stop being greedy about the rent.

As a LL you do have to weigh everything up. Actually, often the best option is to leave stable tenants in place until they choose to go themselves.

People like to say ‘serve notice and charge market rent’ but forget that doing this will probably incur big costs of getting the property up to standard if it hadn’t had money spent on it for years, plus getting new tenants is costly and if existing tenants don’t want to go, it can be hugely costly.

Often these kind of question come up, because the LL isn’t in a financially stable place. That’s down to themselves and not their tenants. Not having the money to provide the maintenance needed is poor planning on their part….and why should tenants suffer because of it?

These tenants don’t seem to be in a good position financially and neither is the LL…..but both may well be stuck with each other, as neither can afford the alternatives.

Sometimes it’s best for a LL to decide to sell up. Give a long length if notice and the. Market the property when empty. Yes, it might leave negative equity, but sometimes you have to accept that if you haven’t done the sums properly to avoid that risk. But if you don’t have cash to upgrade, booting the tenants out or trying to charge substantially more that they can’t afford is likely to result in zero rent rather than an amount you’re getting now. You have to weigh up that risk.

Your rental property sounds a bit run down. What exactly is the problem with the kitchen - is it safe to use? Could it be spruced up somewhat?

As far the boiler is concerned, I wouldn't take a British Gas engineer's word for it that it needs replacing. Selling new boilers to existing customers is an important revenue stream for BG. Personally I'd save my money and get an independent Corgi registered CH engineer to service the boiler and do the safety certificate annually.

You also need to be clear about terminology. Eviction is something you have to go to court for after you've given notice, if the tenants refuse to vacate. The problem is that, once they are served notice and don't want to move, they'll simply stop paying the rent, and it'll take you many months and legal fees to get them evicted. It sounds like you cannot afford this.

It's a difficult decision. If you raise the rent by more than 10%, they may genuinely be unable to afford it. If you raise it by a small amount, say 5% or less, it's barely worth it. Personally I'd leave it as it is and review once you and your husband are in a better financial position, i.e. able to cope without the rent for at least 6 months.

NB: Please double check your are complying with ALL landlord obligations. This includes having given them all the necessary paperwork (AST agreement, deposit certificate, Prescribed Information, Terms & Conditions of scheme, the government's How to Rent Guide,safety certificate (yearly), electrical safety certificate (every very 5 years), EPS (every 10 years). Plus smoke and carbon monoxide detectors. (There's a How to Let Guide on the Gov website.)

There is a lot of misconceptions.

The first one is that I can’t comprehend basic English!

Followed by those who are assuming that the house is a complete wreck and needs lots of work. There has been suggestions that it is inhabitable and needs £1000s spending on it.
This is not the case. It will benefit from a new boiler but this is all. The boiler is in working order. The tenants have never complained about the kitchen or front door. These are things which I had always planned on replacing.

I am not sure whether stating I have no choice but to accept the rent from the tenant is fair. LLs raise rents all the time. If I did do this, I would not charge market value although despite assumptions made I would get it. It’s in a nice enough area where homes are of short supply.

The homes which have a rent of £800 are very similar to mine. It would not have been helpful to make comparisons with homes which are of a much higher standard. It’s not rocket science to look at what’s on the market for rent and compare the rent of these houses to the rent, type and condition of mine.

I think I will increase the rent and I am aware of the risks associated with this such as losing good tenants, a long court case and or difficult future tenants.

Thanks all for those who have responded and if there are any other grammatical mistakes in my posts I can live with it!

But if they don’t meet their obligations, and charge exorbitant rent to people living with issues such as black mould or dangerous wiring, they’re not people I’d consider ethical or humane. Some landlords are brilliant. Others moan about spending £10 a month to sign up to enforced selective licensing schemes because they are crooks. In some cities, like Oxford, selective licensing now extends beyond HMOs to all private landlords. It costs next to nothing and you can tell the slum landlords by their public outrage.

I wish more landlords would work with their council’s housing options teams.

Sometimes that’s not down to landlords.

Ive been part of a great pilot scheme for the last few years.

Registered with the council. They essentially vet both the LL and the property. Gives the tenant the security that everything is decent and above board.

You could pay extra and use their repairs service so your tenant had full access to the 24 hour repairs available to council tenants. It also meant that LLs had access to reliable and fairly priced repairs as well.

It also made a massive help when there was a glut of new social housing. My tenant was offered somewhere (my flat is accessible - I’ve been through the ‘sell to the council’ process three times and it’s fallen through) and the dates were unsettled because of it being a new build. In many cases that would have meant double rent, but being part of that scheme meant they had someone they wanted me to take on as a tenant as they didn’t have another accessible place. So the dates could all be coordinated and neither of the tenants had a single day of double rent owed.

it meant that lots of the shit LL’s sold up because tenants could avoid them as it was an instant red flag if you weren’t on it.

Stupidly the scheme has been cut in the cut backs. Event though the housing staff themselves are utterly convinced it’s saved a fortune - it’s just hard to put down in exact ££s in one single budget.

I think you need to look at your overall financial position. You have one income generating asset that is currently giving you a taxable income of £400 per month and costing you nothing. If you spent £X,000 you could earn £800 per month. Could you borrow that amount as a home improvment loan or equity release on either house maybe over 5 years.. it would quickly be repaid in the increase in rent.

Is the rent currently funding your own household living expenses? Is that sustainable or is it a short term issue? If this is a key part of your income then maybe this asset could be working harder for you.

Decide if it forms part of your longer term financial plans.. providing pension income for you or to fund university costs for your children or future house deposits.. as it stands, it is likely to increase in value as long as you can afford essential repairs so you might need to find a way to build up a fund from the rental income to pay for these repairs.

It's not as simple as evicting your tenants but equally, I think you need a plan.

Rent increases do have to be fair though. But fair would also take into consideration market rent. It’s just I’ve not heard of this happening. Perhaps it’s because I use a letting agent, who wouldn’t allow for such a low rent without querying it and am in the ‘bubble’ of landlord, who is on top of repairs and maintenance. Increases should be fair. In op’s position, I’d be looking at market rent for the property in its current state minus 15%.

This is the cheapest terraced on Rightmove. www.rightmove.co.uk/properties/131372645#/?channel=RES_LET Kitchen looks tired but functioning and probably like the bathroom at least a decade old. The flooring throughout looks new.

The vast majority of landlords provide overpriced, undermaintained homes for people who are too scared to speak up. Just because you provide somebody with a home, doesn't automatically make you a good or ethical person.

If you are not prepared to invest any money on the house it is unreasonable for you to up the rent. Your tenants probably don't complain because they accept they are paying rent for a sub standard property.

Bear in mind that if you evict your tenants (which you are perfectly entitled to do) you may end up with no tenants if you are not prepared to make the property more habitable.

You say that you didn't enjoy living in this property yourself. Why was that? Because it's run down? Area?

It is never a good idea to let to friends/relations. It needs to be a business relationship.

1. Do you know where your tenants are from? As a landlord you have a legal responsibility to check they have a "Right to rent" - worth checking this out.
2. Do the sums... It's shockingly expensive to get work done these days, and really hard to find tradespeople. Just having your house empty for 6 months you will lose neary £2000 in rent, plus spend thousands on renovations. And the more the price goes up, the more capital gains tax you will pay when you sell it as not all renovations are allowable expenses. Although it may seem counter intuitive, you might well be better off staying as you are, although if they chose to move elsewhere that's a different scenario.

I have tenants who haven't had a rent rise in 3 years, they really couldn't afford a rise and anything similar is £650 rather than £500. If they decide to move (highly unlikely!) I'd think again!

To be honest, I think you're better off giving them plenty of notice then selling it as is.